Initially I originally started writing this blog post in New Zealand’s eye of the storm: the 102 days with no community transfer of Covid-19. This false sense of security created a warm blanket nationally which allowed us to stand back and look at the world around us with a level of distance, geologically and observationally.
However, over this 102 days and beyond it has been interesting, to say the least, to see how the retail industry has adapted in 2020. Businesses, just like many of our colleagues working from home, have either flourished in these new circumstances or faced some of the biggest challenges they’ve ever had to deal with in the workplace. Whether flourishing or challenged, all businesses know that retail will probably look very different in a post-Covid world.
Standing back and looking at this very unusual year there is one rarely mentioned silver-ish lining that I’ve thought about a number of times: there has never been a time in history where we have been more able to adapt than now. If this pandemic had hit even just a couple of decades ago there is no way that so many people could have moved to working from home with just 13 ½ hours’ notice, like we managed to do for Lockdown 2.0, or to be able to order almost every imaginable product from their phone with relative immediacy.
We know that the retail landscape will look different after this pandemic passes, and while we don’t know exactly what that looks like (because let’s be honest this year has really been throwing some massive curveballs), there are some interesting trends that immediately emerged internationally that we can learn from.
First of all, e-Commerce. This one feels very obvious, but just in May e-Commerce grew globally by 81% year on year, primarily driven by lockdown interests, with sportswear and sporting goods up 216%, housewares and DIY supplies increasing 190%, and gaming up 84%.
Falling in line with consumer needs, brands are adapting in different ways. Whether that is building their own e-commerce options, such as my favourite local surf brand Black Swamp Surf finally launching their own online store, or to the very popular The Iconic moving away from their standard eDM approach to more of a tailored approach, such as actively pushing their active-wear collection. On a more sophisticated scale brands are also attempting to re-create retail experiences in a virtual world to create hype and interest – Suntec City in Singapore did this by modernising old-school infomercials but where users could comment and like, as well as win prizes via interactive live-streamed events. In the UK retailers are re-training staff to become virtual retail assistants, such as John Lewis and Selfridges who have created appointments where people can have access to personalised shopping experiences with specialists in everything from beauty to nurseries to home design. These virtual concierge services are one of the aspects of Covid-driven e-commerce that may move to helping time-poor consumers once we move into a permanent time where shopping in mall is no longer a health hazard.
We know that brands are changing their approach, but how are consumers reacting? Interestingly and probably unsurprisingly it appears they are becoming less brand loyal. While a 2019 survey reported that consumers were becoming more brand loyal it appears that Covid-19 has put a halt to that, as consumers strayed from standard shopping patterns. Obviously there are numerous factors for this: items being out of stock, stock-piling, economic challenges, or product longevity contribute to people’s product repertoire adapting to new challenges. It appears that consumers, just like brands, are having to ‘pivot’ their way through 2020.
Globally we have seen many brands are having to get inventive at the moment, which has also driven an increase in brand collaborations. Businesses are finding it challenging to connect with audiences right now, probably none so obviously that live sport, so it is interesting to see the new and inventive ways they are connecting with their audiences. For example the NBA teamed up with Microsoft now that the basketball season is back up and running within a massive bubble in Florida.
Over 300 fans can log into Microsoft Teams and appear on the league’s 5.2m long side-line video board to cheer their team on. Team’s ‘Together Mode’ seats fans in a virtual area where they are able to interact with each other as well support their team. Additionally the video board is then sponsored by Michelob Ultra which selects seats for prizes and giveaways. Games are now also shot on over 30 cameras, getting fans closer to the court than before.
In addition to collaborations to create a better consumer experience, we’ve also seen businesses react to having an unreliable consumer base, which has meant something fairly unusual: business relying on other businesses for support over this time, and remarkably we’ve seen many of these partnerships pop up this year. Out-of-home suppliers have been hit hard by lockdowns, but have worked to support local businesses by utilising their network of inventory to ensure small brands are given a much needed voice, helping to solidify the concept of “Shop Local” that so many businesses will be relying on, however a recent survey in July found that 97% of Kiwis are continuing to shop local to support small businesses as they recover.
Starcom’s recent work with Visa has also been focussed around bringing people back to local businesses, with the ‘Where you shop matters’ campaign. Outside of the campaign that showcased a number of local businesses Visa also launched a range of free tools, such as e-commerce starter packs, ad booster programmes and business locator tools. Some business owners are even reporting an increase in business over lockdown, driven by access to Visa’s e-Commerce tools.
It’s heartening to see large global brands, as well as our own local businesses looking after each other at this time, hopefully a trend we see continue moving forward.
