There are a few things you’ve probably heard a lot in the last couple months: these times are uncertain, and things are changing, maybe for good. We’re all wondering, which changes are temporary? Which will be permanent?
Forrester predicts that retail will see a $2.1 trillion loss globally in 2020 due to the Coronavirus pandemic.
As active participants in the retail environment, it’s our job to dig into these changes. We are seeing them happen in three main ways:
1. Availability
One of the main shifts we are experiencing is the consumer journey becoming not so much about brand and price anymore as it is about availability. This has happened very quickly, as the onset of the pandemic immediately interrupted supply chains.
In March, the global pandemic had disrupted supply chains for 75% of companies (Fortune).
In the past, brands would spend years, even decades, trying to get people to try their product. Now the automatic winners are those with availability, and consumers are losing a great deal of their ability to choose.
We interviewed one consumer who said, “with a lot of different products I am going through a forced trial.” Shoppers are forced to choose from limited options, to “settle for the off-brand with force-trialing,” and many of those options aren’t even fully fleshed out.
2. Essential Products
Product categories are getting noisier and more interesting, and everyone wants to be in on the game. Take masks for example. New competitors and businesses are emerging daily. For instance, masks for athletes are showing up in specific materials, different sizes – from little leaguers to adults – and specific designs for ease of use and even team spirit. Shoppers are scrambling just to get the right thing, when the right thing isn’t even clear. The volatility of retail right now is upsetting everything we thought we knew about the consumer experience.
According to Market Study Report, the face mask market is expected to surpass $21.2 billion by 2026.
Retail is saturated with new, “essential” products, but as marketers, we know that we need to think about how to bring back products as well – the ones that we all used to consider essential. We predict that companies will go back to their core and try to remind us of that feeling of comfort and can’t-live-without: the old essential.
For the luxury goods industry, sales for this year’s spring season are as much as 70% lower than last year (McKinsey)
The luxury product market is not only affected by peoples’ financial freedom, but by their ability to travel and shop in person. How long will it take before consumers start buying “non-essential” products again? Will the luxury market resume with travel? Or will companies need to adapt to catch that group of consumers?
3. Online Sales
Already, we can see that businesses are moving quickly to adapt to the digitization of the retail space. People are resorting to the internet to purchase everything from cleaning supplies, to birthday gifts, to groceries, and companies are beginning to accommodate this shift.
According to an April 2020 OpsRamp survey, 61% of businesses plan to accelerate spending on digital transformation to support the transition to fully digital customer interactions.
Business leaders need to not only accommodate the current influx of online shoppers, but plan for the future of digital retail post-coronavirus. They need to look to the products with the most year-over-year growth in online shopping dollars – books, cleaning, sports and outdoors, toys and games, and grocery* – for direction.
We will continue to track these quickly changing retail trends so that we are prepared to help our clients’ sales soar for the duration of 2020.
*Rakuten Intelligence
About Weber Associates
Weber Associates is a Columbus, OH-based consulting firm. Since 1985, we have blended the creativity of a marketing agency with the analytical rigor of a consultancy to help our clients solve real sales and marketing challenges so they can significantly grow revenues and customer loyalty.
