While we are approaching the “Freedom Day” in Britain, there are still many unknowns regarding how the UK economy will be able to adapt to the post-pandemic world. And above all, to the consumers who have never before had to change their life habits along with the purchasing ones so quickly. To understand what has changed during the pandemic lockdown, let's take a look at some insightful data in a retail context that would serve as food for thought regarding how retail must transform to keep up with the customers’ changing needs.
First of all, we can safely assume that the transition into a cashless society began long before the COVID-19 emergency. 57% of global consumers already used contactless cards and 40% used smartphone payments in 2019. And during the quarantine the trends became even more dynamic, putting balance and comfort in the first place in other contexts as well. For example, in 2020, 59% (+15% comparing with 44% in 2011) of GB 25–34s felt the need “to have a shorter working week and more leisure time, even if it meant lower salary”¹. The pandemic is only accelerating the transition into a cashless, balanced and dynamic society, which has a huge impact on how people shop nowadays offline and online and which payment methods are preferred.
Practically every sector related to the online services and shopping has demonstrated double or even triple-digit growth during the lockdown period. From online retail sales, which registered +23.27 billion GBP growth in 2020 (£99.31 billion, while in 2019 the online retail sales value was at £76.04 billion) to the almost constant year-on-year 200% growth in weekly online orders in home and leisure retail during the COVID-19².
Ecommerce grew exponentially in February, March and April of 2020. Let's take a look at some data from the Office for National Statistics (UK), the executive office of the UK Statistics Authority. The data offers an overview of the UK customers' online purchasing habits during the lockdown period in 2020, organized into categories of goods and services ranked by share of individuals who purchased online in Great Britain in 2020. Below are the top 6 categories (6th place is divided between two categories):
However, this trend is not exclusive to physical goods. In Italy, for instance, payments to the public administration have also grown significantly. According to MyBank’s reports, these payments result in a striking figure, mostly carried out via PagoPA, whose value almost doubled (+94%) in February-April 2020 compared to the period from February to April 2019. PagoPA is an e-payment system in Italy that takes care of transactions in favour of public administration entities.
“There are still too many uncertainties to be able to establish with all confidence how the post-Covid-19 scenario will unfold. The experience we lived through and the fruitful discussions we had with companies recently revealed that the post-Covid-19 scenario will require:
We at MyBank have built a solution by combining the needs expressed by individuals, companies and public administrations and by creating the lowest common denominator. A service line that has been inspired from the very beginning by the "New Normality" and that is key to the future post-pandemic reality". Giorgio Ferrero, CEO of PRETA/MyBank.
According to the survey done by Appinio, there have been changes in online buying among UK consumers since COVID-19 2020-2021. Over the past year during the pandemic, a significant number of consumers in the UK have reported changes in their online shopping behavior. Specifically, in the beginning of the lockdown in March 2020, 41% of the UK shoppers reported they had been buying more online than before the pandemic, 49% had been buying online as much as before and 11% less than before. By February 2021, however, the percentage of shoppers who reported they had been buying more online than before had grown to 71%, buying as much online as before had decreased to only 24%, and those who purchased less online than they used to had reduced to mere 5%. By the same token, offline shopping has decreased over the analyzed period.
Fast-moving consumer goods (FMCG) have experienced changes in the promotions as well during the pandemic. The biggest promotional change³ was witnessed in chilled coffee and tea drinks (+6.3%), to follow is white wine (+6%), gum and mints (+4.5%), trail mix and spirits around +3% each. While the squash, facial tissues, shampoo and conditioner promotions reduced by roughly 6% and kitchen towel and toilet tissue experienced almost -10% in promotional change.
Interesting data extracted from Appinio’s surveys is reported regarding the type of consumer goods that people started buying more frequently and/or in higher quantity after the pandemic started. For instance, in March 2020 33% of respondents claimed to purchase more hand sanitizer than they used to, while this number climbed to 64% by February 2021. Same thing goes for soap and handwash – 32% in March 2020 and 52% in February 2021, demonstrating a stable growth over the year. Cleaning products demonstrated less stable growth over the year, and even so, in March 2020 29% of respondents said they purchase more of the product than before the pandemic, while 45% reported the same in February 2021.
Clearly not all sectors benefitted from the quarantine period. For example, travel has been one of the most affected sectors, business travel in particular. According to The Global Business Travel Association (GBTA) poll, business travel potential loss in 2020 is $820.7 billion, while 54% of companies worldwide suspended all or most of their trips. Events and automotive industries have also suffered a sharp drop in revenue in 2020, by potentially $30 billion globally and $86.9 billion in Europe respectively, according to Statista.
On the other hand, there is high propensity to buy, which can be measured by tracking visits to brand websites. According to an analysis done by Comscore MMX, the increase in browsing websites of brands that deal with ticketing, real estate, car production and travel has already been noted across Europe starting from the second half of April 2020. This data bodes well and confirms the consumers’ willingness to return to the “new normality”, also in the consumer sector.
Foresight Factory - Life under coronavirus, 2020.
Edge by Ascential, 2021.
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