Post-lockdown shopping figures paint interesting picture of changing retail landscape
The impact of the Coronavirus on both consumers and retailers is becoming evident. Retailers are under pressure to reimagine and transform their businesses, build-out e-commerce solutions, and expand their online offerings. Consumers, having already navigated a difficult year, and still uncertain about what the future holds, are likely to spend more conservatively over the next quarter.
South Africa’s largest credit facility, Mobicred, has just released its latest Consumer Spend Index for the last quarter (Q3, 2020). The data reveals some interesting trends as South Africans settle into post-lockdown shopping. While the previous quarter’s figures showed a higher level of e-commerce adoption, this spike was to be expected amid Coronavirus infection fears and consequent limitations on physical shopping during lockdown.
Despite adoption rates levelling off, the data shows an increase of 9% in average transaction size for existing customers and a slightly higher increase of 12% for first time online customers in the last quarter. Averaging out at just over a 10% increase in basket-size per online transaction, online shopping looks set to just keep growing.
Heading towards the end of the year, a slight slowdown on the previous quarter in terms of new retailers being onboarded is evident, which is to be expected as retailers start to refocus on traditional brick and mortar, in the build-up to the festive season.
A comparative view of online shopping trends across industries this quarter, against last quarter, shows that tech is continuing its strong growth trajectory, climbing another 29%. Growing at a similar level, fashion retail was up 27% while beauty and health came back strongly with an upswing of 37% over the period.
Climbing by 10% from last quarter, general retail showed strongly with 36% growth while one of the previous quarter’s star performers, beds, coming in at the same rate. More generally, home and furniture managed to hang on to its gains in the last quarter and upped it by another 40% over the last quarter.
After being hit hard over the last six months, the auto industry has clawed its way back with an impressive upturn of 135%.
As the year draws to a close, retailers are hoping that the annual Black Friday (27 November) and Cyber Monday (30 November) sales days will relieve some of the losses suffered in the middle part of the year. Consumers, having kicked the tyres and taken online shopping for a test-drive during the lockdown period, are almost certainly going to turn to e-commerce before braving shopping centres to take advantage of the deals offered.
Retailers who have taken their lockdown learnings to heart and invested in building out their online platforms to facilitate greater e-commerce trade will certainly have the upper hand by offering a stronger push online.
Along the same lines, Mobicred is preparing for a huge increase in customer applications in the build-up to the end of November and will also be adding additional products to its bouquet of merchants, providing even greater choice to consumers and a seamless transacting experience for merchants.
Already a highlight on the shopping calendar, Black Friday, and Cyber Monday in 2020 will provide consumers who have been hard hit financially due to COVID-19 with an opportunity to purchase products at extremely competitive prices. According to Jason Sive, CEO of Mobicred, “It should be really interesting watching the online retail space over the season. While there will be a massive flight by shoppers to online, the spending power of the average consumer is definitely in question”.
Meanwhile, for retailers who have not managed to effectively convert their sales channels to include online e-commerce offerings, and especially ensured the readiness of their fulfilment partner to deal with the additional capacity needed over this time, the weekend may well represent a watershed moment.