• Paul Kelson

UK shopper habits changed for good, forcing retailers to transform or die, report warns

Forced digital behaviours during the pandemic will accelerate pre-existing digital behaviours, especially when it comes to ecommerce and digital payments – and UK firms will need to catch up with shifting them ASAP to stay in business.

So warns the latest research from Forrester, which has found that the pace of change of consumer habits shows no signs of abating, with more to come. As a result, businesses have to rebalance their store and online presences and, while local businesses are starting to go digital, for many it may be too late.

According to Forrester, 15% of UK online adults have purchased groceries online for the first time during the pandemic. For these digital newcomers, just over one-third (34%) say they will go on to purchase much more online in the future. This shift, plus the expected raft of store closures coming down the pipe, will force retailers to have to rely more on their digital presence.

This throws an existing quandary into greater focus: how to redefine the role and number of stores a retailer has, when overall growth was already driven by digital before the crisis. The surge in digital traffic and demand across key retail sectors during the pandemic gives a misleading impression that consumers will shift dramatically to buying online post-pandemic. In fact, 47% of UK online adults are hoping to return to normal shopping habits.

Local lagging

There is also mixed news for local and smaller retailers. Thirty eight per cent of UK online adults want to support affected local businesses during the pandemic. However, many local shops are just starting to digitise their business, and many will disappear due to the recession, says the report. The crisis will favour the largest retailers that can access cash and loans, have the scale and scope to offer cheaper prices, and have already pivoted to digital.

Governments are trying to help, but cash flow is king, and retailers in weaker positions have already gone into administration, including Debenhams and Cath Kidston.

Conscious consumers

Consumers will also increasingly care about the meaning and impact of their purchases and the values of the companies they engage with. As well as environmental and local community impact, how companies treat their employees during and after the pandemic will also feed into how consumers perceive a brand.

For example, the UK supermarkets prioritising vulnerable customers for online home deliveries during lockdown and Morrison’s creating a hardship fund for employees needing financial support. Brands will need to consider the tone, added value content, and authenticity of their communications and actions. More than ever, they should embrace the modern marketing mantra of being human, helpful, and handy.

How can retailers adapt?

Forrester’s study doesn’t just lay out how dire things are for retail, it does offer some handy hints as to how things may be made to work.

Top of the list is the need to move beyond agility and become adaptive. “In times of unprecedented change, firms must constantly evolve,” explains analyst Michelle Beeson. “The key constant transformation is culture.31 Future-fit leaders inspire customer obsession through their bias for action. They embody change, foster collaboration, take specific steps to train and enable employees, and transparently accept responsibility for customer outcomes.”

Beeson also suggests that retailers need to reboot digital. “Prior to the crisis, 31% of UK services decision makers had either not started the execution of their digital transformation or considered it completed,” she says. “Businesses that have not already embraced ongoing transformation or have delayed it altogether will suffer the most. The crisis will force businesses to step up the execution of strategic plans for digital customer experience and operational excellence.”

https://internetretailing.net/themes/uk-shopper-habits-changed-for-good-forcing-retailers-to-transform-or-die-report-warns-21572

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