The Deloitte Center for Retail and Consumer Products conducted a study to identify future trends in retail and consumer shopping preferences after emerging from COVID-19. These insights were determined using Deloitte’s InsightsIQ, which monitors real-time consumer, marketplace and economic data sets.
Retailers are preparing for the “new normal” and with that comes trends to further prove the need for physical experiences and an omnichannel approach.
Nearly 60% of retail square footage was forced to close in the US amid the pandemic, which allowed brick and mortar to redefine their role in the market. Many retailers were compelled to be inventive with their stores, using them as fulfillment centers and last-mile execution initiatives. Even with the shutdown, brick and mortar is far from dead — especially with physical stores still accounting for 85% of overall retail sales. E-commerce has been just one building block to propel the role of physical stores, bringing inventory closer to the end consumer.
Digital spending increased significantly with consumers staying at home during the pandemic. There was a demand for brands to increase their digital ad spend during this time, to make up for loss in sales at physical stores. However, when combined with the growing costs of shipping and fulfillment for online orders, it’s becoming difficult for brands to find the funds for ad spend on top of all of that. There’s been an ever-growing pressure to increase online revenues during this time, with digital spending being a part of that, however, it is becoming more expensive and even less effective.
With technological advancements and the ever-changing range of channels on the market, consumers have a wide variety of ways to shop from their favorite retailers. Currently, 73% of consumers use a mix of physical stores, e-commerce, digital apps, social commerce, and marketplace platforms to buy products. This not only adds to the competitive mix but allows retailers to use a multi-channel approach to appeal to consumers and increase brand loyalty. A more personal shopping experience is a consumer’s number one priority in 2020, according to RIS News. Therefore, retailers need to deliver a seamless omnichannel experience to meet demanding consumer needs.
A major distinctive factor in successful retailers is their ability to position inventory close to the consumer. Enhancing physical, personal experiences throughout various channels will be the key to be ahead of the retail game for the remainder of 2020.
Source: Deloitte Insights Study – Defining the Future of Retail, RIS – Building a Digital Blueprint E-Book
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