#NEXT2022: Should you rethink your post-Covid strategies?

by Kirsty Bisset. The Covid pandemic and governments’ responses to curtailing its spread were the catalysts for much change in 2020 and 2021. And we’ve all accepted that our personal lives and our work lives are now categorised as pre- and post-COVID, with the majority of those changes now part of ‘the new normal’. But, what changes informed our post-Covid retail strategies? Are they still as valid heading into 2022 as they were at the beginning of 2021?

You may think you’ve seen this article before, and the truth is that there are a lot of them out there. But what better time to rethink your post-COVID strategies than in a new year. And, when you do so, please consider my two ‘here-to-stay’ phenomenon.

The at-home economy

For me, one of the developments that has, and will continue, to impact how retailers do business, is the establishment and growth of the ‘at-home’ economy. Despite the loosening of restrictions globally, the ‘at home’ economy that reared its head during lockdowns is still flourishing. Fewer people may be now working from home than there were a year ago, but there’s plenty who discovered they enjoy the absence of a commute and have continued to work from a home office at least a couple of days a week.

According to influencermarketing.com, consumers have consequently shifted their spending priorities into areas such as home cooking, online shopping, and consuming digital products. Additionally, in his presentation headed, Resetting expectations for consumers and commerce, delivered at Zenith’s Global Water Drinks Congress during October this year, Kantar’s Andrew Walker, said Covid lockdowns worldwide had caused people to shop differently and develop new ‘consumption moments’. He said that, while lockdowns have largely been lifted for a while in many countries, these new behaviours have settled but at new levels. For example, time spent at home is still inflated by at least 5%.

According to his data for the UK, weekly consumption occasions for food and drinks increased from 19.9 (MAT Q1 for 2019) to 22.5 (MAT Q1 for 2021 of 22.5). The impact of these behaviours has simplified the choices that UK shoppers make when it comes to the five ways they buy their food and drink, Walker said, these being defined as large grocery shops (>20 items), small grocery shops (up to 20 items), retail on the go, visit a café or restaurant, and takeaway/delivery.

As a result of this simplification, people are spending less, as GB year-on-year spend on food and non-alcoholic drinks data from FMCG and OOH purchase panels shows. Pre-pandemic spend (52 weeks to 23 Feb 2020), equated to £137billon versus post-pandemic spend (52 weeks to 2021) of £128 billion. That’s a considerable loss.

The losing segments were small grocery shops (lost £3), retail on the go (down by £4), and visit a café or restaurant (down £24). Large grocery shops increased their share of spend by £15 and takeaway/delivery by £6 per household. Have you seen similar trends in South Africa and – depending on your retail segment – how will you respond in 2022?

Virtual marketplaces

Enabling the growth in the at-home economy – obviously – is the rapid adoption of virtual marketplaces. In 2002, Amazon reported revenue of $3.93 billion, an impressive figure in itself, but a drop in the ocean in the total $2.3 trillion retail market. This year Amazon’s revenue should pass the $50 billion mark. In fact, total online retail accounts for around 10% of the US market. The UK has the highest proportion of online spending in the world, with web purchases accounting for an estimated 13.2% of all retail sales in 2012 (according to the Centre for Retail Research).

Although emerging markets have further to go, the rate of growth is even more rapid. Last year China reported that online business-to-consumer transactions increased by 53.7% to reach $123.2 billion. We know that ecommerce received a huge boost during lockdowns in South Africa, too. But you now have to watch out for the adoption of new digital shopping behaviours, and begin thinking now how you will respond to these. Livestream shopping and social ecommerce have become widely popular, especially among younger generations.

Take outs for retailers

Safety is still top-of-mind, and that means contactless payment and concerns about returns and sanitation. You may have to rethink your returns policy and – if you are a bricks-and-mortar store, find a way to get rid of the cling film version of ‘enter your pin’. Staying with bricks-and-mortar, if you’re a retailer with a national footprint – one size fits all models need to be more personalised depending on geographical location, shopper frame of mind, space, and demographics of the area.

And, leading on to that, if you are offering multichannel or omnichannel shopping events, the real-life and digital must feel ‘linked’, so that the customer has a consistent experience with your brand.

Supply chain transparency

Finally, just a heads-up about a trend that I think could join my two ‘here-to-stay’ phenomenon, and that’s supply chain transparency. This is becoming more important to consumers as they gravitate towards brands and stores that source ethically and prioritise environmental impact. According to Capgemini, 79% of consumers are re-evaluating their consumption based on social responsibility and environmental impact. Hence, as we gradually transition out of the pandemic, the emphasis on shopping local is likely to stay. The circular economy will become a must-have. The same Andrew Walker referenced above, in the same presentation, said that numerous product categories will be at risk in the future if they cannot recruit ‘Eco-Actives’.

Eco-Actives are shoppers who are highly concerned about the environment and are making the most of actions to reduce their waste. They feel an intrinsic responsibility to be more sustainable, follow the topic more actively and have a greater awareness. ‘Eco-Considerers’ are worried about the environment and plastic waste, at similar levels to Eco-Actives. But they are closer to ‘Eco-Dismissers’ in how they act, not making many actions to reduce their waste. Their biggest barriers are convenience and price.

Eco-Dismissers are shoppers who have little or no interest in the environment and make no steps to reduce waste. The topic rarely features amongst friends and family and they are lacking awareness of environmental concerns. They do not think they make a difference. Referring to global research, Walker said plastic waste is close to the top of the agenda of many people, and they are taking more actions to reduce their plastic waste.

More importantly, Kantar predicts Eco-Actives will account for half the population by 2029, and that brands and categories that currently underperform with Eco-Actives face a big loss as the population shifts. Winning favour with sustainable shoppers takes time – act now to benefit in years to come, was his advice.

Main image credit: Photo by SHVETS production from Pexels.

Kirsty Bisset is Managing Director of HaveYouHeard Durban.

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