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At the beginning of the year it was thought that Brexit would be the defining moment of 2020, or perhaps the upcoming US presidential election. And then COVID hit, bringing with it severe global health and economic challenges. The UK soon became the worst affected country in the EU, with the knock-on effects of lockdown and low consumer spending plunging the nation into a deep recession. Retail was one of the industries most impacted by the pandemic, with the forced closure of non-essential stores placing a huge strain on the already struggling British high street.
Despite overall retail sales volumes beginning to bounce back, with the ONS reporting that July’s estimates were 3% above pre-pandemic levels in February 2020, clothing store sales (which were the worst hit during the pandemic) were 25.7% lower in July than February . Some of the UK’s most well-known fashion retailers entered into administration as a result of lockdown: Debenhams, Monsoon, Victoria’s Secret UK, Oasis, Warehouse and TM Lewin.
Analysis from retail intelligence experts Springboard found that August footfall across all UK retail destinations was down 31% year-on-year . This is despite restaurants, cafés and much of the service industry having reopened a month earlier, and the added incentive of the government’s ‘Eat Out to Help Out’ scheme which ran from 3-31 August.
Yet while the outlook for traditional brick-and-mortar retailers seems bleak, with the World Economic Forum predicting that department stores will decline by over 60% this year , it isn’t all doom and gloom for the sector. The same report predicts that e-Commerce will grow by nearly 20% in 2020 , with experts suggesting the shift away from physical stores and the transition to digital services has been accelerated by up to five years as a result of the pandemic . So pronounced was the surge in online shopping earlier this year that Edge Retail Insight, the global trend forecasting firm, predicts an additional £5.3bn will be added to UK e-Commerce sales this year, totalling £78.9bn .
The factors driving the e-Commerce boom
Online sales have been steadily increasing year-on-year in tandem with the proliferation of mobile devices and widespread internet access. Meanwhile the global share of transactions carried out in cash has been steadily falling, according to global management consultancy firm McKinsey .
Even so, no one could have predicted how the events of 2020 would see consumers come to depend on online retailers in the way they do today. Lockdown, and the weeks that subsequently followed, has forced consumers to modify their shopping behaviour. If a favourite store shuttered, or failed to offer delivery, consumers had no choice but to switch allegiance and find an alternative that could help them get the products they needed in the safest way possible.
In fact, new research from Bazaarvoice, a software company that helps brands and retailers connect with consumers online, found that 88% of global consumers are planning to stick with the new brands they discovered during lockdown, rather than return to those they were using before the pandemic . The survey which questioned shoppers in the UK, Australia, Canada, France, Germany, and the US, found that 44% of British respondents only decided to try different brands during the crisis because products offered by the existing brands they favoured became unavailable .
The businesses who could offer the right products while helping to facilitate consumers’ desire to limit unnecessary interactions and isolate at home are some of the pandemic’s biggest success stories – Amazon, Tesco and Ocado to name a few. They were already well-positioned to capitalise on increasing consumer demand for essential goods and home delivery.
While there are undoubtedly smaller success stories up and down the country there have also been countless casualties, with many SMEs unable to adapt their physical premises in line with government social distancing guidelines or pivot their services online fast enough.
How SMEs can use the rise of e-Commerce to their advantage
Almost overnight, how, and where, consumers shop drastically changed, forcing businesses to rethink their strategies and find ways to accelerate digital adoption in order to survive. With all indications suggesting that consumers’ needs have changed for good, SMEs must now embrace e-Commerce and use it to their advantage or risk being left behind by their competitors.
According to Bazaarvoice’s research, 74% of Brits now feel comfortable buying products online as a result of the coronavirus outbreak, however price is only the key purchase driver for 31% of consumers. In addition to price, other considerations such as product availability, the option to self-serve, and overall customer journey are key deciding factors that can influence a consumer’s purchase decisions.
An increased preference for contactless shopping is another factor in the rise of e-Commerce, with recent analysis of consumer behaviour by McKinsey showing that cash withdrawals at ATMs are down by over 50% in many European countries as a result of the pandemic, and at the same time online and contactless payments are on the rise. Therefore it’s imperative SMEs make online delivery as fast and flexible as possible, as well as offering a hassle-free returns process. And if they still have bricks-and-mortar premises, SMEs must offer contactless as the default payment option.
Whether SMEs need to build a custom e-Commerce website from scratch or enhance their existing platform, delivering positive online experiences for consumers needs to be at the centre of everything they do. Not only do SMEs need to have a strong e-Commerce platform that’s easy to navigate on mobile and enables consumers to purchase the items they want quickly, they need to have a good understanding of digital marketing to ensure the right consumers can find their products and services at the right time.
Promoting their business on social media via paid advertising can help SMEs increase awareness of their brand for minimal costs, while PPC can help to drive high volumes of traffic to their website. The latter is a particularly useful tool for SMEs who haven’t yet built up their web presence organically and need to pay to appear in Google search results in order to target consumers who are looking for similar products.
SEO is of huge importance and following the best practice guidelines and staying abreast of Google’s algorithm updates will help SMEs to remain high in search engine rankings naturally. Google and other search engines look for lots of positive signals to show that a website’s relevant and useful so things like positive customer reviews and regularly updating the website with rich content can go a long way.
As a result of the pandemic, consumers are staying closer to home and are increasingly likely to visit local brick-and-mortar stores than go further afield. A July YouGov poll found that 38% of Brits shopped locally for food and drink, due to lockdown restrictions, while 62% had been shopping on their local high street for non-essential goods once restrictions had lifted .
With opening hours varying from store to store, and consumers cautious about venturing out if they can’t guarantee they’ll find what they need, increasingly they’re turning to Google to search for the businesses operating nearby. In order to ensure that these consumers can find them, SMEs need to make sure that their websites are ranking for location search terms.
According to research by Forbes Magazine, 95% of smartphone users have used their device to perform local searches at least once. In order for their business to show up when consumers search using geo qualifiers like city, county, postcode or “near me” as part of the query, SMEs will need to show search engines that they’re geographically relevant by investing time and money in local SEO.
With three months still left of this year there’s a lot that could still happen before Big Ben's famous bongs sound on New Year’s Eve. However nothing’s likely to trump the phenomenal year of growth e-Commerce has had. As much as many retailers would love 2020 to be the year that never was, with everything magically going back to how it was before, it’s imperative that they take action quickly and move their businesses online before it’s too late.
Every business should have access to online marketing that works, and by partnering up with 3-commerce, that’s exactly what you’ll have. Give us a call on 0333 772 9369 to find out how this can work for you.