Retail unlocked: how shopping is changing
From bricks-and-mortar businesses to click and collect – as further lockdown restrictions are lifted, what is in store for retail? New Barclays research suggests that spend has increased as customers have made their way back to the high street, but that retailers will need to stay agile to adapt to new consumer expectations. Karen Johnson, Head of Retail and Wholesale at Barclays Corporate Banking, highlights the key trends that are transforming the sector.
Consumer confidence is on the up and shoppers continue to return to the high street after the latest stage of the UK’s reopening, according to new Barclays research. In good news for the retail sector, 68% of consumers say they feel safe shopping in store since non-essential retail reopened, with 41% saying it’s still their favourite way to shop.
Sixteen months of disruption to the sector has seen retailers adapt their business models to survive and thrive, responding to changes in consumer buying behaviour driven by their experiences of online shopping.
Britain’s shoppers, who feel safe about returning to the nation’s high streets, have released pent-up demand for the physical retail experience.
Head of Retail and Wholesale. Barclays Corporate Banking
“Britain’s shoppers, who feel safe about returning to the nation’s high streets, have released pent-up demand for the physical retail experience,” says Karen Johnson, Head of Retail and Wholesale at Barclays Corporate Banking. She adds: “Increases in footfall have translated into sales growth and fostered a new confidence among retailers.”
The Retail unlocked: Strategies for a new future report, published by Barclays Corporate Banking, shows that 29% of retailers are offering new in-store experiences. And to accommodate a UK consumer market that is increasingly looking closer to home, the report sees the potential demand for nearly 17,000 new high street premises in the next year, as retailers review their location strategies.
Total retail spend has grown by 27.8% between May 2019 and May 2021, and Johnson says changes in habits created by the pandemic will last. “The retail winners will be those who can keep up with ever-evolving consumer behaviours”, she says, concluding that: “The store as we knew it must transform to meet the preferences and demands of today’s consumer.”
Johnson adds that the bank’s findings indicate that: “The contemporary customer expects retailers to serve their needs: for speed, convenience – and increasingly among younger demographics, for a sustainable ethos. The ability to deliver on these expectations with minimal friction – often by leveraging data and technology – will be pivotal in deciding who will win, and retain, customers in future”.
Nick Jones, CEO of British clothing retailer Joules, says footfall is down but conversion to sales is up. “Rather than just browsing,” he says, “customers are in a committed, purchasing mindset.” During lockdown, Jones says Joules benefited from having multiple routes to market.
The physical is still of value, but we see its role evolving to support the growth we’ll generate through digital.
A focus on building customer relationships has seen the active customer base of the company – which Barclays supported with financing tied to environmental, social and governance (ESG) and to sustainability measures – grow from 500,000 pre-pandemic to 1.3 million. On reopening, Jones says: “The physical is still of value, but we see its role evolving to support the growth we’ll generate through digital.”
Delivery and click-and-collect services are here to stay, according to the report, and Johnson adds that the winners in the retail market will need to “leverage the opportunities, and unlock the value presented by rapidly evolving consumer behaviours – both today and into the future”.