A look at the week that was

The UK is edging back to normality. As retail re-opens in England and Wales (with dates set for Northern Ireland and Scotland), there is a real feeling of relief in the air, not least amongst those lucky enough to bag an early haircut slot.

Whether you were reunited with your barber or braved Monday’s bitter cold to venture into the local beer garden, the changes in consumer confidence and shopping behaviour this week have been monumental. Although we’re still only a few days into retail’s re-opening, we’ve taken a look at the very early figures to gauge how customers are reacting to the return of the high street and what implications store reopening may have on online performance.

Market trends

As expected, early data shows that consumers are largely eager to return to pre-Covid behaviours, a trend that promises a visible road to recovery. Much of this enthusiasm can be put down to vaccine confidence; 45-50 year-olds got their first jabs this week, coinciding with good weather and a hopeful summer outlook.

The novelty of returning to in-person shopping that doesn’t involve your weekly food shop has, as predicted, resulted in increased spending as customers release the pent-up ‘revenge spending’ brought about by months in lockdown. Comparisons with 2020 store performance don’t give much useful insight but comparing the start of this week to the same period in 2019 highlights some positive signs: overall, footfall was down just 16% on 2019, with shopping centres worst-affected at -26%. Retail parks, conversely, witnessed a bounce of +7% on 2019. Store-dominant customers have voted with their feet and demonstrated that face masks and hand sanitiser requirements don’t put off the determined shopper.

And what about London? Always the worst-affected region for retail during lockdown, footfall in Central London to Wednesday was down -56% compared to 2019, a big improvement on the -80% drop earlier this year. Smaller cities and market towns continue to have higher footfall at -27% and -7% respectively, largely driven by continued home working and a hesitancy to use public transport. We’ll monitor these figures closely in the coming weeks to see whether they change – or whether online traffic will continue to fill the gap.

Online growth continues (with some variances)

92% of UK shoppers surveyed by McKinsey intend to keep shopping online, despite restrictions easing. This finding was reflected in recent figures for online growth, though it has been noticeably slower than last year. Beauty, food and drink, and home and garden brands saw a small uplift last week after months of strong growth. This slowing may be due to customers being distracted by the prospect of returning to restaurants and pubs to see family and friends. Garden centres and homewear brands may also be experiencing a lull as customer opt to return to their large physical store portfolio as lockdown eases. We’ll know more after this weekend.

The strong resurgence seen by clothing and footwear sectors slowed from triple-figure growth in March to +25% last week, again likely due to customers waiting to buy in-store. Queues snaked outside Primark, Zara, and H&M as customers returned to high streets in towns and cities across England and Wales to get an in-person taste of the new season collections, buoyed by the possibility of international travel later this year.

Overall, we can see the impact of the pandemic-fuelled online migration and the uplift remains incremental across demographics and cohorts. We will continue to monitor channel shift closely over the coming weeks as more store data comes in and customers get used to the softer restrictions.

What actions should brands focus on right now?

While online growth may be slowing, digital channels aren’t going anywhere. Paid Social CPMs have been increasingly consistently Lockdown 1 and – with the exception of the Christmas period – last week saw them reach their highest peak since the start of 2020.

Impending IOS14 privacy changes mean that Facebook will no longer track every purchase made. Whilst the scale of overall impacts is currently unknown, there are some steps you can take now that will manage risks and optimise performance in the future.

We recommend that brands install a conversions API. This will have the double benefit of compensating for IOS14 impacts and also combating limitations on cookies and in-browser data retention. Furthermore, getting the API set up correctly ensures you can send as much data as possible to Facebook to support of the pre-existing Facebook pixel and enhance optimisation and targeting.

We expect the IOS14 roll-out to take place sometime this month so getting the API in place sooner rather than later will give you an unfair advantage across your Paid Social activity. If you’re unsure how effective your current pixel set-up is, drop us a line at hello@more2.com and our expert digital team can help.

It’s been an interesting week (and year!) for retail brands but the return of physical stores, coupled with continued strong online performance, gives reason for optimism and a promising road to recovery.

Thanks for reading!

Jonny