In October 2020, the Welsh Government made a decision to enforce a ‘firebreak’ lockdown that included stopping all supermarkets from selling ‘non-essential’ items, in an attempt to balance out trade opportunity for the independent retailers who had been forced to close in the lockdown too. The ban caused an immediate uproar with Welsh shoppers, but instead of forcing them to rely on giant online retailers, there was an interesting change in shopping behaviour.
And it’s not just Welsh residents who have changed their shopping habits, with Covid-19 pushing consumers to shop almost exclusively online across the UK, the question on retailers’ minds is ‘what will the future look like for shops and high streets’?.
As the ban on non-essential items in Wales remains in place going into the first quarter of 2021, the rest of the UK has seen footfall at a record low of 70% across high streets and shopping centres due to the continued lockdowns. What will the outcome of the pandemic mean for British retailers? And, when lockdowns lift, will consumers keep up their online buying habits instead?
The decline in physical shops
It goes without saying, the various lockdowns that have been in place in the UK throughout 2020 and into 2021 have had a significant impact on our physical high streets. Over 11,000 shops have closed down in the first seven months of 2020. Compared to the number of shops that opened in 2020, 5,119, there was still a loss of over 6,000 according to data from The Local Data Company and PwC UK. The overall decline in physical shops opening is a trend that looks set to continue.
Pre-covid, high street shops had long began to struggle with drastically increasing rent costs and the gradual shift to online and more people choosing the convenience of browsing the web vs. the hustle and bustle of a busy street. At it’s peak, online retail made up 33.8% of the total revenue from retail as an industry in May 2020, dipping again as restrictions lifted through to September 2020. Whilst shoppers returned to the high street when shops re-opened in the UK, September saw a big increase of online sales, up 31% compared to the same time in 2019 indicating the beginning of a shift for online shopping. This rise in online shopping sales support the idea that more consumers than ever are looking for online alternatives to browsing the rails in shops- despite a pandemic removing the option to go shopping.
Fashion Retailers Going Exclusively Online
It’s not just a shift in consumer behaviour that indicates a growing preference for online shopping as the fall out continues from the closing of global retail group Arcadia who owned brands such as Topshop, Dorothy Perkins and Miss Selfridge. This huge retailer dominated the British high street for years, creating destination-style shops that drew people from around the UK to enjoy spending hours browsing instead of being just another fashion shop. In January 2021, it was announced the group would close and the brands sold off to other fashion group notably the most popular brand, Topshop, being bought by the ASOS group; an exclusively online retailer. Not only was this a big move for the British high street in terms of the permanent closing down of shops that would have re-opened out of lockdown, but the impact on consumer trends and buying habits moving forward as fans of the brands will be forced to only shop online.
The impact on fashion consumers with their favourite retailers going exclusively online is the lack of ‘try before you buy’, being able to physically touch the clothes you’re considering and simply testing if it fits. Whilst online shopping offers benefits such as convenience and a fast experience, there isn’t an online experience that can match being able to try on shoes and clothes before committing.
Shaping The Future Of Retail Without Shops
Despite the clear uptake of online shopping from consumers, the future of retail switching online will mean a drastic decline in jobs as the presence of shops around the UK meant employment for many. In fact, in 2020 alone nearly 180,000 retail jobs were lost which is up by almost a quarter from 2019, according to the CRR. This is a significant number of people losing their jobs as a direct result of shops closing permanently, highlighting a very negative side effect of consumers turning to online shopping. Whilst this may seem inevitable as shopping habits continue to change, in Wales where a firebreak lockdown forced supermarkets to stop selling non-essential items in a bid to support local independent shops, consumer habits tell a more positive story. Conducting a mini-experiment, our sister agency, Liberty Marketing, wanted to understand just how much the firebreak lockdown would change consumer shopping habits and what would happen to independent retailers that each cater to just one market.
Using 10 of the agency’s clients, the team were able to accurately track goods bought from customers based in Wales, giving a great insight to whether the theory of protecting independent traders would work. The following findings were gathered over the first 7 days of the firebreak (17th- 24th October 2020) compared to the 7 days previously. Our team found;
- The number of users visiting these sites from within Wales increased by 44%
- The number of products bought by Welsh visitors increased by 74%
- The total revenue from Wales increased by 88%
- The conversion rate of Welsh traffic increased by 84%
These stand-out points clearly show not only were far more Welsh visitors landing on all 10 sites, but they were also spending far more money. They were motivated buyers and nearly twice as likely to spend money with these retailers than in less restricted times, supporting the theory the Government also proposed. Liberty’s mini-study highlighted growth of over 88% for online sales for non-essential items during that particular lockdown, indicating there is still a lot of demand for ‘non-essential’ shopping even with the absence of physical shops.
So, what will the high street look like once lockdowns are lifted across the UK? Well, with the closure of department stores and well-known clothes shops there will be notable absences as the economy starts to rebuild. There is still clearly an appetite for people to browse non-essential items in shops, instead of heading straight online and then there’s the need to try on items before committing to them which brands just haven’t quite nailed in their online journeys. It could be argued that online shopping is directly driven by the restrictions placed on physical shops so when they become available for browsing once more, there will be a natural decline in online shopping as many consumers enjoy an all-round shopping experience that simply can’t be replicated online.
We explore this avenue further and look into how beauty can improve the digital customer experience as highstreet moves to home, here.