Despite the challenges that 2020 brought, retail overall has shown some resilience in the final month of the year. Strong performance in grocery and record-breaking online sales for non-food meant that Christmas 2020 was the most digital ever.
Having entered 2021 under renewed lockdown restrictions, retailers will be looking to consumer behaviours during the pandemic to predict which new trends are likely to emerge, and which will carry over. For some consumers, the move to remote work has strengthened their ability to both save and pay down debts. For others, lockdown periods provided an opportunity to experiment; be that with online shopping, exploring new products at home, or even trying out new looks. Combined with greater consumer interest in buying locally, the question for retailers is where to focus efforts in the year ahead.
Some consumers will have permanently converted to the convenience of online shopping, accounting for 29.6% of all retail sales this month, and the highest annual growth since 2008. For retailers, this doubles down the importance of an online shopfront and engaging virtual shopping experience. Whilst the role of the physical store will remain competitive, the wider retail landscape will likely see reinvention. A new era of ‘hyper-localisation’ and ‘fast fail’ shops could herald a revived and more relevant high street longer-term.
For now, pent-up demand is likely to see shoppers out in force once restrictions lift, as we saw in summer at the end of the first lockdown. Crucially, the reopening of the high street will this time coincide with the ongoing vaccine rollout, which should boost consumer confidence and see them return to stores once more.