Consumer behaviour - changed forever or a blip?

There is a huge amount of speculation at the moment on whether some of the consumer behaviours we are seeing now will stick forever or revert to pre-pandemic patterns once the crisis is over. An associated question is how many non-food retailers will still exist by this point and what changes will the survivors have made to stay afloat.

Of course, nobody really knows the answer to the first question - it is great for speculation, impossible to actually predict. The answer is probably some and some - some behaviour sticks, some reverts. Some customer segments / demographics will probably live in semi-lockdown for years, others will embrace the opportunity to re-engage with other humans as soon as possible. 

A new segmentation model will be required for retailers to understand and exploit this change. The same with channel shift - online has accelerated five years in as many months and until it is actually a pleasant experience to go shopping, this is likely to stick. The good news is that if you are committed enough to brave a visit to a store, you will definitely buy - conversion and basket sizes are demonstrating that.

On the subject of survival, we should definitely expect the weak to fail and the strong to get stronger. Those with a relevant customer proposition, effective channels and a well structured balance sheet are well placed to take market share and be much stronger in a couple of years time. The 'muddle in the middle' in apparel will shake out and more mid-market brands will fail or be acquired. Multi-brand consolidators will continue to grow. But what can retail leaders do to harness the opportunity that comes from adversity?

Many forward thinking leaders have taken the opportunity presented by the unprecedented changes over the last few months to completely reconsider the way their business works. This goes beyond making some difficult decisions on store closures and head office cuts, it the emergence of a new retail model. This harnesses the power of data intelligence and utilises the full range of resources available internally and externally to create a operating model that is more efficient, customer centric and agile. Never before has there been such a bow wave of 'zero based' organisational redesigns. While it is important to avoid over intellectualising or overcomplicating this, it is highly likely that the winners in the medium term will operate in a fundamentally different way to pre-pandemic. Carpe diem!