02 Jun 2020 • Retail
Could the post-lockdown economy boost the local high street?
With major economies slowly lifting restrictions on which industries can open stores, analysts are starting to get some hard data on how consumer behaviour has evolved over the intervening months. Early indications are that it’s good news for independents, but there’s little to comfort already embattled shopping mall and department store operators.
Firstly, for those shop owners who have weathered the past months, the high street may start to look busier than expected. In the UK over 30 per cent of consumers are planning to spend more locally post-lockdown according to research by GlobalData. An IBM study showed a similar intention in the US, with 25 per cent of respondents indicating they are now shopping more often at locally owned stores and buying more products made, grown or sourced locally.
‘Although independent retailers selling non-essential goods will struggle to get back on their feet following the lockdown period, dealing with stock issues and the cost of implementing safety measures, they will be favoured by shoppers,’ says Sofie Willmott, lead retail analyst at GlobalData. ‘Consumers are likely to feel more of an allegiance to small independents where they may have built a relationship with the staff and will assume large retailers will be able to cope with the drop in sales.’
James Child, head of research at real-estate intelligence agency Estate Gazette, concurs: ‘Customers are loyal to businesses and stores as they are to brands. Tapping into this has always been paramount to success, the current conditions have allowed these retailers to showcase their offer,’ he told Business Matters. And while they won’t have the resources to redesign premises and implement new low-touch technologies, he thinks their relative scale and simplicity could work in their favour. ‘Consumers may feel safer visiting small shops where it could be easier to control numbers and maintain distance between customers in a way that large stores may struggle to do. For example, the one-way systems that many supermarkets have adopted would be difficult to replicate in a department store.’
The data bears this out, with a survey by First Insight indicating that malls and department stores – with a reliance on crowds and complex layouts – placed dead last for perceived safety amongst consumers. Indeed, another study, this time by management consultants McKinsey, showed that US consumers now have a greater negative net intent to go the mall than even for booking an international vacation. Add in a tenancy mix that relies heavily on the same spectrum of major brands, and there’s little to attract today’s purpose-driven, proximity-adverse shopper.
Read our series on how the COVID-19 crisis could impact retail design here.