Status quo and outlook Corona and the world of retail
The IFH KÖLN (in German) has completed its eighth "Corona Consumer Check", examining consumer behaviour during the pandemic. It showed that 38 percent of survey participants now describe their mood as annoyed, 32 percent as stressed. "Social distancing" is becoming more difficult for consumers.
This bad mood is increasingly reflected in consumer behaviour, with over half of survey respondents purchasing fewer big-ticket items in 2020 than in 2019, and almost 40 percent currently buying less than they did before the new lockdown.
When they do shop, it's generally online during a lockdown. In the past year, online retail in Germany has grown by around 20 percent. Every second consumer bought more online in 2020 than the year before, and this shift towards online shopping instead of planned trips to the shops looks set to continue: 38 percent of survey respondents said they would shop online more in the coming weeks compared to 30 percent in November. This development has been especially profitable for the big platforms, particularly Amazon, but also eBay, Otto and Zalando.
High-street retailers have started offering their customers more digital services like Click and Collect, Social Commerce or ordering with QR codes. Although customers are becoming increasingly aware of these services, they have not quite yet taken off. For example, even though 75 percent of survey respondents had heard of Click and Collect, only 17 percent had actually used the service, and most of the figures for other options were significantly lower.
How sustainable are these changes and developments? Will online growth continue at such a pace even after the pandemic? The study results show that there will be both challenges and opportunities for brick and mortar retail.
Levels of satisfaction with online shopping have been quite high overall, and they have improved during the pandemic. Customers appreciate speed and convenience, which surely means that online trade will continue to grow. However, where online retail falls behind is in creating a strong relationship with customers: only 21 percent of participants said they had one, whereas the figure for local traders was 25 percent.
This shows that high-street shops still stand a chance after the pandemic, especially those that have successfully managed to develop and expand digital channels to their customers. 34 percent of survey respondents said they had supported local businesses more in 2020 than in 2019, and this looks set to continue in the coming year: every second consumer is planning to buy more from local retailers. There was increased interest in local platforms, too.
The problem is that support and empathy for those who are affected by the crisis is not a business model. Local traders need to expand their services and develop customer-centric digital offerings to future-proof their brick and mortar stores. Connecting physical shopping with online offers can bring added value for customers, and that will be a decisive factor in their success, even after the pandemic.
- All the results of the Corona Consumer Check can be found here: https://www.ifhkoeln.de/teilen/corona/ (in German)
- Learn more about IFN KÖLN at https://www.ifhkoeln.de/ (in German)
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