It’s safe to say that 2020 was a challenging year for retail. With unprecedented circumstances to navigate, specialty stores, department stores, and local shops have all faced severe challenges in this new reality. Read on for a closer look at the state of retail as we close out 2020 and look to the year ahead.
The PRH Consumer Insights team spent last year closely examining how the retail landscape shifted in real time due to the pandemic. Here are some key insights they discovered about what the world of retail might look like going forward.
In 2020, retailers had to adapt to a digital-first world. There was more than 44 percent growth in e-commerce this past year, and experts think that digital commerce advanced four to six years in the first six months (Axios and Forbes).
Retail still fills the need for instant gratification, with BOPIS and curbside pickup. BOPIS (buy online, pick up in store) and curbside pickup have helped shoppers get the immediacy (and safety) they desire. It’s estimated that BOPIS has grown at least 195 percent during the pandemic (Forbes).
Younger shoppers rely more on digital, and experience is no longer king. We’re actually seeing a seismic shift among Gen Z and Millennials in this regard: “53 percent say they would prefer to spend on products over experiences,” a huge shift from 2019, when experiences trumped products (YPulse).
“Webrooming” provides the best of both worlds: best price and feel-good. Webrooming—the practice of researching something you want to buy online and then later purchasing it in a shop—remained popular in 2020 even as budgets were pinched and online savviness grew. Experts predicted this phenomenon would become more popular over the holiday shopping season, even with 88 percent of shoppers already saying they “webroom” by June (ReadyCloud).
Smaller purchases like books remain popular. As folks were bored at home, the “impulse buy” took on new meaning, and books had an ideal price point. A study found that the top emotional driver for online purchases among Gen Z and Millennials is boredom, and 38 percent say they are making more impulse purchases than usual (YPulse). It also looks like the pandemic has exacerbated some consumers’ online shopping habits, with one study showing that 27 percent of online shoppers said they were making more impulse purchases during this time (Field Agent).
Values matter more than ever. Consumers find it more critical than usual to shop local, support Black businesses, and purchase in line with their values. Among Millennials, 51 percent planned to make the majority of their holiday purchases from local stores (YouGov), and according to data from Accenture via Retail Touch Points, 40 percent of respondents planned to support and shop at minority-owned businesses. With the widespread discussions about representation and social justice that took place in 2020, it is not a surprise that consumers were more conscious of their buying patterns as they partook in holiday shopping.
As we emerge from a year like no other, our sales and marketing teams have learned a tremendous amount about adapting to these new patterns in retail. We will continue to follow these trends into 2021 in order to stay ahead of the curve and keep your books at the forefront of consumers’ minds.
Grant Griglak is Director, Consumer & Marketplace Insights at Penguin Random House. Evelyn Luchs is Analyst, Insights Research at Penguin Random House.