The Retailer Autumn Edition 2021

AUTUMN 202 1

1 9

NET CHANGE IN UNITS BY BUSINESS TYPE

2000

804

762

1000

4

0

-659

-986

-1000

-1554

-1833

- 2001

-2000

-2848

-3000

-3695

-4000

-5251

-5000

-6001

-6000

-7000

H1 2016

H1 2017

H1 2018

H1 2019

H1 2020

H1 2021

Independent

Multiple

Online shopping is here to stay It is, perhaps, a sign of the times that we cannot talk about physical retail without talking about the migration of spend to online channels. ONS data revealed that, across retail, online sales made up 28.1% of all spend at the end of H1 2020, an increase of 7.8% in just a year. The pandemic only accelerated this trend, but we seem to have missed the experience of shopping in person: following the reopening of ‘non-essential’ retail, demand for offline shopping did increase. At the end of H1 2021, the proportion of all retail sales made online decreased to 26.7%. However, this is still 7.8%higher than the pre-pandemic figure, indicating that online shopping is here to stay. Early last year, experts had already posited that physical storeswere set to change in terms of purpose and that is indeed happening. Many retailers have shrunk their physical store portfolio, with the remaining locations often acting as showrooms and click-and-collect hubs to support online channels. Some are creating ‘experiences’ at physical stores to excite customers and act as a catalyst for a buyer journey that may end online.

The impact of home working Major GB cities like London were hit hard by the pandemic in the absence of tourists and commuters. The lifting of restrictions did not see a widespread return to the office and, even with recent reports of greater worker footfall on public transport and in cities, ‘hybrid’ working models may continue to be the norm. As a result, local communities have fared markedly better than commuter cities. In the near future, we expect more retailers to rationalise their store estates, reducing their physical presence to focus on online channels. Some may follow in the footsteps of GAP and close physical stores completely. The worst of pandemic-related closures should be over by the end of 2021, when most restructuring should be complete. Across categories, retailers will bank on the trends they expect to continue; fast food takeaways may expand beyond a saturated London to open in other regions, for example. We have all seen how profoundly the retail sector has changed in such a short space of time. As we see the return of colder weather, changes in COVID infection rates may affect restrictions on domestic and inter - national travel, trade and government support for retailers in the last quarter of 2021. Embracing and adapting to emerging consumer trends, such as the growth of delivery apps and increased demand for offline socialising and experiential retail, will give retailers a better chance of thriving amid uncertainty.

Sarah Abu-Amero marketing@localdatacompany.com

Credit: Mike Petrucci on Unsplash