Retail and payments in the COVID-19 era: how retailers can survive the second lockdown

While every sector has been affected by COVID-19 in some way, the retail industry has experienced one of the most dramatic shifts of all. With the UK and much of Europe in a second lockdown many bricks-and-mortar outlets are being forced to close their doors once again and many retailers are fearing the changes that will come from this.

Back in March 2020, when the first lockdown began, the UK government released its retail sales report which measured the volume of retail sales for that month. The report found that sales fell by 5.2% in March 2020, which then fell further by a record 18.1% in April 2020, when lockdown was at its peak. However, alongside this drop in bricks-and-mortar retail there has been an explosion in ecommerce. In the same April report, online sales soared to the highest on record for that month, hitting 30.7% of total sales.

Many are wondering if the same thing will happen again this November, especially with the holiday season approaching. Consumers are looking buy gifts and take advantage of black Friday deals and will change their purchasing habits to achieve this. Merchants need to be sensitive to how consumer behaviours have been impacted by the COVID-19 crisis and adapt the way they do business to keep up.

HOW HAS COVID-19 IMPACTED CONSUMER BEHAVIOUR?

Many of the consumer behaviour trends we’ve observed – decreasing in-store footfall, the growing preference for ecommerce, the rapid move away from cash payments – were well documented before the first lockdown. COVID-19 has simply accelerated these factors due to the increased necessity of online shopping and public health messaging advising against handling cash.

Alongside this, the pressures of the first lockdown forced unexpected shifts in consumer behaviour and the same will likely happen again with the second. A mid-2020 Mintel report found that consumers under lockdown were diverting funds that would normally have been used for a holiday or a night out into purchases like home improvements or entertainment. Many consumers, deprived of their usual leisure activities, found themselves with more disposable income, and were happy to spend it online.

Categories like DIY and sporting goods (such as bicycles) saw unexpectedly huge demand. Then in early lockdown, when all but essential shop visits were disallowed, many previously hesitant people took to shopping online for the first time. Consumer’s still wanted to make purchases and with the holidays coming up retailers should prioritise the types of products that make good gifts, like toys and clothes.

HOW DID THE RETAIL SECTOR USE TECHNOLOGY TO TACKLE CHALLENGES BROUGHT BY COVID-19?

The biggest challenge for many retailers was the shift to a primarily ecommerce platform, particularly during the initial lockdown period. Thankfully, for the second lockdown many of these retailers are already set-up with an existing online shop as so are still in a good position to capitalise on the widespread shift to buying online. Unfortunately, those with an underdeveloped or still without an ecommerce platform are likely going to have a hard month (at least) ahead of them.

For these retailers, taking the first leap into ecommerce can be made much simpler when they use a modular and configurable online system. These systems help retailers to build an online selling platform that can securely take payments. With single propositions offering everything from real-time reporting to managed security services to checkout customisation, merchants can start selling their products online in the blink of the eye. Crucially for businesses concerned with digital transformation, these selling platforms are simple and easy to use, with no need to multiply back-end costs, complexity or admin. Many retailers have been able to jump into ecommerce with a minimum of expense, time or complication and instantly begin accepting many new payment options as well.

These online selling platforms have been crucial for the retail sector so far and will continue to be a massive support when this new lockdown ends. The advantage of an ecommerce store is that it does not need to replace the brick-and-mortar store. Merchants can offer an omnichannel experience to customers that supports their new behaviours in a coronavirus world. Buy online, pick up in-store (BOPIS) and other offline/online hybrid shopping experiences could become more widespread.

For the retail industry struggling under COVID-19 and the new lockdown, online selling and payment platforms have the flexibility to offer outstanding support. Setting up an ecommerce platform that can offer multiple forms of payment is convenient for customers and it won’t feel like a temporary or wasted effort when lockdown eases up as ecommerce has the ability to support, not replace, the retail store.