April’s retail rush: Step 2 in the roadmap out of lockdown
After months in lockdown, UK consumers excitedly headed back to the high-street. Whether it was for a desperate haircut, a gym workout, an alcoholic beverage on a table outside, or of course, a trip to the local shops – the streets looked busy once more.
The British Retail Consortium estimated that non-essential retailers lost around £22bn in sales across the entirety of last year. So, a big turn out and consumer optimism was very much needed this week. And that is exactly what happened.
Monday madness kicked off a promising week for retail
Fuelled by pent-up demand, pent-up excitement, pent-up energy, and just generally being pent-up, UK consumers returned to the streets in their droves. Data from Springboard showed that Monday saw a staggering 146% rise in shopper numbers across UK retailers compared to last week. Compared to the same point last year, where the UK was amid our first lockdown, the numbers were 471% up.
Whilst not a complete recovery to 2019’s numbers, the first week after lockdown showed a promising bounce of consumerism. A welcomed sight for retailers up and down the country. The Bank of England also announced that UK consumers have amassed around £180bn more in savings than they otherwise would have. So, there’s money in the bank for the shopping spree to continue.
The next big step for retail
Primark lost sales to the tune of £1.1bn as a result of intermittent lockdowns, capacity restrictions, and COVID-19 unease amongst shoppers, all exaggerated by their complete lack of presence online to capture demand whilst stores were shut. The leading fashion brand could take a further hit of £480million from March to August if people do not flock to the shops as quickly as hoped.
So naturally, the next step for retailer’s looking to build on a good first week of trading post-lockdown must be making the in-store shopping experience as safe and exciting as possible.
Marks and Spencer revamped its brick-and-mortar stores ahead of 12th April reopening to “best serve customers how they want to shop today”. They introduced greeters at store entrances and improved their stores digital capabilities including express collections, digital check-ins and contact-free bra fittings.
Selfridges were another retailer to up their offering. The department store will improve on their strong legacy of an excellent customer experience with SoulCycle Outside, live DJs, and “experience concierge” on hand to arrange activities ranging from skateboarding classes to beauty treatments.
What about eCommerce?
eCommerce rose to new heights in 2020. Online sales were up around 34.7% from 2019, with some reports claiming an increase of 46%, as the world was forced to realise the ease, low cost, and speed of shopping online. The levels of eCommerce look unlikely to drop. Indeed, EY’s study in the middle of last year found that around of 20% of consumers will never return to physical stores again.
So more will need to be done to encourage shoppers back to physical stores, and that starts by improving and innovating the in-store experience.
A final goodbye
An astounding 17,532 chain store outlets pulled down their shutters for the last time in 2020, taking a 67,000 jobs with them according to PwC. A surprising 7,665 stores did open last year, though it did not stop the net loss of 9,877 outlets totalling the biggest decline since the 2008 financial crisis. Here’s just some of the stores you’re unlikely to see on the UK high-street again:
Arcadia Group – A stalwart brand of the British high-street, the Arcadia group were plunged into administration in November 2020. ASOS and boohoo split up the brands between them and its likely they will be sold online only for the foreseeable future.
Bonmarché – the store went into administration for the second time in two years over the 2020 Christmas period.
Peacocks and Jaeger – With over 500 stores between them, Peacocks and Jaeger fell victim to the pandemic in late 2020, putting nearly 5,000 jobs at risk.
Harvey’s Furniture – Once the second largest furniture retailer was another casualty, with around 1,500 jobs lost.
J Crew – Whilst its parent company recently emerged from administration, the UK arm of the apparel brand was liquidated, closing 6 stores.
Paperchase – The closed 27 stores after announcing an intent to go into administration in January. The stationary retailer has since been sold to Permira Debt Managers, saving many of the 1,200 jobs still remaining, although temporarily.
Some new trends?
Retail parks fared the best during the pandemic. Consistently attracting the highest footfall levels, albeit still dramatically reduced from previous years, retail parks often were the preferred choice of customers over shopping centres and the high street. Many are predicting that open air retail parks and centres will be the most likely winners of lockdown. Cautious consumers are likely to opt to browse in fresh air shopping centres rather than their enclosed counterparts.
As previously discussed, a certain amount of reliance will be placed on improving the customer experience to lure customers back to physical stores. Customers listed Augmented and Virtual Reality as the top technology they would like to see introduced to stores and online back in 2019, a sentiment no doubt growing (NielsenIQ, 2019).