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By the Numbers: The State of Retail During The Pandemic
It is no secret that businesses of all sizes, in all industries, have felt the impact of COVID-19. Any sales projections made at the start of 2020 have likely been steamrolled by the pandemic, with sales figures changing much more rapidly and unpredictably than expected.
Everything has changed, from the way we shop and work to the way we interact with our friends and families. For some companies, the pandemic has shut doors permanently. For others, temporarily. And for those who have been able to leverage new ways to stay afloat, the pandemic has shown the kind of creativity and resilience required in uncertain times.
Retail is one of the sectors most obviously hit by COVID-19. Globally, one of the first steps taken to try and curb the spread of the virus was to close all non-essential retail stores and allow only online sales, delivery and curbside pickup. Even now, as restrictions slowly start to lift around the world, retailers must still adapt and adjust to their “new normal.”
Let’s take a look at five ways in which this pandemic has affected retail.
How Retail is Changing During the Pandemic
1. Overall eCommerce Sales Have Increased
During the pandemic, many consumers have turned to the web to shop for both essential and non-essential items – either due to store closures, personal safety preferences or convenience. According to a report by Signifyd Inc., who surveyed 10,000 retailers, eCommerce sales were up 40% at the end of May, compared to pre-pandemic numbers.
This trend has forced many brick-and-mortar retailers to pivot in order to try and keep revenue up during this time, launching or optimizing existing eCommerce websites to account for lost sales in-store. eCommerce platform Shopify saw a 75% increase in new store creations between March and April alone.
With consumers spending more time online and less time in-store, sellers should expect their eCommerce growth to continue rising as shoppers get used to the convenience of online ordering.
2. Customers Are Focusing on Some Items Over Others
Whether in-store or online, shoppers are spending their money in very specific ways. According to a report by Statistics Canada, during the first week of COVID-19 related restrictions, these items saw sky-rocketing sales increases across the country:
- Hand sanitizer: up 639%
- Masks and gloves: up 377%
- Toilet paper: up 241%
- Dry and non-perishable food items: up 239%
It is easy to assume why these items saw such a spike once COVID-19 came to the forefront of Canadians’ minds.
In more general terms, an Attentive report for the month of May cites increases in categories such as Home (+26%), Apparel (+24%) and Beauty (+19%), and decreases in Electronics (-21%), Luxury Apparel (-9%) and Pets (-1%). Real-time sales figures tracked by Attentive throughout the pandemic have proven to be quite volatile, with consumer behaviour changing rapidly the longer they stay at home.
As time moves on, it is expected that consumers will be less brand loyal and more likely to search for lower prices, especially within the essential categories of grocery, pharmacy and household supplies. This will likely change the way retailers price and promote their products in the near future.
3. Curbside Pick-up Has Become A Household Term
Curbside Pick-up – BOPIS – Click and Collect. Many businesses not able to accommodate shoppers in-store have turned to a BOPIS (buy online, pick-up in store) model with curbside pick-up options. From clothing stores to restaurants, we’ve seen many different companies adopt this creative way to continue supplying product to their customers – so much so that “curbside pick-up” seems to have become a new household term for many.
Even as stores begin to reopen, retailers will need to determine if they can continue offering a curbside option for those who are uncomfortable or unable to enter their establishments. Signifyd Inc. reports that BOPIS has seen a 248% increase since before the pandemic – an impressive growth trajectory that is sure to make an impact moving forward.
4. Social Distancing In-Store
For those consumers who have continued to shop in-store for their groceries, outdoor supplies, pharmacy needs and more, social distancing measures have become an expectation. Distancing regulations have forced shoppers to wait in lines outside of retail stores for the first time, to stand six feet apart from other customers and move through one-way aisles, to shop more efficiently, and perhaps even to do so while wearing a mask.
How will these measures change retail post-pandemic? We expect retailers will continue working towards a distanced shopping experience in order to ensure their customers feel safe entering their doors: wider aisles, more frequent sanitation, self-checkouts and contactless payments – and, of course, more promotion of eCommerce options.
5. Customers Are Getting Used to the “New Normal”
According to research performed by PFS Web Inc., 40% of consumers say they shopped a new eCommerce website during COVID-19, and 45% say they would return to this website based on a positive shopping experience. With more consumers exploring eCommerce more frequently, habits are being formed and positive experiences are shaping preferences.
58% of shoppers expect to order more online in the coming months, according to Digital Commerce 360, which means that even as brick-and-mortar stores start to reopen, an eCommerce strategy will continue to push sales for many.
All-in-all, the retailers who have adapted to the pandemic and adopted a multi-channel approach to sales (including brick-and-mortar, direct-to-consumer websites and expanding their eCommerce presence to marketplaces) will be the ones to survive with greater success once things “return to normal.”