The retail quickening
Colin Neil, MD of Adyen UK, explains the retail ‘quickening’ and the dawn of adaptability
The Coronavirus pandemic accelerated a decade’s worth of innovation within the retail sector in a matter of months, including the adoption of new technologies. McKinsey termed this growth as “the Quickening” comprising 10 years of ecommerce growth which took place in just three months in the US alone and 75% of consumers tried different stores, websites and brands in 2020. As expected, clothing sales plummeted at the start of the pandemic while other categories like groceries, alcohol and home improvement materials increased.
With the UK going in and out of lockdown, retailers were forced to close shop for extended periods of time. It’s only natural that the shift to online shopping was so noticeable. By February 2021, 75% of consumers had said they had been shopping more online during the pandemic than before. Somewhat counterintuitively, retailers had an opportunity to reach more customers than ever before during the pandemic – even the small independent stores opening an online presence to cater to their customers.
With more merchants online, consumers were given more choice than ever. This mass availability of products also created a growth in competition, and niche independent stores were able to go up against the established chains in the digital high street. Merchants were forced to deliver quick, easy and enjoyable checkout flows in order to keep customers satisfied.
What remains to be seen from this period of digitalisation is which trends are reversed and which become permanent shifts. As retailers look to capitalise on the ‘golden shopping quarter’ around Christmas and New Year, here are three trends businesses are harnessing as a result of “The Quickening.”
Ecommerce and the high street working in tandem
Adyen’s research from 2020 found that 31% of people are less likely to shop in physical stores now because of their positive experiences shopping online during the pandemic. Furthermore, 72% of these consumers want retailers who started an online service during the pandemic to continue operating it in the long term. This isn’t to mean that the high street is seeing its much-vaunted death. In fact, while the pandemic accelerated a shift to online shopping out of necessity, research from 2021 found that 54% of Brits said they prefer to shop in physical stores, up from 50% in a similar study conducted last year. Businesses therefore need to ensure that their omnichannel strategies are watertight to cater for those who like to shop in-store but appreciate and prioritise the convenience of online retail.
Retailers have used the time in lockdown to make changes to enhance the customer experience, which has not gone unnoticed by consumers. Adyen’s research in April, when non-essential retail had just reopened, found 24% of respondents saw retailers create links between physical and online stores, 22% noticed efforts to improve the in-store shopping experience, and 21% appreciated retailers using technology to reduce physical touchpoints.
These transformations are only set to continue with an increase in contextual commerce. This concept enables retailers to implement frictionless shopping opportunities into everyday activities and environments for consumers. Contextual commerce is the notion behind the buy button which has crept into social media platforms like Instagram and Pinterest, and most recently on TikTok; the video-sharing application is now producing live shopping and entertainment events where users can buy products directly on the platform. By harnessing these available technologies retailers will be able push boundaries in retail and engage with consumers more effectively.
Platforms taking centre stage
Platforms and marketplaces aren’t new. The likes of eBay, Etsy and Not On The High Street have been around for years. The pandemic has increased the sales from platforms across the world and their marketplaces and payment features are ideal for retailers looking to sell online but don’t have the resources to develop their own ecommerce portal. To deliver the maximum experience for those retailers using platforms, it’s crucial that platforms and marketplaces can offer streamlined onboarding processes and rapid pay-outs.
Platforms also give merchants access to tools which they may not have understood, or been able to implement themselves. Payment tokens are the perfect example of this. Tokens replace sensitive data and improve the payments experience. Sensitive data, such as primary account numbers are replaced by a token in real time meaning sensitive data is never used in a transaction. This dramatically cuts down the chance of fraud because the one-time token can’t be hacked or used again. Tokens therefore enable consumers to securely save or share their payment details with merchants across a platform, opening up the possibility of one click – or even no click – payment experiences. For merchants, tokens help to improve payment authorisation rates and conversions, meaning more satisfied customers and increased pay-outs.
The value of ethics
The pandemic and the greater acceptance of social values, as well as the growing climate emergency have ensured that values now play a bigger role in the how consumers shop. Our research found 62% of consumers felt that as a result of the pandemic, a retailer’s ethics, like paying staff fairly, contributing to the community, or environmental support, was more important to them and plays an impact in their shopping decisions. Understanding this and being able to show it to consumers while being genuine, is an important step in building brand loyalty and winning over new consumers.
Next steps to success
It is likely that many of the seismic changes caused by the pandemic, will permanently impact the retail industry. With the Christmas shopping period well underway, and further pandemic-induced restrictions looming, it’s more important that ever that retailers maintain the new services and solutions that have been rolled out and capitalise on them. As our research has found, many of the habits and experiences developed will remain. Therefore, it is essential that retailers are both flexible and agile, to stay resistant to market changes in the new retail age.