Jul 2, 2020
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Covid-19-linked shift to online is long-lasting says new report

Jul 2, 2020

The debate is still raging about how permanent UK consumers’ even-bigger move to online shopping will be once Covid-19 is a distant-but-unpleasant memory. But a new report suggests that it could have shifted the balance between retail and e-tail more permanently than some believe, with the trend being seen elsewhere in Europe too. 


Alvarez & Marsal and Retail Economics surveyed consumers in the UK and Europe and have predicted that 17.2 million of them in the UK alone (that’s 25% of the total 66.6 million population) will change the way they shop permanently. 

While this is a direct reaction to ongoing fears over the coronavirus, those fears are expected to be long-lasting and to drive online growth faster than would otherwise have happened.

What’s particularly significant is that the pandemic has jolted a whole consumer group, who were previously online-resistant or were adopting behaviours such as e-shopping and e-banking very slowly, and turned them into online converts.

And the consumers who are most concerned about the risk of Covid-19 are also most likely to switch to online long term — in fact, they’re four times more likely to do so than the wider population.

In financial terms, this switch is likely to add around £4.5 billion to UK online retail sales this year, even at a time when many consumers are reining-in their discretionary spending.


This change is also being seen across Europe with the deliberate reduction in physical shopping trips and the increase in online shopping having a clear correlation.

In the UK, 35% of consumers say they will cut the frequency of their visits to physical stores while 34% will shop online more often. In Spain those figures are -37% and +41%, while in Germany they’re -16% and +23%. In France, physical shopping trips will be cut by 32%, while 26% will e-shop more often. For Italy, the figures are -44% and +38%, while for Switzerland they’re -18% and +18%.

What’s interesting too is that for all countries except France, the average amount that consumers will cut from their in-store transactions is smaller than the average amount by which they’ll increase their online transactions.

It’s not completely clear whether a discovery that online is ultra-convenient or a basic fear of Covid-19 is the strongest motivating factor in the behavioural shift, but the study suggests it could be the latter.

In the UK, for instance, consumers seem to have a low level of confidence in the government’s handling of the pandemic, which could also be affecting their view of whether to shop in physical stores any time soon. Some 69% of consumers think the official response to the virus hasn’t been good and 55% still see the virus risk as high.

So it’s no surprise that as many as 48% are planning to avoid busy locations like major shopping centres, even with all the measures that mall operators and individual stores have in place to keep customers and staff safe.

It all means retailers need to accelerate their plans for adapting to a new retail world and ensure that physical stores are even more able to support the online arm of their businesses, even though the picture is still very uncertain. “The way we shop has fundamentally changed and it is unclear how the dust will settle,” Alvaraz and Marsal’s head of restructuring Richard Fleming said.

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