Analysis: Which Covid trends are here to stay?

The retail sector has learnt many lessons over the past eight months of the pandemic and adapted incredibly swiftly to shifts in consumer behaviour driven by the virus. 

The million dollar question is: which of these changes are here to stay? Retail Week speaks to trends forecasters and future gazers to find out the answer.

The WFH revolution

Perhaps one of the most pronounced shifts in the day-to-day life of consumers since the pandemic struck has been the shift towards working from home. 

While the move towards home working has been slowly increasing over the past decade or so due to the growth in technology, the national lockdown in March saw the number of homeworkers rocket overnight as offices closed and entire workforces were forced to work remotely.

This giant WFH experiment has been successful and many workers – and employers – plan for this to continue. Both Twitter and Microsoft have told employees they can work from home permanently if they want to.

Research from the Chartered Institute of Personnel and Development (CIPD) finds that 37% of office workers say they will continue to work from home in at least some capacity once the coronavirus crisis is over, compared with just 18% of workers pre-pandemic. 

Meanwhile, the survey shows employers expect 22% of staff to work from home all the time after the pandemic, compared with just 9% before lockdown measures were imposed.

Trend-forecasting firm Next Big Thing founder Will Higham believes the move to home working ties into a wider shift in consumers psyche focusing on what’s important in their lives. He calls this phenomenon “The three S’s: safety, serenity and solidarity”.

“Before the pandemic we were already seeing people reassess. Asking themselves what really matters. That’s led to a sharp increase in sales of things like healthy food and fitness equipment, home and DIY stuff and gardening equipment. That focus on the self isn’t going to go away, even when the pandemic does.”

Localism, localism, localism

Directly connected to the rise in working from home is the growth in consumers shopping locally. 

A lack of commuters and tourists have seen footfall plummet in areas like London’s West End. In August, New West End Company said that since the end of lockdown visitor numbers had been 50% lower than last year’s figures.

With fewer commuters heading into city centres, many once struggling regional and suburban high streets have seen shoppers return in their droves. 

Mintel senior trends consultant Richard Cope says ongoing working from home will lead to a long-term shift in customer spending from city centres to more local high streets. 

“It’s going to transfer spending and distribute it more evenly. Local convenience stores will get more local spend. You might get reduced spend overall, but it’s going to mean people will want to spend more in their local community.”

Cope believes local convenience stores such as the Co-op, Nisa and Costcutter, which have experienced soaring sales since the pandemic hit, have successfully tapped into consumers’ growing sense of community. 

He believes that retailers should look to “incentivise consumers to shop for their neighbours”.

“Some of the nicer, local retail stories we’ve been hearing are about people shopping for elderly neighbours isolating. That will leave a lasting legacy,” Cope says.

“Some of the nicer, local retail stories we’ve been hearing are about people shopping for elderly neighbours isolating. That will leave a lasting legacy”

Richard Cope, Mintel

“The UK already, pre-pandemic, had an issue with an ageing population. As long as the virus persists in the community, even if it’s bought more under control, there’s going to be an element of society who just don’t want to go out shopping.”

Expect to see new brands make their way to more suburban areas to capitalise on this growing local demand.

Future Laboratory futures analyst Victoria Buchanan says that pop-up landlord firms such as Appear Here have been working with large retail brands to launch temporary spaces in such locations, which she says will garner longer-term rental demand.

“Rather than looking at Piccadilly Circus or Oxford Street, now brands are looking at Broadway Market in Hackney or Hampstead High Street,” she says. “That’s down to proximity because, obviously, people don’t want to travel. But it’s also because people want to support local, independent businesses.”

Online omnipotence 

It may have become something of a cliche in the months since the pandemic, but Buchanan believes that ecommerce really has seen “five years’ worth of growth in five months”. 

But is this just a flash in the pan and will consumers simply revert back to stores when the virus subsides?

Buchanan believes not. Her reasoning is that so many shoppers have been converted to online, particularly older ones who have begun using it for the first time during the pandemic. 

“It’s captured lots of people who hadn’t previously been shopping in that way before. That older demographic are getting used to shopping that way,” she says. 

