Last year was devastating on a human level and for industry across the globe. As the pandemic carries on wreaking havoc throughout the planet, people struggle to return to some sense of normality.
Just as other non-essential businesses endured compulsory closures, the retail industry was also hit hard. Many staff members lost their jobs, long-standing businesses such as JC Penney filed for bankruptcy protection. The news kept getting worse. Coresight Research predicted that the US would lose around 25,000 retail stores during 2020.
There were some bright spots for retail in the ecommerce sector but how will shopping malls and high streets bounce back? Is there a future for physical retail units, or are there wholesale changes to come?
Shoppers are changing their habits
During 2020, millions of people found themselves spending far more time indoors than they had before. As they started to adjust to new routines and a different lifestyle, the internet became more important than ever before.
Many online resources can help people during the pandemic but it is likely the websites that most people used were linked to the following; entertainment, groceries, food delivery, and retail.
For many, the internet was great for watching movies through Netflix, ordering food through Food Panda or UberEats, and some retail therapy courtesy of Amazon.
Ecommerce was already growing year on year, and 2020 was given a substantial boost by the lockdown. US merchants received over $860 billion last year through digital sales.
What does this mean for the high street in the future?
Experts are predicting that traditional retail will not return to the same level as before. There are several reasons why this could be true.
Firstly, many first-time ecommerce shoppers have discovered the ease of making purchases online. These people along with existing digital buyers made sure that 2020’s figures had a 44% growth rate compared to 2019.
Now that these consumers have seen the convenience of buying online, many won’t return to shopping malls and retail stores as often as before.
Secondly, fear of contamination will scare many people away. More vulnerable people may feel it is safer to avoid crowds and the risk of Covid. How many people think this way will remain to be seen but a survey by First Insight back in April 2020 pointed to only one-third of Americans feeling safe to return to malls once they were reopened.
How might this change?
While there could be a significant drop in shoppers there will also be those who prefer human interaction instead of the internet.
Even hard-core ecommerce consumers will at some point crave human contact. It is part of human nature to seek contact with other people and for many, picking up products and trying them on in shops cannot be replicated online.
Clothing, gadgets, electronics, and other products, often need to be tried or tested in real life. If you were planning on spending $1000 on a laptop, you might well prefer to see this in a store and not just a photo on the internet.
Physical stores can also provide consumers with more information than the internet.
What advantages do physical stores have over the internet?
For the retail industry, senses are important when it comes to consumers. The industry understands the importance of sight, sound, smell, and touch. You can’t smell food on the internet, you can’t touch a silk scarf on the internet either.
Tactile sensations can increase the chances of a sale as long as the store can get the shoppers through the door. One reason that many shoppers will return is that they can find out more about a product in a store than they can online.
Hang tags display information that may not be easily found online. When making a sweater purchase on Amazon, it may list the materials used, the size, and how to wash the garment. But, it might not list all the interesting details that are on a hang tag.
Hang tags and labelling can show information that ecommerce forgets
You might think that you can find almost anything online, which is largely true, but sometimes things are missed off.
Visiting an online retailer, especially an ecosystem such as Alibaba, will give you technical specs, access to reviews, photos, videos, and an item description. As they tend to display this standard info they neglect some details that may be important to you and your values.
Consumers think differently these days. Sustainability, fair trade, living wages for workers, and chemical-free materials, come into consideration for many shoppers. These details are often listed on hang tags but may easily be ignored on an Amazon listing.
What may be shown on a hang tag?
Hang tags aren’t just good forms of advertising in a retail environment, they can also display relevant information to consumers. Companies such as the Dutch Label Shop produce these hang tags for manufacturers to pass on important details to consumers.
Corporate social responsibility
Shoppers are taking more notice of how their purchases impact society and the environment. If a brand has a strong social responsibility charter then this can be explained on a hang tag.
Approved factory conditions
Sedex is an organisation that looks into the conditions of workers and the places they are employed. If a hang tag has Sedex approved on it you can feel assured that your purchase has been made by someone with a living wage, working in safe conditions.
Safe clothing for farmers and consumers
Hang tags can be used to spout the ethical values of a company that won’t be shown in an online description. Seeing information about the lack of chemicals and pesticides used during manufacture can be reassuring. It means you know that farmers are not being put at risk and your clothing is free from allergens.
Will online shopping continue to grow?
Despite the advantages of shopping in a physical store, ecommerce is a juggernaut that won’t be stopping anytime soon. Many people now know how to do shopping with just a few clicks and will see no reason to start being limited by opening hours and local stores.
There are nearly five billion people in the world today accessing the internet. Of those, around 90% use mobile devices at times to do so. When you consider that Google expects websites to be mobile-friendly, and indeed looks for a mobile-first approach, coupled with these user numbers it is easy to see why ecommerce will keep growing.
The ecommerce retail market was worth around $4.2 trillion worldwide in 2020. This figure is predicted to increase by another $2 trillion in just three years. This staggering increase can only mean the end to more high street and shopping mall stores.
Summary
While there will never be an end to physical stores, it is clear that retail’s future is going to be more and more online. The recent past can give some examples of the way retail, in general, is going.
Blockbuster was once hugely popular but then services such as LoveFilm saw a gap in the market. By utilizing the internet, the postal service, and consumer’s desire for convenience, they stole a share of Blockbuster’s market.
A few years later, Netflix came along and took this idea one step further and cut out the postal service. Watching a movie has moved from retail units to the post and then to streaming, cutting out any interaction with a human completely.
When it comes to clothing though, the internet cannot show you the information that a hang tag can, and you can’t see how you look in the mirror in that jacket you want. Well, not yet anyway.
