Sector trends

New trends in online shopping

The sudden shift to online has accelerated change in the retail and leisure sector, bringing opportunities, challenges and a few surprises.

After all, during the past year, buying habits have changed dramatically. Nearly half (46%) of consumers shopped online for a product they had previously only purchased in-store, according to a survey by consultancy Retail Economics.

“We have seen a shift towards online during the height of lockdown as stores closed,” says Retail Economics chief executive Richard Lim. “There’s been a new wave of online shoppers getting over initial barriers like entering payment details online.”

Clothing retailer White Stuff saw more people flock to its website as a result of the pandemic. “With retail stores in lockdown, it was the only option that the customer had, and this meant that some of our loyal store customers switched to online for the first time,” says its non-executive chairman Debbie Hewitt. But it has also brought another upshot. “We attracted new customers who had not shopped with us before,” she says.

Surprising profile of new converts

So who are these people shopping online for the first time? People may assume that it’s a new wave of older shoppers unable to access physical stores for a variety of reasons, but research from Retail Economics found that since the outbreak of coronavirus 54% of 16- to 24-year-olds have purchased a product online that they had previously only bought in-store. This fell to 44% for those aged 65 and over.

Lim says younger shoppers are buying products such as health and beauty items that they’d usually buy from a physical store. “There are pockets of opportunities for businesses to target young consumers in health and beauty by bringing them to shop online,” he says.

“No doubt there was a big jump in older shoppers but there’s been a jump across the board,” says Retail Week features editor Gemma Goldfingle. “Many have enjoyed online shopping for the first time. One of the advantages of shopping in-store is the touch and feel, and now you can’t touch clothes and makeup, it’s taking away a massive reason to go in to store.”

There’s absolutely been a step change in the industry. Some customers will revert to old shopping habits, but a considerable proportion will remain won over by the online shopping journey

Richard Lim
Chief executive, Retail Economics

Sian Garvey, director of marketing at Topps Tiles, notes that the profile of its online shopper hasn’t changed significantly, but over the last few months it has seen a difference in behaviour. “Typically, customers might have browsed online and then gone in-store a couple of times. However, now we see that journey shortened with a strong focus online and on the experience there. We’ve also seen a behavioural shift, with more customers getting orders delivered to their homes rather than picking them up in-store.”

The uptick has also been seen in leisure, with increased demand for the services of Deliveroo, Uber Eats and Just Eat, the latter of which reported a sales surge of 43% in the third quarter of 2020 compared with the same period in 2019.

Understandably, catering for digital demand has led businesses to invest heavily in their online operations. Tesco, for instance, has said it will create 16,000 permanent jobs at its online operations after seeing orders rise from 600,000 a week to 1.5m. Meanwhile Aldi is trialling a delivery service with Deliveroo across 20 of its stores.

For more on Retail and Leisure Trends for 2021, see below:

Responding to shifting demand

So how can retailers make sure they are attracting this new wave of online shoppers?

Many already have. For example, Waitrose tapped into data from its loyalty scheme and customer accounts to allocate at least a quarter of its online grocery delivery slots for elderly and vulnerable customers.

“The key thing is to recognise that the online customer is not just looking to buy,” says Hewitt. “They are wanting to shop, and get advice and inspiration. That’s the bit that online can sometimes miss and which we are focusing on.”

Some may wish to make immediate alterations to the product itself. “Retailers might have to change their range to reflect changing consumer habits, and respond to consumer demand,” advises Lim. For a fashion retailer that could be something like moving from occasionwear to loungewear.

Clothing retailer Hush, which is sold via John Lewis and online, has experienced a huge increase in casual styles, particularly in the early stages of lockdown. “Our aesthetic is generally very suited to working from home...[so] our product offering is obviously very suited to the times,” says co-founder Rupert Youngman. “But, yes, there’s a lot more focus on jersey ‘basics’ such as joggers, sweatshirts, pyjamas. We must have ordered our autumn/winter collection four or five times as the situation unfolded.”

Smart retailers are starting to merge the online and physical experience to attract customers. “It’s about bringing that best service and expertise in-store into the online world,” says Goldfingle. “For example, we’ve seen John Lewis and Dixons Carphone offer virtual consultations, with staff walking around in-store and talking customers through products.”

Change is here to stay

So, what will the future of online shopping look like? Will we see people revert to stores in the numbers they once were? With Retail Economics’ research finding that almost a third (32%) of people reporting they were likely to change permanently the way they shopped as a result of Covid-19, Lim is adamant. “There’s absolutely been a step change in the industry. Some customers will revert to old shopping habits, but a considerable proportion will remain won over by the online shopping journey. We expect it to be a permanent shift for some parts of the sector.”

Jenny Johnston, sales and marketing manager, UK and Ireland, of furniture retailer JYSK, which has 20 stores in the UK and saw online sales increase significantly during lockdown, believes there has been a fundamental shift in buying patterns. “Now that consumer behaviour has been forced into change, more people will continue to shop online. We see it as an entirely new opportunity and will continue to grow the online aspect of our business.”

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