The future of Retail
How will retail look moving forward?
The last few months have certainly been an unprecedented time for the retail sector, with even more uncertainty shadowing the immediate future of the sector. Writing for Forbes, Michelle Evans writes, “New consumer behaviours formed during the pandemic will become habits the longer these measures last”. This begs the question, what will change?
Supply Chains; China has been placed at the centre of the COVID-19 crisis, since joining the World Trade Organisation in 2001, China has elevated itself to be the second largest economy in the world as of 2019, only second to the USA (find source). As a result of Chinas membership, The Times notes many “Western nations that have seen their manufacturing bases eroded by reliance on cheap Chinese manufacturing are rethinking whether that dependence is safe”. The UK’s Prime Minister Boris Johnson has also ordered civil servants to draw up plans to end the UK’s reliance on China for a huge number of goods. Could other emerging economies such as Brazil and India take China’s throne as a manufacturing superpower?
Contactless Payments; Contactless debit card payments are now a part of everyday life, with consumers even using their smartphones to pay for goods. “Contactless cards accounted for just under one-third of credit card transactions and getting on for half (46 per cent) of transactions on debit cards, UK Finance said”. The UK raised the limit of contactless card payments from £30 up to £45 from Wednesday 1 April. The change was intended to reduce consumers’ exposure to Covid-19, however, its popularity is unlikely to signify any backward changes. Contactless payments are likely to grow further as consumers become wary after exiting lockdown.
Store Visits; Shopping in physical stores is likely to be drastically affected for the foreseeable future, particularly until social distancing measures are relaxed. Social distancing measures in the UK requires citizens to be 2m away from people in other households at all time. Clearly, this will greatly affect how many consumers are allowed in stores safely. Consumers are also anxious about returning to physical stores, particularly as the same products are available online with more choice. Retailers will have to go to great length and expense to satisfy consumers it is safe to visit their stores.
The rise of click and collect? Many stores currently offer a click and collect service, however, The Telegraph writes that “consumers have left around £228 million worth of items over the past year, research suggests, with many citing frustrations over poorly staffed collection points and long waiting times”. Moreover, “according to official figures, click-and-collect is growing in popularity among pensioners, who are increasingly using it to do their clothes shopping”. Pensioners are among the most vulnerable groups to COVID-19, its popularity is likely to grow even quicker following the lockdown.