LONDON — Brick-and-mortar retailers will need to cajole, and comfort, shoppers more than ever this coming holiday, and assuage fears about crowds and catching the coronavirus in physical spaces.
In a report to be published on Monday, the British companies Springboard, which measures footfall and shopper numbers, and AL Marketing, a consultancy for retail and leisure destinations, have taken a look at the U.S. market in the run-up to Christmas, and attempted to gauge customers’ mood and appetite for spending, online and off-line.
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They’ve also put together a plan for physical retailers that are facing challenges this year in particular due to consumers’ worries about money, health and well-being.
In the report, “Unwrapping Retail Holiday Shopping 2020,” the companies surveyed 3,000 shoppers, demographically and geographically representative of the U.S. population.
Unsurprisingly, the report revealed that nearly three-quarters of shoppers are spending more online now than before the COVID-19 pandemic began. That figure coincides with a 60 percent decline in retail foot traffic across all types of destinations in the U.S., compared with 2019.
The report also found that roughly two-thirds of those interviewed intend to spend less on holiday shopping this year, and will change the types of gifts they buy. A little over one-third said they’ll buy more gifts, and plan to start their holiday shopping earlier because of long lines and restrictions due to COVID-19.
Some 63 percent said they are aiming to spend more online over the holidays this year, while 37 percent will spend more in physical stores. Roughly half said they intended to spend more at smaller, local stores rather than with larger retailers.
The report said that, based on the data, the retail “winners” this holiday will be brands with a strong online presence and smaller/local “mom-and-pop” stores, rather than large retailers, which may inadvertently be scaring consumers away because they’re not communicating properly with them.
Physical retailers large and small need to offer shoppers compelling reasons to get in their cars (or lace up their sneakers) and drive, or walk, to a mall, city center or shopping center, according to the report.
Stores need to exploit their outside spaces, put a focus on experiences and entertainment, encourage shoppers to visit during off-peak periods, extend opening time and start promotional campaigns earlier in order to capture the holiday shopper.
Diane Wehrle, marketing and insights director of Springboard, said in a video interview that shoppers polled in the U.S. were very concerned about leaving the house to go shopping for the holidays.
“They were nervous about being around other people,” she said, adding that retailers hoping for business would do well “to reassure customers that shopping is safe and that their stores also have an experience to offer.”
“COVID-19 generally has made us all desperate to go out and interact. Now, we’re in a period of the year when that desire to go out is heightened due to the holidays,” and retailers need to cater to those needs, she added.
U.S. shoppers are indeed a fearful bunch. The report reveals that 75 percent are making fewer trips to stores than before the pandemic, due to tighter restrictions and safety fears. Some 84 percent are fearful of “too many people, too close together in shops,” while 80 percent are worried about fellow shoppers failing to follow safety guidelines.
Other deterrents to physical shopping include worries about long lines and wait times, and cleanliness and safety measures in-store and in public areas. Frustration about closures — temporary or permanent — is also putting people off shopping in physical stores.
Wehrle said retailers need to keep a hawk eye on how many people are coming and going in their stores. They not only need to track footfall and density numbers, they must communicate their strategies to shoppers as well.
Stores should be proactive, she said, and push positive messages on web sites and digital channels. “They should be saying things like ‘Come shop with us on Wednesday at 2 p.m. when our occupancy is only 30 percent.’” They need to make consumers “feel safe, secure and encourage them” to venture outside the home, she said.
“A lot of malls in the U.S. and the U.K. have so far let themselves down. They may be implementing all the safety measures, but they haven’t necessarily been communicating what they’re doing to consumers,” Wehrle added.
Steve Booth, chief executive officer of Springboard who is based in the U.S., said during the same interview that “the mom-and-pop stores in particular have got to be proactive and make consumers feel physically, and mentally, safe enough to travel to a shop in the first place.”
The report emphasizes that “high-intent shoppers are incredibly valuable, as they are likely to make a purchase, and so they need the right knowledge and information to facilitate their choices.”
While physical retailers may be wrestling with many challenges this holiday season, some trends are working in their favor.
Booth said during the interview that pedestrian traffic across U.S. retail destinations was improving, with the annual decline moving from 73.9 percent between March and June to 70.8 percent in July and August and 64.9 percent in September and October.
The week-on-week change has improved, from an average of minus-3.2 percent between March and June to plus-1.7 percent in July and August and minus-0.1 percent over the last two months.
“Unwrapping Retail Holiday Shopping 2020” also looked at how the pandemic has fundamentally changed consumer behavior, with roughly three-quarters of people spending less on eating out, entertainment and leisure than before COVID-19 hit.
It highlighted that 76 percent are spending less on fashion, while 63 percent are browsing less and shopping increasingly “for a specific reason,” rather than for fun. The decline in spending is likely to extend into the future as more people will continue to work from home.
Some 75 percent of those surveyed are actively trying to be “more sustainable” with regard to their purchases, while 40 percent said they are donating more to charity and food banks than before the pandemic.