The latest information from Google and other vital resources will help retail brands make a difference in 2020 and beyond.
No one could have predicted or even guess the events of 2020 and their impact on retail. Even now, we still don’t know the lasting implications of the coronavirus outbreak, and all predictions before Covid is no longer relevant now.
Earlier this year, McKinsey described the first quarter of 2020 as a 10-year change over 90 days. Retail brands must respond to these changes if they survive (let alone thrive) as the industry recovers from the coronavirus.
McKinsey’s 10 Years in 90 Days statement comes from a staggering yet straightforward analysis of the US e-commerce penetration between 2009 and the first quarter of 2020.
E-commerce penetration in the United States
Google research data shows a similar trend worldwide, with interest in ecommerce in online shopping or how to shop online growing 200%.
Overtime interest in online shopping
Looking at UK-specific data, we can see an increase in online shopping searches in mid-March, when national lockdown measures were introduced. Since then, the interest in online shopping has settled at a significantly higher level than in the pre-lockdown, although the increase seems smaller than the peak in March and April.
Internet sales as a percentage of total retail sales
To reinforce this point, ONS data shows that Internet sales have soared to reach 32.8% of all retail revenues by May. As the interest in online shopping, Internet sales are now on a downward trend, but it slows down much faster than the pre-lock levels.
The main tradeoff is that Covid-19 has a lasting effect on the way consumers shop, even after lockdowns have been relaxed, and businesses have reopened.
Google claims that the digital ‘showcase’ has never been more critical for retailers, and we’ve seen it with the successes of small retailers moving online as a way to cope with social blockade and distancing – some have even thrived. Thanks to the creation of an online transition.
According to data from Google, “retailers with strong digital offerings are expected to achieve 86% of revenue growth over the next five years”.
Bring together online and offline experiences.
While retailers with a robust online presence will make the most of the revenue growth over the next five years, most of those sales (78%) will still be offline in 2024.
The money consumers spend on online and in-store channels.
Online sales are projected to account for 22% of all sales by 2024, a remarkable increase from 14% in 2019, but that’s not the case between online and offline. While most sales still happen in-store, 53% of store sales go to retailers with digital offerings, and the big winners will be brands that combine online and offline experiences.
Most sales can occur in stores, but the vast majority of consumer travel starts outside of them. The challenge for retailers is to generate interest through digital channels and turn that interest into store visits and offline purchases.
Here are three things Google wants sellers to keep in mind:
- Consumers have an overwhelming choice. Retailers should help consumers make informed decisions by providing information useful for making their own decisions. This will increasingly become an important differentiator.
- The future of retail is not all about when it comes to physical or online presence. Retailers will need to stop focusing on transactions and refocus on integrating online and offline experiences.
- Retailers need to meet growing consumer expectations and deliver seamless experiences. This means that investing in digital transformation.
The coronavirus epidemic has shown that retailers don’t need to reinvent the wheel to meet consumers’ changing needs. By prioritizing services such as home delivery, contactless shopping, click-and-collect, virtual queues, and virtual locker rooms
Retailers who thrive over the next five years will do so by capturing online leads and providing a awesome experience that allows consumers to complete their purchases on their terms, both online and in-store.
Change your search habits.
The coronavirus pandemic will have a lasting impact on consumer behavior, and it is undeniable that difficult times are looming for many. However, the latest data shows that retail spending in September 2020 is higher than this time in 2019 and that UK consumers are showing surprising resilience to the epidemic.
To see how niche the impact of Covid-19 has been on consumer interests, you only need to look at Google’s data for ‘balloon delivery’ searches over the past 12 months in the UK.
Interest in time for delivery of phrase balloons
The thing is, evolving consumer needs are revealing new opportunities for companies in every sector, and sometimes they are not always in the most obvious places. This is why it’s so important to have access to relevant, real-time data so you can follow consumer trends and respond to new opportunities that arise.
There are four key points that Google wants retailers to consider when adapting to the new standard:
- Consumers are pushing businesses to innovate: Downloading apps across a wide range of categories has increased as consumers began looking for niche apps to meet their immediate needs. Searches for “virtual evidence” have seen an increase as QR codes have started to resurface and become familiar again.
- Consumer expectations are changeable across the different categories: Throughout the pandemic, consumers have developed much higher digital expectations, even shifting expectations from one industry to another. This includes accelerated home delivery for niche items such as “compost” or an increase in demand for “promo codes” in categories we haven’t seen this before.
- Consumers have an increased need for real-time information: Consumers’ appetite for “real-time” story has also increased. This was especially precise for retail, as consumers sought local information on details of store reopening, dos, and don’ts, and even “quietest time to shop.”
- Consumers are causing significant shifts in demand: Consumers have sought out the products and services that are more relevant to their situation through searches such as ‘for children’ or ‘for students’. From the start of the pandemic, niche searches for home and garden and electronics have increased well.
The nationwide lockdown and recent local measures have shown how crucial real-time information is to consumers during this period. As Google points out, this is especially accurate for retail stores where their opening hours, social distancing measures, and services are available (for example, seated meals, deliveries, etc.) can change at any time.
Providing this information is critical for brands to offer a small amount of certainty during these uncertain times.
The same also works in reverse. When we see consumer habits change for ten years in 90 days, retail brands need access to the most recent data to respond quickly enough.
Covid-19’s economic recovery will be slow, and for every retail brand that wins, there will be multiple that lose. Taking action first to meet ever-changing consumer needs will make a difference, and brands must respond faster than ever in the current climate.