Managing Director & Senior Partner; Global Leader, Retail Sector
Consumers fundamentally shifted the way they spent money and time during the pandemic. While retailers continue to look for a fast recovery due to pent-up demand, additional stimulus checks, and accelerating vaccination rates, some shifts in the retail landscape will take years to normalize. Other shifts, however, are here to stay.
Though India and Brazil continue to struggle with soaring COVID-19 infections, most other regions around the globe are experiencing a broad decline in infection rates and easing lockdown measures. Many governments are considering, or are currently providing, additional economic stimulus money to restart growth. Perhaps most important, multiple COVID-19 vaccines have now been shown to be effective and are being distributed at an increasing rate.
In the meantime, consumers are likely to continue prioritizing certain retail categories, such as grocery and home improvement. Some categories, depressed by the pandemic, will experience a short-term surge due to pent-up demand. Other categories, such as apparel and accessories, will take much longer to fully recover.
As we highlighted last November, five important consumer trends have come out of the pandemic. These trends will continue to affect retail for the next three to five years:
Retailers can respond to these trends by doubling down on the use of data analytics to understand how their customers’ needs are changing and by modifying their operations to address those evolving needs. We recommend that they focus on distinctive value propositions, safe in-store experiences, and improved e-commerce offerings. At the same time, they should continue to manage costs as closely as ever, understanding that a postpandemic return to normalcy may be both startlingly different and some time in coming.
Our perspectives are detailed further in the slideshow below.