The new era of retail

Claire Goodhead - Assortment and Space Director


New and growing trends

Over the past year, we’ve seen trends, discoveries, and developments grow out of and accelerate because of the COVID-19 pandemic. It has never been more important to understand these trends and how they will play out in your retailer, store, category, and brand.

A new type of need

Customer needs and decision-making processes are changing. What does this look like for your customers? How can you address these changes in your retail environment?

To answer these questions, we analysed patterns in customer spending to determine how COVID-19 changed customer basket dynamics. Different patterns of customer behaviour were exhibited in each stage of the pandemic, from the early stages of awareness and preparation, to full lockdown and to the loosening of restrictions.

Prior to 2020, there was a degree of predictability to category sales performance. COVID-19 has entirely disrupted us from this path, and for the first time, categories, channels, and retailers that previously saw low levels of incremental growth, or even decline, are suddenly seeing double-digit swings in performance.

What we can’t foresee is how far, and for how long, these swings will persist. To a large extent, this will be driven by the length of time in which the market is in flux. The longer the shock continues, the longer the customer has to settle into new patterns of shopping behaviour, where consumption habits become entrenched and embedded into daily routines.

The ability of retailers and brands to remain on top of these changing patterns of demand is crucial to retaining customers, delivering the right offer, and ensuring better product availability.

A greater concern for health

Recent research shows that obesity and COVID-19 together are a dangerous combination. Individuals with lower, healthy-range BMIs generally have better outcomes than those with overweight and obese BMIs.

Never before have customers been more aware of their health and the collective health of the nation. COVID-19 has shown that a global pandemic and subsequent lockdown inevitably puts the topic of health in the front of consumers’ minds.

Not only has this pandemic brought with it a greater demand from consumers for healthy products. It also restricted consumers’ abilities to partake in physical activity.

These factors have culminated in consumers who are looking to make healthier choices at the grocer. Today, playing to the health-related credentials of products and brands resonates with consumers. By innovating and extending the assortment of healthier alternatives your store provides, you’ll be set up to succeed in today’s health-focused world.

How will your store adapt? How do you help customers make healthier choices? Are there options in your category for consumers to switch to reduced salt, fat, sugar, or cholesterol choices? How does your assortment of healthy goods line up against the competition?

A focus on sustainability

Now, as policies are put in place to respond to and recover from the COVID-19 crisis, many are calling for policymakers to address the climate crisis along with it. Consumers are looking to put their money behind this cause and support businesses and retailers that minimise their impact on the planet and help them to do the same.

Does your retail environment make this easy? Do you offer items that will help your customers live a more sustainable lifestyle? Does your company support green initiatives and take internal action by making eco-friendly choices? What is your stance on packaging? What is your company doing to reduce and encourage the reusing and recycling of your product packaging? Consider these things as retail shifts into a more eco-conscious era.

A demand for online options

With the COVID-19 pandemic came the urgent need for consumers to stay in their homes but still be able to make purchases and replenish consumable goods. For online-only and omni-channel retailers who were already comfortable in the remote shopping space, this significant upswing in online shopping was welcome news. But retailers relying solely on brick and mortar stores for sales have had to struggle to keep up and catch up.

To capitalise on the major shift toward buying online, retailers should do things like drive bulk items and complementary purchases to help customise and enhance the buying experience. With such a big swing in the number and nature of customers engaging through online channels, it’s crucial to understand how this impacts demand and how to adapt your online offering accordingly.

Embracing data-led retailing

In this new climate, data-led retailers will have the advantage. They will make more of the right decisions in-store and online, giving them a competitive advantage during this time of unprecedented change.

Never has customer behaviour been more chaotic and never has it been more important to quickly assess the direction of travel. Uncertainty is here to stay, and there is an advantage to be had in staying closely connected to the ever-changing needs of customers.

Over the coming weeks, we’ll share more about how you can use customer insight to stay on top of the latest trends and keep pace with the current and anticipated changes in demand. We’ll get started with an exploration of the customer decision tree (CDT), its role in the category management process, and the importance of re-evaluating the shape of the CDT on the back of recent market shocks.

Want to find out more?

If you would like to find out how we can help you discover insights for your customers, contact us now.