It would be no overstatement to suggest that the Covid-19 emergency has prompted one of the most seismic shifts in consumer behaviour in the last 100 years.

A recent survey by Accenture showed that Covid-19 is causing consumers to rethink their purchasing priorities, with many of these changes likely to continue long after the pandemic has passed.

According to the latest data from the Office for National Statistics, monthly retail sales suffered their largest fall ever recorded in April. Inversely, ecommerce sales reached a record high, accounting for 30.7% of total retail sales, as millions of consumers switched to online purchasing while in lockdown.

Though the current scale of the shift is dramatic, this migration of consumers to digital channels has been building for the last three decades. As the epidemic in the UK prompts an unprecedented shock to demand, the growth in ecommerce is poised to continue. This begs the question: why are so many retailers seemingly so ill-prepared?

As retailers race to boost their online propositions, new challenges are emerging. There is a clear opportunity to grow the business through digital, but since many retailers generate the bulk of their revenues from stores, they need to revise their operating models.

“If the 20th century was all about bricks and mortar, Covid-19 has strong-armed the 21st century into ecommerce as the dominant force in retail”

Moreover, launching a new service requires a higher operating cost structure, while anticipating future demand is extremely difficult when the course of the pandemic remains unknown.

This is not a case of too little, too late, but an opportunity for businesses to reassess, plan and emerge with stronger digital offers. If the 20th century was all about bricks and mortar, Covid-19 has strong-armed the 21st century into ecommerce as the dominant force in retail.

Retailers will need to accelerate the switch to scalable and flexible digital solutions, which means re-evaluating three key areas of their digital strategies.

Accelerating ‘digital first’

Over the last few years, we’ve seen more and more traditional retailers talking about a ‘digital-first’ strategy. From fashion brands like Calvin Klein to DIY retailers such as Wickes, digital-first has been espoused as central to business transformation plans.

Normally, this pivot is expected to take years – today, it needs to happen in mere months.

Digital now needs to sit at the heart of everything. While there may be pressure to cut costs, retailers should look at how transferable skills can be moved to support digital capabilities and assess how technologies could allow them to work more flexibly and effectively.

“Working habits have been transformed and we have discovered we can work in a faster, leaner, more effective way”

Steve Rowe, M&S

Marks & Spencer boss Steve Rowe, for example, suggested that working from home and using online conference calls was one of the retailer’s “most important” learnings from lockdown.

“Working habits have been transformed and we have discovered we can work in a faster, leaner, more effective way,” Rowe said. “I am determined to act now to capture this and deliver a renewed, more agile business in a world that will never be the same again.”

Micro-fulfilment and drive-throughs

Not too long ago, the talk of the town was all about reinventing retail to make it more of an experience. We were obsessed with building in more reasons to make people stay longer, putting everything from creches to barbers into stores. Now it’s about getting people in and out as quickly and safely as possible.

With most large retailers having a sizeable physical footprint to contend with, along with its high costs, they need to quickly make these stores useful again. The opportunity to do that is by ramping up alternative fulfilment options, in particular micro-fulfilment and drive-throughs.

Retailers like Walmart have been trialling micro-fulfilment concepts pre-pandemic, recognising the huge potential in using excess store space to support urban fulfilment.

As we face the long-term ripples of this pandemic, micro-fulfilment will help retailers use their physical footprint to support a digital-first strategy.

Drive-throughs have long been a hallmark of American culture, but in the UK they have largely only been a feature for fast-food restaurants. As people become more accustomed to browsing online instead of in store, drive-through retail presents a big opportunity.

Dixons Carphone has already launched drive-through options – others should follow suit, particularly at larger-format stores.

Digital marketing

Covid-19 has decimated parts of the marketing world that retailers have long relied on – storefronts, out-of-home, live events – while online, social and broadcast have gained more ground.

Retailers need to quickly consider how they can redeploy their marketing spend to channels that benefited in the lockdown, while at the same time using data to quickly adapt strategies and create culturally relevant products.

“With the UK beginning to reopen again, there is an opportunity for retailers to be a bit bolder in their messaging”

Businesses were keen to highlight their community focus at the beginning of the pandemic and, with the UK beginning to reopen again, there is an opportunity for retailers to be a bit bolder in their messaging.

Key to that will be using customer data and insight to ensure marketing is spent on the appropriate channels – and not being tempted to focus on driving footfall, but driving engagement and purchasing through digital.

Although the initial focus for all retailers will be to use digital commerce to drive cash flow and maintain the safety of their employees, it’s not too early to consider how they should react to the likely permanent shifts in consumer behaviour as a result of this crisis.

Consumers have been quick to shift their buying habits online – the retail response needs to be equally rapid. Businesses must act quickly and deliberately to improve their capabilities if they are to drive growth in the digital future.