Consumer Retail trends

Clicks and Cliques: Understanding Modern Shopper Tribes

Knowing your customer is essential in the best of times. In a post-pandemic world, it will be the difference between survival and failure.

I had the pleasure to work with Klarna on their latest report Clicks and Cliques: Understanding Modern Shoppers where we identified five distinct shopper tribes for the post-COVID world. Based on a survey of 4,000+ consumers across Europe, the UK, USA and Australia, the report examines how shopping behaviour has evolved and how retailers can stay relevant in a fast-moving world.

Good value for money is naturally a top priority for shoppers this year, with more than two-thirds (67%) suggesting it has become more important since the start of the pandemic. It’s followed by promotions and deals (60%), a good reputation and trustworthiness (60%) and having a wide range of products available (58%) — perhaps fuelled, in part, by shortages on the shelves earlier in the year.

Over half of respondents said that an easy returns process (55%) and next or same day delivery options (51%) have become more important this year — naturally coinciding with 49% doing more of their shopping online and 44% doing most or all their shopping online now.

The ability to pay flexibly has also grown in importance, according to 45% of respondents — and this can be a real dealbreaker. Four in ten (42%) prefer to shop from brands or retailers that offer flexible payment options, while three in ten (32%) won’t shop from those that don’t.

Commenting on the research, Luke Griffiths, CCO at Klarna, said: “This year’s events have transformed the way we browse and buy, reinventing our relationships with brands and retailers and accelerating change at an unprecedented rate. Merchants must keep a finger on the pulse of their customers wants and needs and adapt their products and service offers accordingly to build a connection with shoppers to drive loyalty and, ultimately, sales.” 

Natalie Berg, Retail Analyst and Founder of NBK Retail, added: “The retail industry is no stranger to disruption, yet nothing in our lifetime has jolted the industry like Covid. As retailers look to navigate the new normal, resilience and agility will be essential for survival. There will be no return to the status quo. The days of being everything to everyone are well and truly over: in order to find their tribe, retailers need to be bold about who they are and what they stand for. Opportunities have emerged, enabling retailers to reimagine both physical and digital commerce for the future.”

Download the full report here.

Consumer Retail trends

Peak Car And The Hyper-Local Retail Opportunity

In my latest long read for Forbes, I explore how London’s green recovery will create opportunities for local retail:

Across the UK, city streets are quietly undergoing radical transformation. Temporary cycle lanes have popped up, footways widened to enable social distancing and, perhaps most drastically, residential roads are being blocked to through traffic. Since May, over 200 of these “low-traffic neighborhood” (“LTN”) trials have launched as more than 50 councils take advantage of the £250 million of emergency “active travel” funding from central government. The vast majority of these LTN schemes are in London. Full disclaimer: I live in one.

Full article can be accessed here.

Store closures

COVID-19’s Devastating Impact on Retail Jobs

Last night, I spoke to the BBC about the 12,000 job cuts announced in the UK this week. Retail will certainly not be spared: Harrods, an iconic brand but reliant on international visitors, and Arcadia, a retailer that has quite simply failed to evolve, are collectively cutting 1,000+ jobs. TM Lewin, a brand that has been trading for over a century, is closing all of its shops and focusing exclusively online. Microsoft will be doing similar by shutting virtually all of its stores around the globe. Will 2020 see a reversal of the online-to-offline trend?

Who’s going to be hit worst? Those that failed to adapt pre-crisis of course. We’ll see an acceleration in the demise of mediocre or irrelevant retail. Buckle up, folks. It’s going to get a lot worse before it gets better.

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Consumer Retail trends Store of the future Technology

When Non-Essential Stores Reopen, Will Shoppers Accept The Friction?

As Britain’s ‘non-essential’ retailers prepare to reopen their doors in the coming weeks, one of the biggest challenges they face will be convincing shoppers to walk through the door. And, no, I don’t just mean from a safety perspective; I’m talking about the additional friction that shoppers will inevitably encounter.

Will customers queue up to enter a department store? Will they want to pop in to a clothing store if they can’t try stuff on? Will they accept less choice on shelves as retailers make space for social distancing measures? If they have picked up a book off the shelf, will they remember to then place it on the special quarantine cart? This might all be worth the hassle – if there was no such thing called the internet.

Don’t get me wrong. Bricks & mortar retailers should get a much-needed initial boost when they reopen. These are uncharted waters, but pent-up demand must be a given when consumers themselves are pent up for months. We are social creatures, and the notion of ‘going shopping’ is inherently a leisure activity. The high street retailers that have thus far survived the so-called ‘retail apocalypse’ are those that focus on all the things shoppers can’t get online – inspiration, discovery, curation, community, experience.

