RETAIL FORECASTS REPORT 2021 | BDO LLP
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RETAIL IN THE AGE OF COVID-19 CONTINUED
COMPETITIVE CONSOLIDATION AND EMERGENCE OF NEWDIGITAL MULTICHANNEL RETAILERS &MODELS
Many retailers, and especially those with large store portfolios and considerable exposure to underperforming categories and locations, are facing uncertain prospects. There are clear signs of market consolidation in retail, amid the struggles of many traditional high street stalwarts, and the rapid growth of online pureplay giants, such as Amazon. As well as encouraging retailers without Amazon’s scale advantages to focus on diversification and improving service- led elements, the shift of spend to online has served to lower the barriers to entry for start-up retailers, with less upfront investment required. Linked to this has been the emergence of new and innovative operating models, such as subscription and resale platforms, with lockdown restrictions and empty shelves in stores encouraging consumers to turn to sign-up for regular deliveries for everything from toys to alcohol. KEY SECTORS IMPACTED AND EXAMPLES Fashion – While the whole sector has been impacted by the reduction in spending on apparel during the pandemic, dozens of digital and subscription-based operators remain. Examples include Lacies, Empress Mimi and Oddballs, which provide subscription underwear, Cocoon Club, which offers bags, Lookiero, which offers a personal shopper to curate outfits and Curated thrift, which offers curated selections of secondhand products. Health & Beauty – As with fashion, Health & Beauty subscriptions have remained popular even as the sector has come under pressure from the pandemic crisis. Birchbox, one of the oldest and most popular, curates products using customer responses to a survey on signup. Prices start from £12.95 a month and it continues to raise its profile through collaborations with fashion labels and social media influencers
Electricals – Gadget Discovery Club is aiming to enter a notoriously competitive sector with thin margins through an innovative subscription model. The club delivers one ‘surprise’ gadget a month, with prices starting from £17.99 per month for a twelve-month commitment. Grocery – Subscription box service Gousto reported a tripling of website traffic in the first month of lockdown and had to temporarily stop accepting new customers. With a much narrower focus, ‘Milk & More’, the revamped iteration of the local milkman, regularly delivers dairy essentials in recyclable glass bottles, while Nakedwines offers the convenience of both delivery and having wines pre-selected by experts. Pubs, butchers, farms and other small, local businesses have also looked to go direct to consumers, offering takeaway meals and food boxes.
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