A CHANGING LANDSCAPE
THEINSIDE TRACK ON THE CHANGING DIGITAL LANDSCAPE
The Covid 19 pandemic changed the way customers shop with digital sales channels taking on a huge importance. However, NBG had a hunch that this trade was proving especially resilient in the aftermath of Covid in terms of its customers and their return to physical trade counters. So, they commissioned research company Insider Trends to investigate.
J
ack Stratten, Head of Trends at retail futures agency Insider Trends, took the NBG Supplier Summit through the research and its surprisingly positive
findings.
For starters, he said that 92% of all trade sales in the UK are through physical channels, which means that only 8% of sales are digital. “Compared to every single other sector in the UK, that is higher by quite some distance,” he said, explaining that the independent trade sector is the one that has seen the most powerful return to physical sales. “That is a really positive message. Physical channels are incredibly resilient.”
Stratten reported that footfall in UK shops increased from July 2022 versus July 2021 by 28% and that 80% of global shoppers post- pandemic say they shop in stores when they want to buy something immediately. “Why do people buy stuff online?” he asked. “Normally they say for convenience, for speed and because they want something immediately. That’s the one thing that we’ve always said about digital over physical shopping, that the former is faster and more convenient. But the vast majority of shoppers around the globe are saying ‘no, in many instances it’s much easier to go to a physical store or a trade counter.’ That is really important in this long-term battle between online and offline.”
In 2021, as the world emerged from the pandemic, ecommerce sales increased globally, but online-only brands increased by only 8%, compared with multi-channel brands – those with stores as well as online – which were up 36%. Stratten said that this shows that even in the digital world, there is a massive advantage to still having physical spaces. “The future of retail, the future of buying is about stores as well as online. That’s inarguable. In every sector I work in, this is true,” he said.
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Unsurprisingly, the Insider Trends survey of tradespeople found 61.5% were buying more online during the pandemic, though 3.5% said they bought more in person, with 20% reporting no changes in their buying activity throughout Covid-19.
“Of the NBG Partners that we spoke to, most had a basic website offering when Covid-19 hit. Some were in the process of building digital capability and had to fast track those projects. As such, the high-volume shift to digital sales was a significant operational challenge,” Stratten reported. “Even those with more established digital set-ups reported that pre-pandemic online sales were 1-5% of their business, which is nothing like the volume experienced during Covid-19. One NBG Partner saw online sales go from £4,000 a month in March 2020 to £100,000 in April 2020.”
One surprising thing that the research revealed – which Stratten said is backed up by research from elsewhere in the retail world – is that in- store purchasing came back strongly after Covid restrictions were lifted.
“Online sales have dramatically dropped off among trade customers, while retail/DIY customers account for the majority of digital sales,” he said. That being so, the survey also showed that 60.5% of trade respondents said they now shop both online and in-store for materials and tools. “22% said they shop only in-store and 17.5% said they only shop online. This suggests that less than 25% of tradespeople exclusively shop in person for materials and tools. They also aren’t buying everything from a single retailer. This makes sense given the nature of the trade
industry.The average tradesperson may move between different locations and job types in the course of their daily work. The materials and tools they use may change depending on the day’s jobs. There may be times when they want to buy very small quantities of materials quickly
to get a job finished or they may need to place a much larger order.
“Some goods will need to be delivered and some they can collect. All of these factors and more will influence where they choose to buy. Restricting themselves to a single merchant will rarely be the most convenient option.” One thing to consider, Stratten pointed out, was that many independent merchants reported an uptick in sales during the pandemic because national chains were closed. “It was never realistic to expect that all of this volume would be retained once in-store purchasing and the nationals returned,” he said.
One of the questions the survey asked was about multi-retailer purchasing activity (participants
could choose multiple responses): • 65% said they use B&Q/TradePoint, • 58.5% said they use Screwfix, • 41.5% said they use Toolstation, • 39% said they use Amazon, • 38% said they use Wickes, • 28.5% said they use Homebase,
January 2023
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