GlobalData research aims to bust online destruction myth
New research from GlobalData looks to correct “some of the myths and misinformation about how retail is changing”.
In a series of tweets, Neil Saunders, MD at GlobalData Retail, listed ten research highlights, including the fact that online sales rose sharply during the coronavirus pandemic.
The channel, however, did not dominate. Most sales during the peak of the coronavirus lockdown were still made at those physical stores that remained open.
The penetration rate for online is also coming down as consumers resume physical shopping. “Sure, penetration will remain elevated compared to 2019 but the peaks seen during lockdown were exceptional, not a new normal,” Saunders said.
The highest growth rates over the past few months have come from multi-channel retailers, not from pureplays. In the US, many traditional retailers have been very innovative in using their stores to offer the likes of curbside pickup. This is also a key takeaway from recent IMRG/Capgemini research.
“A lot of consumers really like these new services. In the US, almost 68% of consumers say they will use curbside collection more even when the pandemic has subsided. These ‘temporary’ solutions will become permanent,” Saunders commented.
“What this means is that the role of the physical store is actually being strengthened. In the US, we project that, this year, around 35.7% of non-food sales transacted online will be supported by a physical store. This is more than in 2019,” he added.
Ultimately, the idea of channels, as far as the customer is concerned, is a redundant concept. People shop seamlessly across online and physical, using both to meet their needs.
The fact that retail is more seamless than ever presents traditional players with an enormous opportunity. Those that are using their physical assets to create strong multi-channel offers are securing significant growth.
“This should end the lie that ‘online destroyed…”. Online isn’t destroying physical retail and it never has. Most retail casualties during the pandemic (and outside of it) are because of a failure to offer consumers what they want – i.e. not getting the basics right!” Saunders stated.
He concluded: “Mone of this means that the pandemic and online are not causing disruption. They are! And retailers need to adapt to this, including by optimising store fleets. But narratives that this is a battle between online and stores are very wide of the mark. It's way more nuanced.”
