As more 2020 FY results come in it is becoming clearer just how impactful the global pandemic has been on store retail and just what it has done for online and mobile.
Inditex – the largest fashion retail group in the world – and Adidas both saw their many stores all around the world shuttered on and off for much of the year and it has hit sales hard. Inditex saw profits slide by a mammoth 70%, while Adidas managed, thanks to a late surge in sales in China, to bottom out at a 14% drop in sales compared to 2019.
On the flip-side, both Inditex and Adidas saw online sales grow dramatically in 2020, offsetting to some degree the collapse in store sales, but despite being in the region of 70% up on the year, it wasn’t enough to stop total takings tumble.
John Lewis too has seen online grow around 73% across the full year, offsetting its loss. It has also seen growth in how its shoppers use sister outlet Waitrose. Together, online and food stores are set to form the backbone of an extensive revamp in 2021.
All these huge retailers are confident that 2020 was a blip and that sales will bounce-back across the next couple of years, they both recognise that technology and a shift to online and mobile are going to be key to this recovery.
Research out this week from Forrester shows that more than half of online sales in 2020 took place on a smartphone or tablet, accounting for €123bn in revenue.
According to the study, online buyers are increasingly shifting from only researching on mobiles and tablets to purchasing on these devices, especially smartphones. In 2019 there were more than 125 million smartphone buyers and 59.4 million tablet buyers in France, Germany, Italy, Spain, and the UK combined.
Around 60% of online adults in Europe-5 use a computer for researching products online, followed by 54% who use smartphones. This gap is continuously shrinking with the increasing screen size of smartphones, the investments by retailers on mobile apps, and users’ comfort in purchasing high-frequency categories like fashion and grocery on mobile devices.
This shift to mobile is starting to move from novelty for many retailers to hard reality. The use of a new app to virtually hide Easter Eggs anywhere in the world may be a nice diversion as we await the Spring sunshine and a dose of vaccine, but it proves an important point: everything, even Easter Egg hunts are now mobile-first.
Understanding and embracing this trend is going to be a vital tactic for retailers in 2021. It will be how shoppers research and buy, but it will also drive how they start to tentatively interact with shops again.
It is also changing how people pay for things – both online and in-store. The shift to shopping online and on mobile has seen mobile wallet use take off. It has also been key to driving up use of buy now, pay later (BNPL) payment tools. While there has been an attempted backlash against these payment spreading tools, consumers seem to love them.
According to a study independent economic consultancy Capital Economics, more than 10 million people – one fifth of the UK’s adult population – used a BNPL option to purchase goods online in 2020, with the payment method accounting for nearly 4% of all retail sales made online in 2020.
Shoppers like it as it is cheaper than credit cards, is easier to use and understand and fits well with the growing trend of storing debit card details in payment apps on mobile.
Like many of the retail trends that have emerged over lockdown, this mobile and payment shift is going to play out into stores when they re-open and retailers need to be ready.