How have retailers emerged from lockdown and what’s next?

Non-essential retailers have now been open for three business weeks. Britons also now have the opportunity to head to pubs, bars and restaurants, as the official reopening of these establishments has begun with many of them taking a look at what went well and what didn’t as fashion brands reopened their stores.

ZigZag took a look at what has happened over the last few weeks, and what lasting effects will remain after lockdown, as retail pushed its high-street shutters up and allowed the first wave of eager shoppers to browse their aisles. 

Making the shopping experience as safe as possible

Jace Tyrrell, Chief Executive of the North West End Company talked about how they helped retailers get ready for retail’s 15th June reopening. The business acts as the “voice for London’s West End, representing the world’s largest retail destination, including Bond Street, Oxford Street and Regent Street.” Talking on Essential Retail’s “How do we get Britain shopping again” Webinar, Jace outlined how they made a lot of changes to make the area as COVID-19 secure as possible and help start to reignite consumer confidence. 

The North West End Company added signage across the area to ensure people are reminded of social distancing measures and walk in the correct direction down narrow aisles or streets. Plenty has been done around ensuing queuing protocols, with additional security and social distancing ambassadors added around the area to manage queues and safe places. Sanitisers have been added to every lamppost on the high-street whilst pavements have been doubled in places to allow for the movement of more people whilst maintaining 2m distancing. Many retailers around the UK have followed these safety guidelines and best practices so far, although many experts agree that the current 2m social distancing guidelines will harm retail sales as the year goes on.

The carrier network rose to the occasion

Carriers dealt with reduced workforces, short timelines to implement social distancing measures in warehouses and distribution centres, closed PUDO locations, regions in lockdown, and a boom in the total volume of parcels. Despite the many challenges, couriers worldwide kept in operation, adapting policies immediately to allow for curb-side deliveries and collections, contactless signing, safe zone drop offs, and the ability to switch the package receiver. Delays on the whole were kept to a minimum. 

ZigZag reported on our carrier network on a bi-weekly basis during lockdown, and was impressed by the high delivery rates, dedication to keep surcharges to a minimum, and quickly implemented safety measures. The performance of the carrier services will be a key factor in changing consumer behaviour. Many shoppers will have been impressed with the convenience and speed of shopping online during a pandemic, and many experts are predicting a permanent shift online partly due to the performance of the carrier services.

UK retail’s reopening

The 15th June marked the day that non-essential shops could reopen. However, just because they could, did not mean they did. Reopening stores is a lot more operationally challenging and expensive than closing. Retailers had to work out the return on investment at each store location. Demand for non-essential brick-and-mortar retail was hard to predict and social distancing may have been too costly or difficult to implement at some stores. Moreover, with stores closed for over three months, retailers had to consider which stores were best stocked and indeed what to stock moving forward. 

Primark, JD Sports, GAP, Topshop, and Ted Baker were among the names of retailers that opened all stores, whilst Mulberry, H&M, and River Island phased the opening of the majority of their stores. Some retailers decided not to reopen many of their stores, Next opening just 25 of their 500 stores, to assess demand and take more time implementing social distancing measures.

The world’s biggest Primark in Birmingham had so many customers queuing up in the early hours that they had to open before they had planned, and Manchester’s TK Maxx and Footlocker and some of London’s flagship stores had hour long queues. Whilst footfall was down 54% from last year, it was still a 45% rise on the previous week. Drapers reported “Footfall across the UK rose by more than 30% each day from the same day the previous week, apart from Thursday, when there was heavy rain” during the first week of the reopening.

The rise of eCommerce

ZigZag has seen spikes in eCommerce orders for its retailers, online order numbers replicated for many brands across the industry, as more consumers got comfortable shopping on their phones, laptops, and tablets. 

There have been several reports and statistics on consumer confidence in the last month. Buy.com reported that 72% of consumers did not plan on going to the shops for their big reopening, with 64% of people saying they don’t plan on going back for another one or two months. Scurri worryingly reported that 20% of people will never shop at brick-and-mortar stores again, with two-thirds of people stating they will only go to shops with strict safety measures.

With consumer confidence in the safety of stores at an all-time low, the shift online is likely to be permanent. Although it should be recognised that most of the new behaviour has been forced, and so has less chance of being permanent, most consumers will have been impressed by the online shopping experience. Initial barriers preventing them from shopping online have been broken, as banking details have been entered and new accounts have been created.

The new consumer

Stuart Gordan of iAdvize stated on IMRG Customer Acquisition and Retention webinar that “consumers are watching businesses closely to see if they put customers first”. Customers are likely to base more purchasing behaviours on their feelings towards companies. Social justice issues, environmental issues, and the need to feel safe in stores have taken centre stage. Retailers need to be able to prove they are getting this right, or they risk losing customers. 

With more consumers shopping online than ever before, Ultra Commerce believes that it will give rise to a new, savvier consumer. It is a lot easier to compare prices online than in-store, and many will have multiple tabs open, budget sheets ready, and delivery and return policies considered before making a purchase. Consumers have also been exposed to long discount periods that might be hard to shake for some brands. Additionally, around 70% of consumers are concerned about the economy, which may lead to more informed and careful purchases, especially in fashion.

Has every week been like Black Friday?

With the vast majority of big fashion labels holding on to excess stock from either January and February’s low sales levels or from the three-month long lockdown keeping stores closed, discounting has been commonplace. Whilst some retailers, in the shape of GAP, have chosen not to discount clothing but to instead hold the stock until next year, many have hosted lockdown long discount sales.

However, whilst it might have felt like every week has been like Black Friday, the online sales, particularly in clothing have not quite met those heights. IMRG has stated that every week in lockdown, the amount spent online has been 30-45% of what is spent during Black Friday week in clothing. Whilst electronics has been nearly doubling YOY figures now, 2019 Black Friday for electronics is still 350% more than current figures. So, despite closed physical stores and heavy discounting and advertising, most retailers have struggled to get close to replicating Black Friday sales volumes.