The massive disruption brought by Covid-19 has left a huge mark on customers. The consumers we knew just three months ago are not the same people today.
The usual preferences have shifted as customers exercise caution more than ever before – about where, what, when and how they do their shopping. The impact is already tremendous. We still know comparatively little about the Covid-19 virus and its long-term implications. However, what’s clear is that it has already fundamentally changed the way people shop and behave.
Restrictions and caps on the amount of customers in stores, whether imposed by regulation or voluntary, could have a significant impact on the turnover of retailers. This in turn might make it harder to justify the cost of rent to stay open and could eventually lead to downsizing or closing of locations.
The impact on customers was obvious from the beginning. As the virus first started to circulate, the shift in customer preferences could be clearly noticed. Almost overnight, physical stores were avoided. Customer demand shifted from discretionary items to those perceived as essentials. People started to prioritize health and supply chain safety over cost and convenience.
Within the last few weeks, the pace of digital adoption and rate of digital literacy skyrocketed.
Clearly, every market and every population is different. Some countries have invested heavily into its digital infrastructure over the past few years and, as a result, have largely been able to manage the increase in digital demand. Markets that have fallen behind on these types of investments may struggle to convert consumers from the physical to the digital.
However, few areas of the economy are experiencing bigger levels of shock and upset than retail. And when the virus has finally been quashed and things have returned to a new normal, there are a number of ways in which retail will probably be changed completely and forever. The coming weeks and months, as some, but not all retailers reopen their shutters, it will be all about survival for business owners, big or small.
It’s everyone’s duty to shop local if possible
We must do our bit to support independent retailers as best we can, to ensure their survival for a post-pandemic future. The cafes, bookstores, flower shops, design shops and delis that line our villages and main streets are vital to our communities.
They centre community life, contributing to the close-knit feel of our localities and forging a sense of belonging amongst residents. In isolating times such as these, when our worlds have shrunk to fit within a few kilometre radius, upholding this solidarity and sense of togetherness is more important than ever.
If people have the means, making a concerted effort to spend money locally could save jobs and help ensure that villages and towns across the UK can reopen when the crisis is over.
Digitalisation as a safeguard amid the coronavirus crisis
However, for those businesses that have been online, or are in the process of digitising their offer, the online world is providing a safe haven amid the coronavirus crisis. Small businesses have taken to Twitter, Instagram and other social media sites to remind customers that despite their brick and mortar shops being closed, their online stores are still open.
Restaurants and coffee shops have been very quick to find a way from table service to takeaway. Coffee shops which are closed, have focused i.e. on the sale and delivery of coffee beans to customers, while many restaurants have also stepped up deliveries.
Instagram remains one of the best platforms to have that virtual retail experience as retailers want to be able to talk to customers as if they were coming into the shop.
However, this being said, the world needs to be open to digitalisation too, with the complexity that people will have less money to spend. People’s consumer habits have changed, so has the world. With shop fronts more or less still shuttered across the country, many small businesses have been looking at their options online. It’s not a route every business can take.
Advice for local shops – making the leap to online and niche
Once people have got used to a new habit like online shopping, it is difficult to change their habits. In order for small local shops to compete with ecommerce shops selling their items online, small business owners are advised to offer personalised service and niche products. Personalisation and niche will be the future. Being a niche player will give a local shop the opportunity to become a specialist retailer.
The new ecommerce winners
Household goods, clothes and electrical appliances. At present, these are the three main categories of online retailing. There is a lot happening in these markets in terms of overall number of online stores selling popular products, and the number of related searches and search results.
Imagine you were the only retailer, or one of a small few selling an unusual, niche product. As incredible as it may seem, a large number of the most successful online stores offer products you didn’t even know existed.
The reason for the success of sideline products is simple: whenever many search results are spread out over several suppliers, each of these suppliers will receive only a small piece of the cake. However, if just a few searches a month are redirected to one, or just a few retailers, the cash registers start ringing.
Less competition, higher profit margins
One major aspect about niche markets is the lack of competitive pressure. Besides ruining a retailer’s profit margin, therefore affecting their prices, competitive pressure usually also means having to spend a lot of money on advertising, so that customers can find them easily online. The battle for the leading position in search engines results can be an expensive one. However, if someone is selling online niche products such as fishing rods or cameras, they don’t have this problem. Your store will appear on page one in search engines.
Retailers who have built up a high market share within a niche market, often benefit from great profit margins. Other benefits include: little competition, no price wars, and low advertising costs.
Cross-selling in the ecommerce niche
Niche products rarely come on their own. They’re often accompanied by specialized accessories, which opens up opportunities for cross-selling accessories, resulting in higher profits.
An online store targeting niche markets also allows a retailer to produce much more tailored, high-quality content; use the blog feature of your ecommerce platform to write about their products and industry.
Stand out from the crowd
Nowadays, you can nearly find anything on big ecommerce platforms. However, as most people searching for a certain product do not know the exact serial number or unique product name, it is hardly possible to find the exact product you need on well known ecommerce platforms which don’t have the possibility of presenting every version of each product, along with a description for each.
However on the other hand, your product pages offer you the opportunity to set up URLs in such a way that they contain the name of the product itself. This has a very positive impact on your ranking in search engine results.
Another benefit that online shoppers value when looking for niche products: a specialized online store displaying professional knowledge and expert support is more persuasive.
Therefore, always make sure to show your expertise by offering your customers what other platforms cannot offer: downloadable product images, telephone (or Live Chat) customer service allowing customers to speak with experts and informative blog posts and product descriptions will help you stand out from the crowd. Ultimately, people enjoy buying from real people.
Learning the online ropes
Last but not least, for those businesses hoping to make a longer term investment in their online presence, there are a number of online training options aimed at getting their business from the main street into the virtual trading space.
The prospects of trading online can be daunting for businesses who haven’t conducted commerce in the online domain before. Future seminars will look at topics such as marketing your product effectively on mobile, hosting a virtual event and using different channels to communicate with a diverse range of customers.
Rory OConnor is chief executive and founder of Scurri