While online shopping continues to increase – not just as a reaction to the temporary closing of many physical shops during the COVID-19 lockdowns, but also organically as the technology develops – there will always be an appetite for brick and mortar storefronts as people seek connection.
The pandemic saw an unprecedented increase in the number of retailers migrating, to some extent, to online trading to not only stay viable, but in many cases, to thrive.
The Australian Retail Outlook 2021 report, co-produced by KPMG and Inside Retail, found that despite the pandemic of 2020, many retailers actually experienced strong trade with 18.96% of respondents to their survey describing it as their best year of trading on record.
“Despite the rocky year, survey respondents indicated that 2020 was actually quite positive for their trade, with almost a third (31.28%) describing conditions as ‘good’,” the report states. “For some retailers that already had a strong online presence, last year actually saw sales skyrocket through the roof.”
Just 14.69% of respondents described 2020 trading as “poor” and 16.11% saying it was the worst they had experienced.
Those who thrived were retailers who were able to pivot to online or build there existing online presence.
“E-commerce stole the spotlight from physical retail this year , as consumers were forced to turn to online shopping in many cases,” the Australian Retail Outlook report reveals. “Physical retail took a backseat last year, as some businesses struggled to manage their rent and others considered the changing CBD retail landscape.
“This year, many retailers turned their focus to their online operations and unsurprisingly, may reaped the benefits,” “Almost half of respondents found that their e-commerce revenue significantly increased (42.18%). Interestingly, 21.8% of survey participants did not have an e-commerce channel.
“While there has been a big shift to online retail in recent years, interestingly, the majority of respondents claimed that e-commerce actually only makes up less than 5 per cent of their sales.
“Last year, savvy retailers worked on their omnichannel strategies to help customers, however they wish to shop. It will be interesting to see this year what successful physical retail looks like.”
Undoubtedly shoppers will now expect their favourite retailers to have an online presence and will take advantage of this when they are time-poor.
But with people now working more and more from home and as such, not engaging in socialising at work, there is a growing appetite for connection within the community and this, I believe, will see people increasingly gravitate to local shopping centres as community centres.
Covid showed us what it was like to be distanced from our social, family and community circles as we were physically restricted from being able to see each other.
Instead, we became much better acquainted with the staff at the local shops, found out there was a local butcher and discovered the names of those who own the fruit and veg shop.
Local community and local connections became more meaningful than they have for many, for a very long time.
Yes, we like being able to log on and look at shoes at midnight or dream of a holiday to Vanuatu on a lazy Sunday morning, but we also like to experience connection and engagement with other people.
Shopping centres would be well served to not only understand this, but also to actively build their strategies around the concept of the need for connection while they continue to grow their online presence.