2020 was a year that nobody running a retail business could possibly have foreseen in 2019; it provided a real shock to the system, in so many ways. Yet as unpredictable as the year initially began, it actually settled into quite a reliable pattern from a retail demand perspective as the months went by; online sales skyrocketed (for most categories except clothing) and stores opened and shut in line with COVID infection rates. But, it became clear very early in the pandemic that 2020 was going to be a heavily-disrupted year for many industries. The real question was what would happen in 2021, as how ‘under control’ it is possible to get this disease became evident. Due to all the directions things could potentially go in 2021 – from restrictions eased and the much-vaunted ‘new normal’ becoming apparent, through to further national lockdowns – forecasting this year is more about guesswork than science. The biggest question is how the online / offline split will settle back down again. We are creatures of habit, so will people be far more inclined to continue the distance purchasing behaviour that has been necessary for the past year, or will the shops exert a fresh appeal, due to them offering an outside experience after so long trapped inside? It’s obviously difficult to know, but there are some things we do know:
• Online has been boosted, and it will remain at an elevated level to some extent
• For all the talk of mass change, really it is largely a story of acceleration rather than change; a lot of change that was happening anyway got sped up, rather than strategies getting entirely ripped up
• That said, video calls have become a common part of behaviour now, due to use of Zoom. Many retailers are looking at how they can use this to enhance communication with customers, particularly between store staff and online customers
• The first lockdown forced large companies to make huge changes to operations in a matter of weeks, days even. That startup mentality is something we wouldn’t want to forget entirely as businesses look at their digital transformation ambitions
It won’t go back to exactly how it was before, but quite what changes will stick is still very much an open question.
Andy Mulcahy, Strategy and Insight Director at IMRG