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When COVID is over, will shopping habits go back to normal?

by Cheryl Ingram: Founding Partner at The Digital Media Collective.
Having recently been invited to join a panel session for J.P. Morgan CEEMEA where the topic of discussion was COVID-induced shifts in consumption patterns, it was interesting to note that whilst South Africa might still be some way behind the First World in terms of ecommerce penetration and its contribution to overall retail sales, the COVID related trends across the globe are very similar.

Joining the panel from Russia’s leading marketplace, OZON, was their Chief Financial Officer, Daniil Fedorov, and representing EMEA was Georgina Johanan, Head of the European General Retail team, J.P. Morgan.

Much of the discussion centred around what happens when COVID is over - will shopping habits go back to normal?

Russia, much like South Africa, found themselves in Hard Lockdown at the start of COVID, and in both markets (Russia + South Africa) the leap towards ecommerce was fast and furious. Looking back on the last 10 months, much of the discussion we’ve had with our clients has been aligned with our panel discussion - what happens after COVID - and perhaps the exit from hard lockdown in 2020 gives us some insight into what we can expect.

In South Africa, ecommerce retailers recorded their best year ever in 2020, with growth across the board reflecting double-digit lifts. Of course this was tempered with many Bricks + Mortar retailers facing store closures or worse - exiting the industry altogether. Those with a multi-channel offering were however able to shift revenues online and recoup anywhere between 30-70% of store revenue losses through their online channels. COVID also presented Bricks + Mortar retailers with an opportunity to trim the tree - exiting leases that might have otherwise proved tricky to break.

Of course, the impact of COVID-19 on the consumer cannot be denied. Hard lockdown followed by continued extended restrictions meant that by November 2020, COVID fatigue was at an all time high, and possibly the exuberance around diminished infections and empty hospital beds meant that some consumers returned to malls with a renewed sense of vigour. That said, the dip in online sales was marginal, and certainly the trend we saw towards the end of last year perhaps gives us a strong view on what me might expect in 2021.

And then just when consumers thought it was safe to return to old ways, South Africa was officially hit with the second wave and a mutated COVID strain that hurtled at us harder and faster than what we experienced at the start of the pandemic. So, for now, ecommerce remains at an all-time high fuelled by the fear of the unknown, on-going lockdowns, travel restrictions and retail closures. In fact, Shopify themselves have noted that consumers worldwide are now buying items rarely purchased online before the pandemic, like groceries, health and hygiene and home essentials. Shopify have also highlighted how the pandemic has amplified the consumer’s desire for convenience and immediacy, and the permanency of these shifts will be determined by how satisfied consumers are with online experiences.

With the resurgence of wave 2, we are seeing consumers again feel wary of shopping in store. And as a result, the acceleration of the ecommerce growth we saw in 2020 is expected to maintain it’s momentum in 2021, and certainly our prediction is another good year for the industry.
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