This article is originally from RIS News.
After a year of on-off restrictions, retailers may be hoping that the reopening of retail brings with it a spending splurge.
And it’s the case that some 53% of consumers are now buying things online more than normal, with almost 8 in 10 shoppers (78%) expected to increase online purchasing over the next 12 months, according to exclusive consumer research from Brightpearl.
However, despite the increases in online shopping habits, U.S. consumers are planning to save money as restrictions unwind.
78% of shoppers still say they will need to be “very careful” with their money over the next year and 49% have already cut down on “frivolous” spending, and are much less likely to be splashing the cash.
Travel is the area that consumers plan to spend the most on when they are released from lockdown with 40% expecting to spend more this year than they did pre-Covid.
DIY, a sector that has boomed throughout the pandemic, looks set to be retail’s top performer as we become a generation of “DIY-ers” after a year spending time and money improving our homes. A third of shoppers said they would be spending more on home, garden and DIY products this year than they did pre-Covid, supported by Mad4Tools.com reporting a 250% increase in sales during the pandemic.
On the flip side, it looks like the luxury sector could suffer again next year, with a third of shoppers planning on cutting spending on luxury items such as designer bags, watches and high end jewelery, especially if they can’t take these items out to show.
In 2020, those who regularly shopped online jumped from 31% Pre-Covid to 48% as store closures forced people to turn to e-commerce to buy what they needed. After a year of shopping this way, it seems this behavior has stuck.
With some insights sure to concern Main Street retailers, more than half of shoppers (55%) are now buying things online that they only previously bought in-store and 38% of buyers are less likely to shop in-store than they were before Covid.
In our research, we found that 78% of consumers will be buying online more frequently over the next year, with 20% claiming they’ll only shop online within five years, proving that the online retail channel is more powerful than ever.
Amazon still dominates online, and is set to be an even bigger winner over the next twelve months with 56% of consumers saying they will use it more in 2021 but 30% of shoppers say they do feel “guilty” about abandoning physical stores for the ease of Amazon.
Despite the success of online retail since the start of the pandemic, 61% of consumers have experienced some problems buying from brands online — with a quarter of shoppers having been let down by an online order since the crisis started.
Delivery reliability has created a crisis of confidence amongst some consumers, with 48% of U.S. buyers now saying that online deliveries take longer to arrive since the crisis.
It’s not a stretch to say that today’s e-commerce market is fraught with fulfilment issues as more online demand causes costly errors. As consumers move online, vendors must process increased demand of online orders more quickly — and that can lead to mistakes.
If you’re running out of stock or shipping to the wrong addresses on a regular basis, these mishaps are often down to ineffective workflows or human error that really should be automated to increase speed and accuracy.
There has been a big shift to online post-Covid but concern over delivery reliability has created a crisis of confidence in some consumers, and brands could still suffer or miss out on this digital opportunity if they don’t improve service, especially after the Buy button. As the data shows, on the delivery side of the equation, that simply isn’t happening at the level it should be.
One of the main shifts in spending habits since Covid has been the switch to more local shopping and a move away from malls.
Incredibly, 75% of shoppers plan to spend more at local shopping streets than before the pandemic and 71% say they will increase spending with independent retailers, illustrating that the trend towards localism is here to stay, which is likely to continue to be reinforced by our own remote working habits, which are set to remain for the foreseeable future.
With shopping malls proving less popular, 56% of retailers plan to close physical stores in 2021 in response to plummeting footfall, with two thirds of shoppers (66%) saying they won’t visit a mall next year
Our data suggests retailers will look to embrace localism, with many already making plans to move stores to high street locations with increasingly strong foot traffic. In our research, almost 1 in 5 said they plan to move stores out of major city centres and into local shopping streets within the next 12 months.
Retail parks have also proved to be resilient destinations during the pandemic as shoppers felt safer driving to such stores which tend to be more spacious, and this aligns with our research findings which reveal 41% of shoppers also plan to increase their use of buy-online-pickup-in-store services over the next year.
Some retailers may be hesitant to make changes post-Covid, looking at the trends above as being temporary blips. However, only 27% of American shoppers say they will continue to shop as they did before the crisis, even when things return to normal, so sellers must be prepared to adapt to this once-in-a-generation retail transformation. Those that do will see the most success long-term.
Written by Derek O’Carroll , who is CEO of Brightpearl, a retail operations platform for retailers and wholesalers
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