Ecommerce is definitely off-setting lost store sales for retailers that have an omni-channel approach, with shoppers often spending more online – but only once they find the retailers they are used to shopping with.
Transaction data from around the world collated by the Centre for Economic and Business Research (CEBR) on behalf of payment company Adyen, finds that half of retailers adopting a unified commerce or omnichannel approach saw their total number of transactions remain consistent during the pandemic – meaning that the reduction in sales volumes from stores was offset by online channels.
The data also shows that shoppers who only ever purchased from a retailer in-store prior to the pandemic spent, on average, 40% more when they shifted online to make purchases during the pandemic.
However, many retailers are not tapping into this. CEBR’s research found that the proportion of retailers selling online via their own website or app averaged just 27% across Europe – but by increasing this proportion even slightly there could be a significant positive economic impact.
CEBR used the United Nations’ UNCTAD index to assess European countries’ unified commerce readiness. When controlling for the stringency of country lockdowns, it found that a five point increase on the UNCTAD index was associated with 2.6% better retail sector performance during the pandemic. This equates to a £22.2 billion improvement in the UK’s turnover.
Not dead yet
However, while online channels were a lifeline to retailers during the pandemic, physical stores are far from dead. Consumer research conducted by Opinium as part of Adyen’s study shows that half of UK shoppers still prefer shopping in physical stores, while just under half (48%) are looking forward to shopping in stores for pleasure following the pandemic.
Retailer MUJI is a clear example of this. According to CJ Weerasinghe, Head of Finance and IT at MUJI Europe: “When the lockdown started, MUJI closed its online stores temporarily to ensure warehouse workers’ safety. Once they reopened, sales surged to Christmas volumes. We’re now delighted to welcome shoppers back into our stores and have implemented measures to ensure they feel safe. But we recognise that many customers will still prefer to shop online. So our focus now is to ensure that the MUJI experience is available to our customers, wherever they are.”
Roelant Prins, Chief Commercial Officer at Adyen comments: “Consumers today don’t want to be boxed; they want to shop in a way that works for them – and this might change depending on where they are, how they feel or many other factors. Those retailers prepared to cater to today’s consumers were the ones that won out through the first wave of the pandemic. They were the ones agile enough to cope with the constantly changing environment, and with the infrastructure in place to continue meeting consumer demands throughout this period.”