Amid the coronavirus crisis, it has arguably never been more important, nor more difficult, for retailers to understand their customers.
How are shoppers feeling about their own finances, the economy and life in general? Are they shopping more online under lockdown measures? Which retailers are they gravitating to? Does the switch to ecommerce mark the new normal? Or will old shopping patterns and habits start to return as lockdown measures ease?
As retailers grapple to understand evolving consumer trends and how they could shape the future of commerce, Retail Week has joined forces with analytics specialist The Smart Cube to answer some of those questions.
Our new bi-weekly Coronavirus Consumer Pulse monitor will pull together data from a multitude of sources to better understand consumer behaviour and sentiment, track how that is changing alongside the government’s actions and restrictions, and establish the businesses that are emerging as the online winners during the crisis.
Retail Week and The Smart Cube have combined their machine learning and sector expertise to analyse online search trends, website traffic, app downloads and use, social media posts, physical mobility data and government actions to paint a picture of the current retail environment – and analyse what it might mean for the future of the sector.
The Smart Cube’s mobility index reveals how footfall to different destinations has varied since the start of 2020. As the first cases of the virus began to emerge in the UK, mobility remained fairly stable. In the two weeks before lockdown measures were introduced on March 23, traffic to grocery and pharmacy retailers jumped above normal levels as shoppers sought to stock up on goods such as toilet rolls, hand sanitisers and ambient foods.
By the time the stringency index – which measures the severity of the government’s response measures – reached its peak with the introduction of a nationwide lockdown, traffic to all retail, grocery and pharmacy properties had plummeted from their pre-coronavirus levels.
Although the number of people visiting grocery and pharmacy retailers has stabilised since the start of April, any increases have lagged behind the rate at which people are returning to parks, with consumers still having a degree of scepticism about how safe shopping environments are.
With that in mind, online has become a key battleground for businesses. Although ecommerce sales have spiked for a number of businesses – particularly big four grocers Tesco, Sainsbury’s, Asda and Morrisons – retail leaders are now asking themselves whether such levels of online penetration represent the new normal, or whether old shopping habits will return in the longer term. After lockdown measures were eased yesterday, the Coronavirus Consumer Pulse will track how consumers are responding to that, both in terms of their physical mobility and online habits.
Rachit Khare, vice president of analytics and data science at The Smart Cube, said: “Covid-19 has no doubt had a significant short-term impact on consumer behaviour, driven by the much-needed government response to contain this pandemic. The longer we stay within this new construct, the higher the chance that some of these short-term behaviour adaptations become long-term consumer habits. Given what we are already seeing with higher digital traffic and ecommerce sales, this may have a significant bearing on the future direction of retail.”
Shoppers shift online
The grocery sector emerged as the obvious early winner as the lockdown was enforced. In the two weeks beginning March 8, the average daily traffic to food retailers’ websites rocketed. Retailers including Tesco, Sainsbury’s, Asda, Morrisons, Waitrose and Iceland scrambled to increase online capacity to cope with the surge in demand. Since lockdown measures were enforced, that peak has been gradually flattening, but the average daily traffic to online grocery websites still stood at almost 597,000 in the week beginning May 3 – a 57% spike compared to the first week of March.
Traffic to home and DIY websites remained flat until mid-March and has spiked since early April. In the week beginning May 3, average daily visits to the websites of home and DIY retailers including Ikea, B&Q and Homebase hit 596,682 – a 59% jump compared to the levels recorded in early February – despite an increasing number of such stores starting to re-open their doors.
Online fashion was the only category of those analysed to suffer a prolonged fall in website visits during March. Average daily traffic to the UK’s most popular clothing websites fell 27.9% during the month but has recovered in the weeks since.
Waitrose registered one of the most pronounced spikes in online demand during the lockdown period. Visitors to its website began to jump during the week beginning March 8, peaking two weeks later at an average of 423,571 visits a day, when lockdown measures were enforced. But like many of its grocery rivals, online traffic has started to subside since following consumers’ initial rush to stockpile.
During its peak week starting March 29, Tesco’s website was receiving an average of 2.1 million visits every day, the data suggests. Online grocer Ocado’s traffic peaked the week before when it registered an average of 671,995 visits per day. The etailer was forced to prevent new customers from registering to deal with the spike in demand – something that is likely to have contributed to a drop off in website visits and downloads of its app, which also peaked during the week beginning March 22.
Data from Android suggests that shoppers are increasingly using their smartphones to shop during the pandemic. The number of retail apps being downloaded increased every week during March, although they began to slow during April and early May. As lockdown measures ease this month, and with the government hoping more non-essential shops can open in June, how quickly will consumers ditch their phones and tablets to return to physical spaces?
Towards the end of April, social media users were beginning to convey more positive attitudes towards retail and the notion of shopping in stores once again. According to The Smart Cube’s Twitter analysis, 83% of tweets from consumers regarding retail portrayed positive messages such as gratitude, happiness and optimism. The terms ‘Starbucks’ and ‘barista’ were posted thousands of times by Twitter users between April 26 and May 8 as people looked forward to the coffee chain reopening again.
Sentiment towards the government’s lockdown measures lends further support to the fact people are seeking a return to normality. Between April 26 and May 8, as lockdown measures were relaxed in other countries and reports circulated that the UK was poised to do the same, 68% of tweets regarding lockdown were positive. That compared to just 41% in the first two weeks of March.
With lockdown measures now eased, people returning to work and a greater number of retail and catering outlets – including B&Q, Homebase, Starbucks, Pret A Manger, McDonald’s and Greggs – cautiously reopening their doors to consumers in various forms, what impact will that have on consumer sentiment, mobility and online shopping habits? The next Coronavirus Consumer Pulse monitor at the end of May will offer an early indication as to what trends could emerge.
To find out more about The Smart Cube or the Coronavirus Consumer Pulse monitor, email email@example.com