Author: Guy Shone
Guy is a business commentator, leading global researcher and market analyst. He’s made complex stuff seem simple to a global audience of 50 million people through many TV and radio channels over the past year. He’s all about explaining the market as simply as possible. This insightful piece is no different: soak up his advice and enjoy.
Time to read: 10 minutes
The shopping experiment: how do we navigate the new way of life for shops?
Author: Guy Shone
Shopping was already changing. Lockdown has made us spend less & altered what we buy. But now shops are open again, has browsing become a thing of the past? Will new shopping trends change the way we live forever?
Four nations of pent up shoppers
Britain has long been a nation of shoppers as well as shopkeepers. But with so many new rules restricting how we buy our favourite items - it has been hard for experts to calculate the economic impact. Retail researchers are busy trying to make sense of what has been happening since non-essential shops reopened. Recently, analysts looked at the jams at retail parks, plus those giant queues outside some high street shops and concluded that British shoppers have pent up demand: Demand to get back to normal. Of course, not everyone gets excited at the prospect of camping in the rain outside shops at 6am. Plenty of tech savvy shoppers are quite content that the word 'browsing' may soon stop having any meaning at all outside of the internet. In fact, many of us are left wondering exactly how this bizarre lockdown experience has changed what was once normal - and whether things will ever be the same again.
Tough times for physical shops
The lockdown has been devastating for almost all physical shops. Figures from the Office of National Statistics for May show footfall down 73% and numbers of visitors for April were even lower - a staggering 80% down on the previous year.1 Despite the toughest of tough conditions, shoppers have been flocking back to retail parks up and down the country over the past few weeks. There have been great examples too of local companies adapting fast to the tough conditions. A great example is a Newcastle bread maker that has now switched from wholesale to retail to take advantage of demand for fresh produce, served at a social distance and collected by customers actively looking for the chance to enjoy a stroll or cycle.
Smaller queues and muscles
Despite being world class at queuing in the UK, most of us still hate it. Waiting in line, physically at least, is one of life's little frustrations that technology seems to be taking away. But 'click and expect' shopping is changing our lives more than we might realise. Customers now expect more from online stores than ever before. The ability to order whatever we want from our sofa within a few clicks has saved us time but it could also be impacting our physical health. There has been a debate about the link between online shopping and obesity for many years and a major study by the Chartered Society of Physiotherapy back in 2017 suggested that the fact we now carry fewer shopping bags is making people weaker.2 So whether it is weaker muscles or just less time stood in those annoying queues - shopping habits are clearly changing much more than how or what we buy.
High streets struggle while online shopping soars
While shoppers have been queuing in the retails parks, they have not been flooding back to UK high streets. Our market towns, villages and city centres were already struggling to attract big spenders. Lockdown has made the job of re-imagining the high street even tougher. Meanwhile, online shopping has enjoyed even more massive growth during lockdown. The ONS Sales report shows that over 33% of all sales are now done online after May saw a huge 19.7% increase in digital shopping.3
I have been talking about this subject a lot on TV and Radio recently. It is as much about culture as economics and nobody yet knows the answer to the question 'what do we want our high streets to be?'. Should high streets become more about getting information or learning about local heritage than actually spending lots of money? If so, how do we fund those services? There are big questions here. Across the UK businesses, shoppers, politicians and even landlords have been meeting in many towns to try and figure out who and what the high street of the future should actually be for.
Many of the biggest credit and debit card companies provide data on our shopping transactions. A look at a range of recently published spending stats reveals the following:
- Overall we have been spending less.4
- March was the highest month for grocery sales ever.5
- DIY products, Gardening tools, Bikes and Home Office equipment have seen huge increases in popularity.6
- We have reduced spending on cosmetics.7
Of course, shopping habits were changing long before the coronavirus crisis. The twice monthly trek to the supermarket I remember as a child doesn't really happen in the same way these days. Not only was it almost always my mum who led the expedition, but loyalty to one supermarket brand was stronger 20 years ago. Food shops were vast, painful experiences - sometimes physically as we shovelled giant sacks of groceries into the back of our small family car. Well before the lockdown, those days were long gone. Shoppers had enthusiastically embraced new budget brands while still selecting high end alternatives for treats. Both high end and budget supermarkets began to get used to sharing the loyalty of a diverse range of customers. Brits had already shifted to a new world of buying smaller baskets but more often and expecting a fresh ground coffee to help them cope while they shop.
The new normal
I keep hearing the expression 'the new normal'. The UK is a diverse place but for most people a trip to a café, pub or restaurant would be considered a social norm. This means the wait for pubs and restaurants to reopen is understandably stirring emotions. Everywhere we turn there are questions about what will happen. Will we see an initial surge - an explosion of pent up demand? Will the social distancing measures ruin the experience for customers? How will we as a nation of shoppers react?
Research by psychologists and sociologists suggests it takes roughly 60 days of repetition for habits to become the new normal.8 So to what extent will shoppers spring back to how they behaved before lockdown and what behavioural changes will stay with us? The only real way to find out is to watch what happens as the restrictions are lifted. This means that the date of June 15th was important: not just to provide hope for a much needed economic boost but also as a source of data.
June 15th marks the beginning of a process, a new experiment that should tell us how much we have truly changed - not just as shoppers but as people.
You are part of a big shopping experiment
So does this mean lockdown has created a new vision of the ideal life? Perhaps the pursuit of luxury brands has been replaced by a new found love of being at home. All changes in tastes or preferences create an economic ripple effect. So how much of this change is because we have had no alternative - and how much is indicative of a new attitude? It will be interesting to watch the next 12 months play out to see which shopping trends stick and crucially what doesn't last long. In a sense, we are part of a live experiment. All of us get to watch which trends last and see the short term fads that fade away as restrictions are lifted.
Guy's 5 Top Shopping Facts
- Lockdown has made us spend less on luxury items. Analysts are forecasting a drop of up to 35% on luxury brands by the end of the year.9
- DIY and Exercise equipment have seen record sales. According to the Love the Sales UK Covid-19 Retail Report June, Kettlebells saw a 419% jump in sales during lockdown.10 Why not make 2021 the year to save money on gym memberships and embrace DIY fitness?
- Online shopping keeps growing at a spectacular rate. The global market for internet shopping is expected to be worth more than £5 trillion by 2024.11
- The shift to shopping from our sofa might impact our physical health if we are not careful.
- As stores re-open we all become part of a giant shopping experiment. Lots of great information on how our shopping habits impact the health of the economy can be found online at the Office for National Statistics . Be a researcher and check out the results for yourself as the data comes in.
1Office for National Statistics, Retail Sales Great Britain, April & May 2020
2Chartered Society of Physiotherapy, Opinion Survey, September 2017
3Office for National Statistics, Retail sales Great Britain, May 2020
4Office for National Statistics, Retail sales Great Britain, May 2020
5Kantar, Worldpanel FMCG Report, March 2020
6Love the Sales, UK Covid-19 Retail Report, June 2020
7Information Resources Inc, Consumer Spending Report, April 2020
8European Journal of Social Psychology, How are habits formed, July 2019
9Bain & Company, Luxury Study, May 2020
10Love the Sales, UK Covid-19 Retail Report, June 2020
11Juniper Research, eRetail Report, March 2020