Last week the ONS confirmed what commentators had predicted since April: retail is back.
Non-essential retail stores reopened on April 12 after more than three months in hibernation, and shoppers eagerly reacquainted themselves.
Quarter-on-quarter, and even year-on-year, comparisons veer from slightly to entirely redundant given the lockdown hokey cokey in the UK, yet when set against performance from 2019, Q2 2021 was still remarkable.
Shoppers want to shop
During the worst of the pandemic e-commerce was a lifeline to consumers and businesses alike as they adapted to their respective circumstances, and it gained the column inches it deserved for growth during this most tumultuous of periods.
However, when shops are open this is where consumers are opting to spend:
Of course, this is more pronounced in some sectors than others: the percentage of retail spend in grocery doubled in the initial ‘panic’ phase of the first lockdown, but has declined since and plateaued at 10% of spend in the category. Meanwhile e-commerce represents 30% of all spend in the clothing sector, but this too has flatlined since stores reopened.
The other point worth considering is that it’s not just which channel the spend comes from, but how much that spend is.
We are not yet seeing footfall return to pre-pandemic levels as residual caution persists, but in-store spend has exceeded benchmarks from the same pre-pandemic period: spend per visit is increasing.
The dormant, latent, pent-up spending power that consumers have accrued after 18 months of prudence is being unleashed, but it won’t last forever.
As the furlough scheme winds down in the autumn, the financial realities of the pandemic will begin to trickle through via retailers and increased inflation to consumers at a household level.
This summer is the time to make hay while the sun shines for retailers, and to reassess what a ‘new normal’ really looks like for your business, your shoppers and the way – or ways – they will engage and transact with your brand.