As Published on LinkedIn | November 24, 2020
As we add more layers and head out with our masks and hand sanitizer, it’s clear that consumers – and retailers – are adjusting to a new normal. Here are some of the long-lasting retail trends that will shape this holiday season and beyond.
1. E-Commerce: Friend, Not a Foe. 2019 ended with e-commerce sales being between 10 – 12% of overall retail sales. It was expected that over the next 5 years, e-commerce sales would grow to about 20% of all retail sales. Looking ahead, e-commerce retail sales are expected to be close to 20% of retail sales in 2021 and up to 25% by 2023.
As retail players report in 2020 earnings, this boost in e-commerce sales comes with a high cost. The necessary infrastructure, including customer acquisition and last-mile delivery, has driven a growing alliance between e-commerce and physical stores delivering one seamless experience for the shopper.
BOPIS is not the newest boy band, it’s Buy Online Pick-Up in Store. BOPIS brings together the online shopping experience and the immediate fulfillment of a consumer need. It also solves the last-mile economics for retailers. Brands are seeing customers select BOPIS option four times more than they were before the pandemic. 70% of consumers having made multiple BOPIS purchases since the outbreak of COVID with growth in excess of 130% in 2020. 90% of traditional retailers will launch a BOPIS option by the end of the year, with grocery being the largest driver in the increase of BOPIS.
2. Consumers Are Sticking Very Close to Home. Prior to COVID, 94% of consumers would travel no more than 17 minutes for everyday purchases. 80% of U.S. disposable income is spent within 20 miles of a person’s home. We have only seen this amplified during COVID, fueling the trend of hyper-localization driven by convenience, safety, and emotional desire to want to support local retail, even if it’s the local store of a national brand.
We continue to see consumers choose to support local businesses. But it’s worth pointing out that it’s a two-fer – the consumer not only supports the local business but protects the culture and richness of the community.
3. Convenience is Queen. The convenience of location is critical to the consumer but so are the parking, store layout, and property logistics. With the BOPIS option becoming so popular, retailers are making key location decisions. If consumers want an item immediately, it’s much faster to order an in-stock item online and have it ready for pick up in an hour than it is to wait two days or longer for delivery (in addition to saving on shipping fees). The convenience of BOPIS stretches only as far as the length of the trip for the customer, which is why our investment strategy around population density, incomes, and spending power inside 3 miles or 17 minutes meets the needs of consumers and retailers alike. But this isn’t all about curbside and pick-up spots, it’s about a sense of place and of community.
4. Essential Needs and Emotional Wants. There Are a Lot of Both. We have seen that over 60% of consumers change their shopping behavior during COVID, with value and essentials as the primary drivers for change. As of July 2020, 71% of Americans believed that COVID would affect their financial health for at least another 4 – 6 months, with many believing well over a year. This shift to value and essentials is expected to have a lasting effect on consumer spending.
Consumers continue, though, to value experience. 73% of consumers point to experience as an important factor in purchasing decisions. 72% of millennials would rather open their wallets based on experiences rather than on material items with no substantial meaning. One in three consumers reported earlier this summer that they shopped in stores for the social experience and the ability to connect with humans.
5. A Closer Sense of Community – A Hunger for Connection. A sense of belonging and social connection can counteract the ongoing pandemic of loneliness, isolation, and depression. 72% of Americans report they are happier when connected to their local community. Yet, prior to COVID, only 31% of Americans know their neighbors.
8 of every 10 of Gen Zrs- who will drive nearly half of all retail spending by the end of 2020 - report feelings of loneliness. Not surprisingly, COVID has caused these feelings to increase by as much as 30%. Loneliness is proven to be worse for our health than smoking a pack of cigarettes a day. Social interaction and human connections are routinely touted as key attributes to the cures.
Our places serve as gathering places for our communities, where neighbors, friends, and families routinely come together. At EDENS, we offer myriad ways to inspire people to engage with one another. This is done through design and “jewelry” as well as art. As of late, we have rolled out Gratitude boxes, community mantras, and QR codes to learn more about art displays. We continue the conversations with our community members, including social media and socially distant events.
Conversation, Uncategorized