COVID-19 has impacted us in many ways, including the way in which we shop. As e-commerce surges and the landscape continues to shift, will brick and mortar shopping fall by the wayside?
The Future of Shopping
Over the years we have seen a shift from DVD rentals to browsing streaming services like Netflix instead and from book and music stores to the likes of Kindle and iTunes, as well as the growing popularity of online stores like Takealot and Zando in South Africa. Abroad, there has been a notable decline in profit for small businesses, which have suffered an average 30% loss of revenue, while larger conglomerates thrive - Walmart has seen an 80% rise in profit, Amazon a 100% increase, and Facebook, Google and Microsoft stocks are at a record high.
As this notable shift gathers greater momentum during COVID-19, one of the most established shirt manufacturers, who have been given the honour making the popular Madiba Shirt, Lontana Apparel not only ensured business continuity through a streamlined, easy-to-use website, but they also pivoted their business to produce Personal Protection Equipment in the form of high-quality masks - virtually overnight, explains Dylan Rothschild, Managing Partner of Lontana Apparel.
Lontana Apparel has grown from a traditional retailer to having to operate in an industry largely driven by e-commerce as an accelerated trend. “There’s no doubt that consumers’ shopping behaviours have changed,” he says.
“We’ve observed shoppers move from more traditional avenues, such as densely populated malls to shopping at the touch of a button. As many traditional retailers around us have unfortunately had to shut down, Lontana has ensured business continuity through online sales and a diversified range”.
Rothschild notes that these shifts are taking place worldwide. “Canada’s online shopping figures doubled during the pandemic; this has however been a long-time coming”.
New Challenges
While the ease of online shopping certainly has its advantages, traditional shopping remains just as important to many South Africans. Consumers complain that the move to e-commerce doesn’t account for the fact that some retailers only deliver to metropolitan areas, or are forced to add on hefty fees to cover delivery costs.
Other would-be digital consumers are struggling to overcome the initial hurdle – getting online. While the ‘Digital Divide’ is slowly beginning to shrink as more and more South Africans have access to internet-connected devices, crippling data costs and uneven connectivity remain a barrier to entry for many.
Post-COVID-19 however, browsing and shopping have had to evolve to meet unprecedented challenges.
“Retailers have had to spend the last decade adapting to the demands for online shopping. As consumerism grows, so does instant gratification. The easy ‘click of a button’ purchasing keeps people behind their screens and out of brick-and-mortar stores,” he says.
“The COVID-19 pandemic has accelerated e-commerce, as the buying public now must consider government-ordered shutdowns, fear of populated spaces and capacity restrictions. Adding to this is the loss of income that may also have impacted the shopping experience, as people avoid the luxury of browsing and buying for pleasure, and instead stick to the necessities”.
Pressure on SMEs
In addition to these pressing challenges, Rothschild notes traditional brick-and-mortar retail for small to medium-sized retailers is under attack on multiple fronts - not just from e-commerce. “Personnel costs and occupancy costs, rates, water, and electricity have risen at above inflation, and generally at above the rate at which sales have risen for SMME (Small, Medium and Micro Enterprise) retailers. Added to this is a moribund economy which was struggling even before COVID-19.”
Retailers with Strong Bank Balances Will Weather the Storm
Retailers are facing unprecedented challenges, but creative thinking and evolving towards the new landscape is possible, comments Rothschild.
“We see large retailers with strong bottom line balances surviving and soon thriving. As consumers’ bank balances start to stabilise, as will their shopping habits, and those who are set up both online and in-store will benefit most.”