It’s safe to say that the consumer, retail and leisure market has been drastically hit by the COVID-19 pandemic, with new guidelines causing reduction in physical footfall as online purchasing is favoured. With Christmas approaching and new challenges continuously appearing, I have put together a brief overview of some of the key insights and predictions for the consumer market, as well as some guidance on how to deal with the road ahead.
Since the start of the crisis, online platforms and e-commerce players have dominated retail sales, and the holiday season is set to look no different. One study has suggested that up to 75 percent of UK consumers will avoid doing their Christmas shopping in-store this year. With supply chains already disrupted and the UK shopper showing a tendency to stockpile, there may be a way for businesses to minimise disruption, primarily through strategic promotional activity and better forecasting in regards to product demand and logistical requirements. Taking inspiration from e-commerce giant Alibaba, who turned their ‘Single’s Day’ event into a month-long shopping festival, could the solution prove to be an extended Christmas shopping season, as UK businesses entice customers to place orders early with promotional gifts and coupons?
It’s perhaps not surprising that one of London’s main airports have announced redundancies, as according to news reports, passenger numbers are down 80 percent. As it currently stands, travel consumption doesn’t look to be rising, as recent KPMG study showed that 30 percent of UK consumers (and 23 percent consumers globally) do not feel confident enough to fly. Plus, with the recent government announcement that duty-free bargains are set to end on perfumes, clothes and electronics on the first of January, an already fragile industry may need to adjust to another blow. As a result of this, consumer businesses which depend on global travel as a key driver for revenue and innovation will need to work even harder to minimise their exposure.
Data from late September shows work commuting is still down by 35 percent in the UK – meaning that the flow of consumers travelling to physical office spaces remains well below pre-pandemic levels. Although this has proved a blow to businesses which rely on commuters’ footfall, we’ve also seen some businesses rethink the typical customer day and pivot to target consumers in a different way. Breakfasts served in local pubs, coffee shops offering subscription models, restaurant offering at-home meal kits; not only should businesses be thinking outside the box regarding product innovation, brands should also consider different pricing and packaging models to keep customers engaged.
Manufacturers, hospitality businesses and retailers alike invested to quickly make their premises COVID-19-secure, with Perspex screens, adequate social distancing and increased hygiene measures being put into place. This has all been shown to be with good reason, as KPMG’s research continued to show that safety and trust remained as key factors that influenced consumers’ purchasing decisions.
But, as we look towards a new reality with safety measures in place for the long term, what role could technology play? Could you soon be walking through UV portals that sanitise you as you shop with no fuss? We have already seen an introduction of virtual fitting rooms through augmented reality technology, and for many, stripping off in a curtained cubicle was never that fun! These developments are critical for businesses who must adhere to safety guidelines but do not want to alienate customers already tempted to move online.
If you would like to discuss any further insights around the consumer, retail and leisure market, please feel free to reach out.
