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How has retail changed since the beginning of 2020?

April 15, 2021

It’s no secret that things have changed since the onset of the global pandemic. Many of us were strangers to wearing masks and I know that we weren’t all standing 1.5 meters apart before! But Covid’s impact has stretched far further than just small behavioural changes. An industry that has experienced rather interesting changes is the retail industry. Some of the changes I think we could have all predicted (did someone say; online shopping?), but some changes are actually quite surprising. That’s why today, we’re delving into the changing world of retail!


Online retailing rose to new heights!

Okay, so this one might be a bit obvious but it’s still important! After all, Australian online sales rose to 79.6% of all sales in the height of Victoria’s major lockdown. I’m sure that everyone reading this has been guilty of making a couple of lockdown purchases online. Just the excitement of the package arriving is enough for me to want to make another purchase right now! 


Despite this being the most well predicted retail trend, there are many things that weren’t exactly expected about the lockdown-spend trend. The sheer volume of online sales is one, but the great impact that the number of online sales would have on our few delivery services was something none of us could have expected. With Australia Post being the biggest player in the postal services industry in Australia, they were absolutely smashed by this influx of online orders.  An average of 1 million additional households were shopping online every month compared to 2019, so it’s no wonder there were major delays! But no matter the delays, Australian consumers continued to make purchases online and just wait the extra couple days or weeks for their packages to arrive.


But... does that mean bricks and mortar stores are leaving?

With the rise of online shopping, you’d have to assume the days of bricks and mortar stores are over, right? Well if you go visit your local shopping complex, you’ll have your answer. They aren’t dead yet and they won’t be for the foreseeable future. While click-and-collect has definitely been one of the driving factors keeping in-store shopping relevant (see below), it’s not the only thing keeping bricks and mortar stores alive. Us Aussies still love going to a physical store. A sense of community is brought to us with local stores and the Covid pandemic has given us all a real love for local


In a conversation with Chris Jones from Office Choice, we discussed the fact that at a certain time, Melbournians could only travel within a 5km radius and thus we gained this real need for local as well as a want for it. Chris tells us that it brought in “a lot of new retail customers in businesses that weren’t really that big on retail”. For lack of a better term, people really had no choice but to shop local at a certain time, but it caused them to stay too. Rather than travelling or staying indoors another day, people were choosing to go to local stores wherever possible. Not only this, but it was almost a novelty to go out to a store once they reopened again. We had been shopping online and staying inside for so long, that going to retail stores again was quite the event. No one is saying that online shopping isn’t going to prevail or even potentially quash the need for brick and mortar stores, but for the time being, it appears that Australians still want to go into stores. 


Click-and-collect for everyone!

There were many brands that already offered click-and-collect services, however they weren’t extremely popular. During Covid (particularly the hard lockdown Melbourne encountered), click-and-collect became everyone’s favourite shopping option! This option was usually cheaper than delivery and it was an acceptable excuse to get out of the house. Australians adopted this relatively new hybrid model of shopping in record time and it looks like click-and-collect is here to stay. I’m sure that I’m not the only one who was mentally reviewing the effectiveness of a store's click-and-collect experience during the pandemic. I think most of us were surprised by how efficient some of the services were in such a short period of time. Practically overnight, we saw stores create clearly marked designated collection areas, with a streamlined collection process. To this day, we are still using the click-and-collect method of online shopping and consumers don’t seem to want to change their shopping habits any time soon. 


The financial challenges and surprising triumphs

Businesses felt the harsh bite of the Covid-19 pandemic, as many closed their doors once and for all. While not every business was hit quite that hard, almost all businesses felt the impact of the pandemic. 67% of impacted businesses experienced lower demand for goods and services and 37% experienced cash flow issues. Most had to reduce staff and even let a significant amount go. Retail, of course, was one industry that was hit significantly hard, but shows signs of resilience.

Despite all the hardship, some businesses managed to actually do quite well. Businesses set up with flexibility in mind were actually quite prepared for the surprising turn of events. It’s not just the most flexible businesses that were doing reasonably well, there are some particular industries that did well too. Some of the most notable (and most interesting) are:

  • Groceries: Not just because of panic buying, but because people needed supplies and weren’t able to go out for meals and therefore, were cooking at home more.
  • Gaming: Well there wasn’t much else to do at the time! People were investing in the new Nintendo Switch among many other game consoles, video games and even board games!
  • Cleaning services: Cleaning requirements have changed completely, and so has demand for cleaning services.
  • Delivery services: Online shopping was surging, so of course delivery services were in high demand!
  • Fitness equipment: Gyms were closed and many people were choosing to invest in a home gym instead.
  • Tech: No one would be able to work from home without technologies like Zoom or Slack!


There are many other industries that actually had success during these extremely tough times and it’s not exactly nice to say. After all, it’s hard to celebrate the success of some when others are suffering. However it is interesting to see which industries did well and why that is. While retail was one of the industries hit the hardest, optimism is on the rise.


So what does the future hold for retail?

It’s hard to accurately predict what's in store for the future, but here are some trends we can expect to see:

  • More automation. Covid-19 seemed to push the world further into the future and we can only see technology accelerating at a faster rate from here on out. See what Woolworths are doing in the way of automation for a future automation example.
  • Online shopping and the hybrid model (click-and-collect) are here to stay and it’s safe to say these shopping methods will only increase in popularity over the coming years.
  • Smaller businesses and local confidence appears as though it will continue into the near future as we notice the importance of the independent retailer, the sense of community they provide and the flexibility of their business model.


The future will undoubtedly hold many other new and exciting things for retail, but we will have to wait and see what the future holds. Until then, we will be keeping our eye on the trends and updating our software to the world’s needs!

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