This year has shown how much consumer-facing businesses can accomplish in the face of adversity.
We’ve seen organisations rapidly roll out new products or services, introduce new technologies and make huge changes to their business in response to the disruption brought by COVID-19. Some embraced significant reinvention, while others struggled to adapt and found themselves under greater pressure.
To succeed in 2021, organisations should target sustainable growth by transforming and aligning strategy, purpose and insight, experience, operations, incentives and behaviours, underpinned by the right technologies.
1. Massive channel shift caused by the pandemic
It’s little surprise that the pandemic drove a significant channel shift, but even some of the most mature and strongest businesses struggled with both the speed of the change and its impact on channel economics.
As consumers embraced online, we saw explosive growth. It took just seven weeks for online penetration to increase from 20% to 30%. While this dropped slightly as non-essential stores re-opened, we expect online to continue to dominate.
We also saw mobile shopping adoption accelerate. Our Global Consumer Insights Survey 2020 shows a 43% increase in consumers shopping on their mobiles since the outbreak began, with 93% telling us they intend to continue this habit post-pandemic.
2. Changes in consumer behaviour accelerated by the pandemic
How consumers learn about, interact with and buy from brands has changed. ‘Digital-first’ consumers are driving growth in online buying, whether directly from companies or through ecommerce marketplaces. Where Next for Retail? explores how some consumer trends have simply been accelerated, while forced experimentation has led to other, new behaviours sticking.
When choosing products, consumers have become increasingly mindful of sustainability, health and wellness, and ethical considerations. That might mean looking to buy local or shifting to a goals-based approach, ranging from healthier living and ethical consumerism to greater convenience and stricter budgeting. Some are opting for smaller, newer brands that they consider more authentic and innovative.
For CPG companies, retailers and trade partners have also changed. We’ve seen discounters take share from established players and physical retail channels consolidating, resulting in increasing trade margin pressures and a need to justify listings to retail partners.
3. Stores remain important, but how we use them has changed
We’ve also seen that there remains a role - and demand - for physical stores, more likely as part of an omnichannel offering.
From the start of the pandemic, stores changed to meet consumers’ immediate needs, improving safety measures, bringing the store to the home, and offering alternative services. We even saw a drop in non-grocery online penetration as non-essential stores reopened following the first lockdown, as people looked to physical locations for experience and inspiration.
Elsewhere, Click & Collect was used as an important offering for certain logistics, consumers and non-essential retailers. Legally permitted during the second lockdown, it was a vital tool for some, allowing them to trade through enforced closures.
However, stores only accounted for around 30% of present shopping over Christmas 2020, a historical low. With pureplay retailers seeing huge growth throughout the Golden Quarter, retailers may need to rethink how they repurpose their store estate as part of any future growth strategy.