DURING THE LAST 12 months, economists and the media have reached for various letters of the alphabet to describe the economic rebound we can expect to see post-pandemic. A “V”-shaped recovery (sharp decline followed by sharp rebound), a “W”-shaped (a rebound followed by another decline and rebound) and even an “L” from those feeling a little more pessimistic (a decline followed by a period of simply going sideways) have all been suggested as likely.
In more recent times we’ve seen the term “K”-shaped recovery being used. This is reflective of the fact that some industries will see an immediate bounce back while others will struggle in decline — a two-paced economy at work. For many businesses, COVID-19 has not presented an issue at all — in fact sales have grown, in some cases exponentially, as a result of lockdowns and an increase in people staying at home.
The best examples have been home-based and online providers, and no greater example has there been than in the retail space where giants like Amazon have seen an acceleration in growth. Retail has not suffered in its entirety, with many in our industry benefitting from the inability of people to spoil themselves with spending in other areas like travel.
An increase in retail sales has been happening with many of our clients, but the true potential to grow has been seen by those who have embraced e-commerce enthusiastically and made the most of the increased preference for non-contact shopping that COVID-19 has created.
Many small businesses have been able to maintain their level of brick-and-mortar sales while growing their online presence significantly because of the new environment. Although the online behemoths have cashed in on this trend, there are still a significant number of consumers who would prefer to deal with a local retailer who can offer more personalized service. In recent weeks, we’ve seen a huge backlash against tech companies where consumers and users have become concerned about their dictatorial styles surrounding censorship, control of information and their use of personal data. For these consumers, a smaller, more personal service is preferable.
We are already seeing legislative pushback against the dominance of some big tech companies, and many users of communication apps are voting with their feet against behaviors they see as unacceptable from some of Silicon Valley’s biggest firms. This has been further backed up by comments from Tim Berners-Lee, the developer of the worldwide web, who has announced he is developing a means by which personal data will no longer be controlled by big tech companies but will remain under the control of individuals or the public in common.
These changes may have an impact on the “winner takes all” structure by which many companies have come to dominate our online choices, and could instead create a more level playing field for smaller businesses to stake their online presence. There’s no doubt big tech companies carry a lot of power and will not relinquish it lightly, but public sentiment often turns into legislative change by politicians anxious to stay in power, and if this trend should continue and the voices become louder, then we may start to see a reshaping of the online landscape as we know it today.
The important thing is the need to continue to develop your online presence and what you offer your customer in online sales while watching out for new developments in the space. With digital purchasing already close to 15 percent of all retail sales and likely to continue accelerating its rate of growth, there will be considerable opportunities in this area in the years ahead.
The internet has also demonstrated its power in giving a voice to the masses. The impact of this for retail will show up in reviews, where increasingly the opinion of others will affect buying decisions for potential customers you have never dealt with before.
Harnessing online sales and the power of the internet’s voice will be crucial to the success of all retailers in the future.