Consumer confidence in physical retail may be down but it is certainly not out, and mindful, responsible buying decisions will drive the future retail landscape.
Before March and before lockdown, “omnichannel” was not a term you heard very often unless you moved in retail industry circles and you were reading industry projections for the coming years. Because of Covid-19 digital transformation has not only been a factor changing the traditional workplace, but digital commerce and online shopping are very much at the heart of the future of retail. Hence, omnichannel and why retailers need to be getting ready now.
“The sudden, significant decrease in people’s confidence in visiting physical stores – and especially restaurants – underscores the need for businesses to focus on their digital offerings”
In effect, retailers need to be ready for anything and must certainly have strategies to keep trade flowing in a world where the spectre of lockdowns will not dissipate any time soon.
But not only that. Health and economic concerns have made shoppers shrewder, mindful and more discerning and as well as embracing digital retailers will need to understand customers better and match their values.
Consumer confidence shook by pandemic
That’s why research last week from Deloitte as part of its State of the Consumer tracker, based on a survey of 1,000 consumers in 18 countries, made for arresting reading.
The study found that confidence in visiting physical stores is at 59pc, down 3pc on the previous wave of research, which was conducted two weeks earlier at the beginning of August. 46pc said they would purchase more from brands that have responded well to the crisis (up 4pc), with 44pc willing to spend more on convenience (down 2pc).
40pc reported feeling safe going to a restaurant, a decrease of 4pc on the previous wave. Meanwhile planned expenditure in restaurants has decreased significantly from the previous wave falling by 13pc.
Nearly a quarter (24pc) are worried about making upcoming payments, up 4pc on the last wave. 41pc reported that they were delaying making large purchases, which is also an increase of 4pc. Those worrying about job loss is at 31pc, down from 32pc in the previous wave.
“Consumer confidence is extremely fragile and sensitive to changes – that is clearly evidenced by the results of this latest wave of the Consumer Tracker,” said Daniel Murray, partner and head of Consumer at Deloitte Ireland.
“While we saw overall confidence grow and remain steady as we emerged from the national lockdown throughout June and July, a recent uptick in Covid-19 case numbers and the implementation of localised restrictions across three counties have taken their toll on consumers in Ireland.”
Interestingly confidence in air travel has increased slightly, with 22pc saying they would feel safe travelling on a plane, up 2pc from the previous wave. Confidence in hotel accommodation has remained consistent at 40pc.
“The sudden, significant decrease in people’s confidence in visiting physical stores – and especially restaurants – underscores the need for businesses to focus on their digital offerings as strong, viable alternatives for customers. However, attention to business premises must not slip – some customers will still wish to visit in person, while some may have no other choice due to issues with internet access, for example. It is vital that business owners continue to ensure their premises are operating in line with public health guidelines and are as safe and convenient as possible for visiting customers.
“The increase in those delaying large purchases and concern about job loss will be felt across all sectors – a disappointment to businesses who were negatively impacted by having to close or operate under extreme limitations during the lockdown. However, we note that consumer confidence is sensitive to change, and this applies in a positive sense also – businesses who succeed in winning and maintaining their customers’ trust will reap the rewards once confidence starts to grow once more,” Murray
Health, wellness and community
“Retailers now need to be good at not just buying and selling products, but also adept at online fulfilment, data analytics, social media and flexible with their supply-chain/processes”
Bank of Ireland’s head of Retail Sector Owen Clifford said it was understandable that consumers’ confidence has been shaken.
Owen Clifford, head of Retail Convenience sector, Bank of Ireland
“The health and safety of staff and customers is of paramount importance to all retailers. The consumer will be seeking an accessible, frictionless experience – they will want to feel safe and will expect excellent hygiene and in-store standards – especially as we move into back to school/winter season.
“Retailers mobilised really quickly in March/April with Perspex screens, one-way systems, increase in contactless to €50. This will need to be maintained and further developed over the next few months. The continuous training and development of staff will be an imperative – constant feedback from staff and customers will be key – all retailers will need to ask ‘how can we serve you better and ensure your expectations are met?’”
Clifford said that the move to digital cannot be ignored by retailers and if anything it sets the groundwork for innovation.
“Progressive retailers recognise that they will need to use their online platform as a catalyst to drive sales and to actively stay engaged with their customers (especially those hesitant to enter physical stores at present).
“They need to provide a variety of channels/options to their customers – click and collect, delivery, virtual demonstrations/consultations and investigate pop-up store, partnership options etc to meet the accessibility requirements of the 2020/2021 Irish consumer.
“Retailers now need to be good at not just buying and selling products, but also adept at online fulfilment, data analytics, social media and flexible with their supply-chain/processes,” Clifford warned.
“As we look to the future, Covid19 has reminded us all of the importance of health, wellness and community. Irish shoppers will certainly be more mindful of their sense of value to the community and the planet in their purchase decisions in the future.
“Aspects such as product authenticity, product traceability, healthiness and impact on the environment will all feed into our shopping preferences,” Clifford concluded.
“It is incumbent on retailers to make the Irish consumer aware of their efforts/bona fides in this regard. Roosevelt’s advice that ‘People don’t care how much you know until they know how much you care’ has never been more relevant across the retail landscape.”
Written by John Kennedy (john.kennedy3@boi.com)
Published: 8 September, 2020