In my latest for Forbes, I explore how this will look in a post-COVID world. Has ‘experiential retail’ finally been relegated to the buzzword archives? Has a pandemic killed the art of browsing? You can read the full article here.

Consumer Uncategorized

Coronavirus – What Retailers Do Now Will Define Them in the Future

As 21st-century consumers, we’ve gotten used to having the world at our fingertips. Then seemingly overnight, all the stuff we take for granted is in question – access to healthcare; groceries on shelves; the ability to travel, go to school, socialise with friends.

The fear of getting ill, our loved ones getting ill or the uncertainty of it all has led to unprecedented levels of panic buying.

Essentials like hand soap and toilet paper disappeared from shelves and retailers began rationing goods like pasta and tinned vegetables. This weekend, I spent 15 minutes staring at my laptop screen as I waited in a virtual queue to order groceries, only to find the next available slot wasn’t for another week.

This might sound trivial. I am, however, self-isolating because of a cough so I’m even more reliant on online deliveries than normal. I suspect I’m not alone.

Retailers have been remarkable in their response, forgoing any hint of usual competitive behaviour to serve their communities. Staff are on the front line, doing their best to keep shelves stocked and alleviate concerns about potential food shortages. But uncertainty breeds irrational behaviour.

Retailers have therefore had to make some very difficult decisions. Aldi, for example, is limiting shoppers to four items of everything it sells. Ocado, meanwhile, has effectively closed its doors to new customers. Unable to cope with the surge in demand for online groceries, Ocado is exclusively serving existing shoppers – a risky but commendable move.

What retailers do today will define them in the future, whether that’s converting perfume factories to make hand sanitiser like LVMH or turning car parks into coronavirus testing sites like Walmart.

In the UK, Lush was the first high street retailer to take action against the virus, encouraging shoppers to come in and wash their hands without any pressure to make a purchase.

In recent days, there have been numerous examples of retailers putting people before profit. Frozen food retailer Cook is offering customers a free frozen meal to take to an ill or elderly neighbour. Some supermarkets such as Carrefour in France and Iceland in Northern Ireland have begun opening earlier exclusively for the over-70s. To protect its staff and the community, Patagonia was one of the first retailers to shut not only its shops but its ecommerce operations too. Meanwhile, Morrisons will begin paying its small suppliers immediately to help them with cash flow during the outbreak.

Tip of the iceberg

These are unprecedented times. In the coming weeks, as self-isolation becomes more prevalent in a bid to slow the spread of the disease, what might this mean for retail?

First, as we’ve seen in recessions or in fact any period of prolonged uncertainty, consumer behaviour changes instantaneously. We drop right down to the bottom of Maslow’s pyramid, covering our physiological and safety needs.

Major banks have promised relief to consumers by increasing credit limits, waiving fees on missed payments and offering payment holidays on loans and mortgages. Get ready for discretionary consumption to largely shut down. But even without financial constraints, it’s hard to imagine shoppers wanting to splash out on a new jacket or skirt when they might, quite literally, have nowhere to go.

The coronavirus outbreak has had an immediate effect on travel retailers such as WHSmith, which issued a coronavirus-related profit warning; the retailer is bracing for sales at UK airport shops to drop by over a third in March and April. Cineworld, meanwhile, has said the outbreak could ultimately result in the world’s second-largest cinema chain going out of business. This is, unfortunately, just the tip of the iceberg.

However, as consumers prepare to cocoon, perhaps there will be some silver linings. Retailers should be prepared for consumers to swap physical shops for digital storefronts, cinemas for Netflix, restaurants for takeaways and, perhaps for some, the gym for a Peloton-esque experience at home. April is officially National Home Improvement Month – with millions of people stuck indoors there’ll be plenty of opportunities to get those DIY projects done.

Perhaps the supermarkets could offer pre-packed grocery bundles to consumers affected by coronavirus. We’re already seeing new consumer groups trial grocery delivery for the first time. How will online retailers cater to new demographics? Will we see a longer-term shift to frozen food? Electricals retailer said freezer sales jumped 200% in the first week of March, while Iceland has also seen an uplift in sales as shoppers stock up in case of self-isolation.

Social distancing will require the world to temporarily slow down, but perhaps that in itself is not such a bad thing. In China, CO2 emissions have been around 25% lower than normal over the past month. This could prove to be a meaningful time for reflection, to live a simpler life – enjoying cooking, reading, spending time with immediate family. Trend forecaster Li Edelkoort believes coronavirus will result in a “quarantine of consumption”, allowing humanity to reset its values. Then again, it might just result in a lot of divorces.

Uncertainty may lie ahead, but retailers play a vital role in helping local communities through this crisis.

A version of this article originally appeared on Retail Week.