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  • The Covid-19 pandemic is just the latest challenge for retailers.

  • The high street has been under pressure for some time

  • as more people opt for the convenience of shopping online

  • and retailers have also struggled in the face of increased competition.

  • Lockdowns, social distancing regulations and falling consumer confidence

  • have made the situation worse, with many retailers closing stores.

  • So how is the retail sector facing these new challenges?

  • Across the world, lockdowns and social distancing measures

  • have forced many retailers deemed non-essential to close their physical stores.

  • The shock fall in revenue has pushed many firms into financial crisis.

  • In the U.K. alone, fashion chains Oasis, Warehouse, Debenhams and Cath Kidston,

  • just to name a few brands, went into administration.

  • At the same time, consumers, confined indoors, were forced to use online shopping for most items.

  • In April alone, Inditex, the biggest fashion group in the world,

  • which owns Zara and Pull&Bear among others, reported a 95% increase in online sales.

  • H&M reported a 40% jump in online sales from December until the end of May.

  • And this is a trend that's likely to accelerate as more people come online.

  • While the overall impact of the pandemic on e-commerce remains to be seen,

  • the coronavirus crisis has already altered consumer behavior.

  • Among 100,000 consumers surveyed in 50 different markets,

  • 45% said that they are prepared to keep using products and online stores they found during the lockdown.

  • This number rises to 50% for households with children.

  • To answer this demand, retailers will have to keep

  • investing in their online presence and delivery services.

  • For example, Go Instore, a retail technology start-up, works with retailers to provide customer support

  • through its advisors, who can offer tips on products and answer customers' questions.

  • But now on this device here it's even more intuitive than before.

  • It's all about giving consumers the comfort they might not get without a human-to-human interaction.

  • We're still utilizing the stores and the store staff, it's just they're being utilised digitally.

  • So what does the future hold for brick and mortar shops?

  • Will the high street or the mall be another casualty of coronavirus?

  • There's a lot of uncertainty. We're bringing in all this social distancing

  • and that's creating for a lot of people quite a frustrating customer experience, right.

  • You can't try on clothes in the changing room, you know,

  • a lot of the stock has to be put elsewhere after you've touched it.

  • Many brands are taking stock of how much physical presence they need.

  • Inditex, for example, said it will close up to 1,200 shops worldwide.

  • Department stores John Lewis and Debenhams have also announced store closures in the U.K.

  • Nonetheless, analysts are convinced the pandemic won't mean the end of the physical store.

  • So I'm quite bullish on this. People are coming back to stores.

  • Our consumer research has told us time and time again that people like shopping in stores.

  • Even millennials and Gen Zs that have all the apps on their phones still like to shop in stores.

  • As lockdowns lifted, consumers have been returning to the shops in droves.

  • For instance, retail sales in the U.K. jumped 13.9% in June from the previous month

  • as non-food and -fuel stores were allowed to reopen.

  • In the euro zone, retailers also registered a higher number of purchases

  • when lockdowns began to lift in the month of May. Retail sales were up 17.8% from April.

  • But in most cases, shoppers returned to a different retail experience.

  • There are limits on how many people are allowed in store,

  • temperature checks are the norm in some places and there are restrictions on trying on clothes.

  • Even so, we might opt to shop in different locations.

  • In the short term I think malls and retail parks will do better because they are able to do social distancing,

  • they're wide, open spaces, they have big passageways, it doesn't feel unsafe.

  • 66% of people have said they will continue to avoid busy places even as official restrictions are relaxed.

  • Locations that used to command a premium on rents because of high footfall

  • might now be a drag on tenants and landlords alike.

  • How about our shopping carts?

  • Have our spending habits changed because of the pandemic?

  • We'll see a lot more athletic wear, loungewear, casual clothing, fewer dress-up and occasion-wear.

  • And combined with the fact that people are going to be working from home more,

  • there will be obviously fewer office and formal clothes, and more casual clothes.

  • So it will be a shift in the mix of what people buy.

  • Recent data has also shown a surge in bicycle sales,

  • DIY products and furniture items as people spend more time at home.

  • Besides catering to these new consumer patterns, some retailers are looking

  • to bridge the online and the physical store experience in this new landscape.

  • Demand for our technology from our existing customers increased dramatically.

  • And then we've had a huge influx of new retailers coming to us and trying to utilize the solution.

  • What sort of retailers are looking at your product and seeing, 'well this could really help us'?

  • Think about the products that typically you would research online

  • but you would be more comfortable to purchase in store.

  • So things like consumer electronics, cosmetics, believe it or not, fragrance is working really well,

  • and then of course we've got things like sporting goods.

  • And unlike other leisure industries facing further disruption,

  • retail still represents an opportunity for consumers to part with their cash.

  • There is a real desperation in a lot of people to get back to doing normal things.

  • And actually going to a store and going shopping could be a part of bringing that normality back.

  • Hi everyone. Thank you so much for watching.

  • Where have you been shopping lately? Let us know in the comments section

  • and don't forget to subscribe. I will see you soon.

The Covid-19 pandemic is just the latest challenge for retailers.

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How Covid-19 is changing our shopping habits | CNBC Reports

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    Summer posted on 2020/08/18
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