The effects of the COVID-19 pandemic are set to have long-term impacts on the retail sector and will disrupt consumer shopping behaviors and their priorities in the forthcoming year through to 2025, according to a report from Edge-by-Ascential’s research and data insight arm, Retail Insight.
The ‘Future of Retail Disruption’ report highlights key factors that are set to drastically disrupt established structures and practices within the retail sector. In it, Edge by Ascential analysts outline how retailers should prioritize and proactively address these disruptions.
For example, key trends and priorities may include:
- The shift to online and increase in convenience
This shift to online will also have an effect on in-store shopping behaviors, as convenience and proximity become important factors in choosing where to shop. Brands and retailers must support this rapid transition to omnichannel shopping with flexible, transparent, and reliable supply chains. Retailers should also place less reliance on big-box formats – such as large superstores – given consumers’ plans to spend less time in-store, and instead focus on bringing in-store experiences online.
- Increased demand for health trends
Consumer trends around wellness and healthy lifestyles have been further buoyed by the pandemic and will prompt retailers and brands to focus on ‘good-for-you’ ranges, in-store health services, as well as educational and inspirational initiatives. Brands should also innovate around on demand health and hygiene benefits and communicate those clearly to stand out among consumers.
- New in-store expectations led by technology
COVID-19 has led consumers to grow more concerned about in-store and product safety. As personal contact remains a concern amidst prolonged social distancing, retailers should explore ways to drive excitement and inspiration in-store through innovative merchandising solutions and the greater use of digital touchpoints. Meanwhile, having credible information on the origin and production standard of products will be key for many brands seeking to maintain a strong on-shelf presence.
Xian Wang, Global Content Director at Edge by Ascential, said: “The COVID-19 pandemic is having a seismic shift on the retail industry, and its effects are likely to be permanent. We have seen a dramatic shift towards digital commerce, with 40% of global retail sales projected to come from ecommerce by 2024. To adapt in this new environment retailers need to proactively define their own market position and focus on the priorities of consumers, such as what they are placing more value in and their biggest concerns, which can vary by market.”
“We have already seen a number of retailers adapting their strategies and expanding their offerings to achieve greater loyalty, and this includes engaging customers through a more holistic offering, such as healthcare services, entertainment hubs and convenience fulfilment to achieve greater loyalty. This will be key in helping retailers to remain relevant in these rapidly developing times. For brands, the focus must be on global flexibility and rapid product delivery, as there is no doubt that fast-paced and agile manufacturers will dominate trading. Brands that master flexibility and can operate across multiple digital platforms and touchpoints will benefit greatly and will be the ones that ultimately stay top of mind with shoppers.”