Insights

What is next for the Retail sector as we enter lockdown 2.0

12 November 2020

The impact of the COVID-19 pandemic has been felt across almost all sectors, but very few have been hit as hard as retail or hospitality, with many organisations forced to deliver services remotely with little pre-warning. With Christmas on the horizon, but a second national lockdown to navigate first, what is the outlook for some of our favourite retailers?

The Golden Quarter

With Black Friday under a month away and Christmas adverts beginning to take over our television screens, we’re now entering what is traditionally a lucrative period for most within the retail and hospitality sectors. This will likely be a make-or-break time for the majority of businesses making up our local high streets. For many, e-commerce has previously been on the periphery of their business and sales strategies. 

Moving forward, digitally engaged consumers will have an entirely different set of expectations from their favourite brands, meaning existing digital channels and operations must be reconsidered to meet the shift in attitude. Retailers should see this as an opportunity to create a truly customer centric experience that embraces the new consumer habits that COVID has prompted, rather than resisting them. Black Friday and other retail events during the Golden Quarter can be used to drive sales, boost revenue, and acquire new customers. But, with up to 90% of shopping activity now online, you need a compelling and engaging campaign to stand out from the crowd. We’ve already seen some good examples of this:

  • Aldi has doubled down on its trial of click and collect services by extending the initiative to an additional 200 UK stores between now and Christmas. The pilot was initially launched in September at just 18 stores throughout the Midlands, but in an attempt to offer “greater flexibility” to their customers it is being rolled out across the country.
  • Marks and Spencer launched its “Book & Shop” online reservation service. Customers are able to book a guaranteed slot to shop via the retailer’s website, helping with social distancing measures and avoiding queues in store.
  • John Lewis and Waitrose have planned over 100 virtual Christmas events and experiences for their customers, including make-up and cookery classes hosted via Zoom, tutorials with fashion and style experts, and a new ‘try before you buy’ Christmas tree feature on the store’s app, to name just a few. 
  • Cosmetics company Lush has introduced a new on-demand delivery service that enables shoppers to buy from 45 of its UK stores for same-day, contactless trackable delivery via last-mile delivery platform Stuart.

Reasons to be optimistic

A recent survey revealed that three quarters of all holiday shoppers intend to take part in at least one of the season’s blockbuster shopping events. It will not come as a surprise to learn that Black Friday is leading the way at 55%, but it is closely followed by the recent Amazon Prime Day (43%), Cyber Monday (39%), pre-Christmas sales (38%), and Singles Day (26%).

Premium lifestyle brand, Joules, saw e-commerce sales grow 35 per cent year-on-year, with online revenue accounting for 70% of the group’s retail sales for the period. There are plenty of other organisations revealing similar figures. In contrast, Primark expect revenue to fall by 24% this year due to the forced closure of its stores in the UK and around the world. With no e-commerce platform to speak of it was unable to shift its focus in the way some of its competitors have.

To illustrate this point, Google Cloud are expecting a significant uptick in revenue this holiday season, with retailers now heavily reliant on their online operations the tech giant is anticipating huge spikes in online traffic. Google, along with other cloud service providers like AWS and Microsoft Azure, provide the framework and infrastructure that the majority of the industry use to host their e-commerce platforms. Moving to the cloud is often the first step many organisations take when looking to optimise and transform their IT systems. For more information this brief is a good place to start.

Look out for part 2 in this series where we’ll be casting a closer eye on some of the specific challenges facing the retail and hospitality sectors as we move into the new year.

cloud strategy
Cloud transformation
ecommerce
retail
retail innovation
Myles Clarke