Over the past few weeks diverse retail businesses such as fashion giant Zara, footwear colossus Nike and department store John Lewis have all predicted that online sales will account for more than half of their revenues within the next two to five years. 

Grocers too have been betting big on the increase in online being here to stay. Tesco, for example, has invested millions into more than doubling its online delivery capacity since March and new chief executive Ken Murphy recently described its plans to build 25 new online grocery fulfilment centres by 2022 as a potential “game-changer” for the future of the business. 

Last month, one in five households ordered groceries online as digital made up 12.5% of overall grocery sales, compared with 7% in 2019. Meanwhile, last month’s BRC-KPMG Retail Sales Monitor showed online penetration had jumped to 40% in September.

A world-class ecommerce arm is now a must-have for retailers, whatever their size.

“The role and purpose of flagship stores is changing and they are becoming more like fulfilment channels”

Victoria Buchanan, Future Laboratory

Buchanan points to platforms like Shopify that can help smaller brands handle everything “from setting up a website, to processing payments and tracking orders” and says “in many ways, it’s never been easier for a small business to sell online”. 

She believes retailers should repurpose flagship city centre stores to fit into this more ecommerce-focused future and points to fashion brand Off-White, which recently unveiled a new hybrid store in Miami. The shop can either operate as a showroom and store when the virus is waning or be turned into a dark fulfilment centre if cases are on the rise. 

“The role and purpose of flagship stores is changing and they are becoming more like fulfilment channels. You’re seeing brands talking about their stores as logistics hubs, as fulfilment warehouses.”

Virtual shopping

When the pandemic struck in March, communication apps such as Zoom and Microsoft Teams went from niche office communication tools to vital methods to keep businesses and families in touch.

Buchanan says that smart retailers will be looking to leverage the ubiquity of these kinds of services now as sales channels. 

Dixons Carphone and John Lewis were fast movers and unveiled virtual shopping services early in the pandemic.

In the US, higher-end fashion such as Emiliano Zegna and homewares brands such as The Shade Store have also embraced the trend.

“Places like Zoom are actually becoming a new customer opportunity. If people can’t be in your stores, how can they still be at home communicating with your staff?” says Buchanan.

She adds that technology is becoming an increasingly important part of socially distanced in-store experiences, particularly overseas. 

She points to the new ‘social media’ Burberry store, which opened in Shenzhen, China, in August through a partnership with Tencent. 

The store is fully integrated with WeChat, which acts as a digital companion for shoppers, allowing them to engage with in-store items, learn about new products and content, and even share their own content.

“That idea of bringing customers into a physical retail environment and still being able to create that experience with reduced physical contact is an interesting one,” says Buchanan. 

Protecting staff

Another hard-learned lesson from early in the pandemic is the damaging effect virus outbreaks can have on supply chains.

At the beginning of lockdown multichannel retailers such as Next were forced to close down their online operations to prevent outbreaks at distribution centres and warehouses, and make them Covid-safe.

In May, etail giant Amazon founder Jeff Bezos spoke about investing $4bn (£3.07bn) into creating the world’s first “vaccinated supply chain”.

Investing in protecting supply chains will be vital in the months and years ahead, says Higham, who highlights that this also taps into growing consumer demand for retailers to treat staff well.

“Ethics continues to be of growing importance to consumers. Some data we put together recently found that consumers want to know what measures brands are taking to protect their staff. Some 37% of people said that was the most important thing to them and 21% wanted to know what steps were being taken to protect them,” he says.  

Higham says that a “sense of collective struggle still exists among some consumers” and how brands have treated their employees during the pandemic will play a role in future buying decisions.

While the outlook is uncertain, all the experts agree that coronavirus hasn’t created new behaviours and trends out of thin air, but reinforced and vastly accelerated a number of existing behaviours. 

And while trends such as online growth, city centre decline and virtual shopping may suggest a gloomy outlook for some bricks-and-mortar retailers, Cope believes there is still a need for stores in the future.

“We’re never going to be happy just working at home and having everything delivered to us. Experience is still going to be key and those outside the home are going to be important,” he says.  

“Retailers can still provide experiential things when they are allowed to do that, that’s not going to go away. The need for human interaction won’t ever go away.”