Lockdown vs lockdown: Industry experts predict a UK retail renaissance

Despite the temptations of an imminent return to shopping in ‘real’ stores, March online sales still boomed 0.6% against February’s sales and over 60% against the first month of Lockdown 1.0 last year.

Recent Office for National Statistics (ONS) retail sales figures for March reveal the value of online sales boomed by 62% against the same month last year, which was the first-ever lockdown month.

The British Retail Consortium estimates UK retailers have lost £27bn in sales over all three lockdowns, with 67,000 retail jobs lost last year alone. 17,532 chain store outlets closed across the UK’s down-and-out high streets and retail parks. Now with more than half of the UK’s adult population having received at least one of the vaccine’s two doses, and with 21 June earmarked as the date when the UK opens up again, industry experts are vouching for a high street renaissance for retailers. 

ParcelHero’s head of consumer research, David Jinks, notes how March 2021 was the largest monthly online sales growth since June 2020, which reveals evolving consumer trends for independent retailers to clock on to make the most of summer sales.  ”March’s sales results were positive in general, with the value of all sales – both online and in-store – up 5.5% over February. Even more fascinating is that these figures allow us to compare how we shopped online this year against March 2020, the first month of lockdown across the UK,” he said.

Some analysts had been expecting a slump in e-commerce year-on-year sales growth as, back in March last year, non-essential stores had closed and everyone was suddenly forced online for the first time, said Jinks. ”Instead, this March crushed web store sales values for March 2020.”

“Last March, online sales took just 23.1% of the UK’s entire retail spend; this March, that figure had climbed to 34.7% of consumers’ overall spend.”

March’s retail figures are just the warm-up act. High street retailers are really waiting for the ONS retail figures for April, when they are released next month, according to Jinks. ”Footfall soared over 80% during the first week that non-essential stores reopened, but the early signs are that in-store shopping was still down by 25% on 2019’s pre-Covid levels. April’s ONS figures will help give a fuller picture.”

‘Only stores that embrace their websites as their most important shop window and ensure their online service matches the standard of their in-store experience will survive in the long-term.”

Clothing sales increased by 17.5% last month, boosting overall retail sales by 5.4%. For Melissa Minkow, retail industry lead at CI&T, this is a sure sign of the pent-up demand for consumers eager to buy new outfits ahead of lockdown’s easing. ”With non-essential retail now open, we’re seeing this play out in brick-and-mortar. The excitement and morale boost surrounding the cultural aspect of shopping has certainly been the key takeaway since shops reopened,” she said.

“The sense of normalcy provided by brick-and-mortar retail is being welcomed with open arms, but too much damage was done to stores during lockdown to say which businesses will ultimately survive in a vaccinated world.”

”Success in retail has always been a long-term game, so while we’re seeing a significant boost in footfall, the sustainability of these numbers is questionable. The most resilient brands have and will continue to invest in e-commerce and the experiential component of brick-and-mortar that consumers have had to forgo over the last year.”

Sachin Jangam, associate partner for Retail at Infosys Consulting warns that retailers will need to take a more active approach if they are to sustain this initial spike in sales. To attract the modern customer, simply supplying products is no longer enough.

“After months in lockdown isolation, and with many consumers sitting on savings pots and eager to step out of home, it’s no surprise shoppers have been keen to start spending again, particularly on new outfits,” he stated, noting the spike in online sales in clothing.

“The growth in sales we’ve already seen will likely continue for some months. Especially as stores, particularly fashion retailers, are expected to run higher levels of promotions in order to clear seasonal inventory.”

“However, the question we must ask is – will this boom continue past the initial post-lockdown excitement?”

Once the renewed novelty of physical stores wears off, UK retail could see a decrease in footfall, as shoppers return to the convenience of online purchases. To mitigate this, physical retailers need to invest in creating a personalised experience for customers, he added.

The key to sustaining high street footfall is to know your consumer, so retailers need to invest in collecting and understanding consumer data, aligned to business ambitions, through effective engagement via digital marketing channels.

“Retailers must also make the effort to engage with their customers, to create a truly personalised shopping experience that will drive sales and garner loyalty. Innovative, next-gen digital campaigns that connect with the target audience,” Jangam said.

Strategies such as loyalty programmes offering vouchers for coffee, fast food and restaurants, coupled with online mall experiences supported by centre operators, will improve retailers’ understanding of their customer base, their needs, and wants. ”From this, high street retailers can create an experience that is valuable enough to pull consumers back to their store, time and again.”

Elliott Jacobs, director of digital marketing EMEA at LiveArea believes a fall in the proportion of online shopping was always going to happen in anticipation of the high street reopening, but the reality is online spending still remains far higher than pre-lockdown levels for a reason.

”The pandemic forced a change in mindset for retailers where digital is now the priority – the right model moving forward, irrespective of the business, will be to have a strong website supported by select stores in defined regions.”  

“Retailers have had to reinvent themselves over the past year, with many learning the hard way that a reliance on bricks-and-mortar is no longer viable in the long-term. Digital will play a crucial role in the future high street, and those who fail to learn from the lessons of the pandemic will be unlikely to survive in the new landscape.”