Okay, so let's begin with section one and look at how COVID-19 has transformed, the retailing environment. And let's first start with changes that we've observed in shopping behaviors due to COVID-19. And this is important by the way, not just for right now or whenever when we're thinking about what these changes are. But these changes should have Long-term effects on behavior going forward. Because once everybody has lived through a year of these changes due to COVID-19. New habits are formed. You can't undo the year of COVID-19. And so it's very important to look at what were the changes that happened. During COVID 19, in shopping behaviors. Secondly, we'll talk about not only those changes that happen, but what we predict will be enduring trends for shopping behavior for many years to come. And finally, I will present a framework, for how retailers can win, in this world of change shopping behavior. So, let's start with the changes in shopping behaviour due to COVID-19. And let me even start before COVID 19. Let me start in 2017, which was dubbed the year of the Retail Apocalypse. And I want to start there. Because it's an interesting year. But also it's an interesting year for me personally. I wrote a book or started writing a book in 2017. Which I published in 2018 and I called it the shopping revolution. And the reason I started writing this book, is because in 2017, more than 8600 stores closed. It was the worst year on record, and many people were saying this is the end of physical retailing. All these stores are closing. Physical retailing is dead. And the reason I wrote this book is because I did not believe physical retailing is dead. I was sure that physical retailing would be here to stay. But I did believe, bad retailing was dead. And so the purpose of this book, was to develop a framework which I thought would help retailers understand what the winners were doing. The source that we're staying open comps and focus on that. I didn't actually want to focus on what the losers were doing because what I focus on that. So the purpose of the book was to look at these winning strategies, and to put out a framework. And that book was published in 2018. Now. I never predicted 2020 when COVID happened, and it's so naive to look back at 2017, which is the year of the Retail Apocalypse. Only only 8600 stores closed, because during the first few months of 2020 in the beginning of COVID, when stores were required to be closed. Unless they were essential retailing, we saw 250,000 stores closed during COVID-19. Now, during the year, some stores were allowed to reopen under certain circumstances with certain restrictions. But, by the end of the year 2020. 12,000 stores had shuttered for good. That was enough of a change that I updated my book. And you can see here, I have the updated and expanded version of the shopping revolution which is, coming out in early 2021. But, the reason I'm bringing this up is because the fundamental principles, that I proposed in the first version of this book did not change. In fact, some people talked about me as a futurist because I kind of predicted the things that we're going to happen and be accelerated in COVID-19. Now, whether or not I'm a futurist is immaterial. But what is important, is the smarter retailers saw these trends before they became critical Issues in COVID-19. And what I believe in most other retailer retailing analysts also believe is that these trends were happening before COVID-19. And COVID-19 just accelerated these trends. So things that we thought were going to take three to five years to change in shopping behavior, happened in three months. Now, this acceleration had profound impact on retailing. But the key point to take away from here is that these are not new things. We knew that this was happening just happened much faster. Okay. So, let's look at some of the changes in shopping patterns that were unique to COVID-19. The first thing was, and I'm sure everybody knows this, if you survived COVID-19, is that consumers were much more likely to buy online than in the past. We had predicted this move to more shopping behavior online, more e- commerce behavior. This had been predicted before COVID, but what COVID did was really accelerate this, and that's just obvious if you have to stay at home and most stores are closed. If you don't buy online, you're not going to be able to get essential purchases. So you saw people who used to buy online, buy more, you saw people who never bought online start to buy online. And there was absolutely more behavior of digital shopping than ever before. Now, what we predict is because of the unique situations of COVID, You saw these numbers just rock it up. They were very, very hot when behavior settles down. We'll see more people going back into stores when they're able to do that. And I'm going to talk about that in more detail in a minute. But, what we do predict is that even when COVID is over and all the restrictions are done, we will still see at least a 10 higher inclination to purchase online than in the past when all of COVID effects are different. In fact, what we're predicting is e-commerce behavior will be up to our digital shopping will be as much as 25 to 40% of overall shopping, which is much higher than we predicted before COVID as a result of this acceleration in behavior. The other thing that we're starting to see because of these health and wellness restrictions is that payment processes are moving to more frictionless methods. Now when I talk later on about shopping in China, you'll see that china has been way ahead of us on this, but the US. And other parts around the world that are not China have been dragging their feet on this move to frictionless payment. Some of the requirements due to COVID and the safety restrictions are accelerating this move to more frictionless payment as well. The other thing is consumers have different expectations with regard to what physical retail should look like. Because you're worried about these issues due to COVID catching the virus and safety issues, health issues. You now expect retailers to exercise good hygiene practice. You expect people to wear masks, you expect to see hand sanitizers accessible. There's a lot of social distancing rules, gloves for employees, disinfection, all these kinds of things which are moving the in-store physical retailing from a high touch environment in some cases to what's known as a low touch environment. So that has been a very big difference in shopping behavior due to COVID-19. And you also are seeing these work from home patterns. Many more people were required to work from home and that has had, really big impact on the retailing scene. It not only affects where people buy, but affects what they buy, for the work from home trend, which was very extreme during COVID-19. And people are predicting long term effects of that going forward into the future for many, years really has a profound effect on retailing as well. So these are some of the real discreet changes we saw in shopping patterns unique to COVID-19. So, a survey was conducted in December 2020 to predict, what people thought their shopping behavior would be in the future. Now, recognise when the survey was taken December 2020, which is at the end of their COVID year. So now you've been, changing your shopping behavior as a function of COVID restrictions and you're trying to predict what you think, your behavior will be in the future. And the first question we asked was, do you believe you will shop in physical locations more less or, the same compared to 2020. Now, this data is going to be a little difficult to interpret because there's a couple effects going on. What we knew in December 2020 is that we had the vaccine. What we didn't know was how fast we'd be able to get people vaccinated. So if you look at this data, 44%, almost half of the people said. My shopping behavior during the year of COVID is going to be the same In the future. We don't know if those people are saying that because they don't think 2021 is going to be that different from 2020 because it's going to take a very long time to vaccinate people and therefore they're going to exercise the same behaviors or, If what they started doing in 2020, they liked so much, they're going to continue to do that. That's kind of what we were tryna get at. But you can't really uncouple this data because of when it was taken. But so that's not as interesting as what the other people predicted. Who did think, that COVID 2020 was a different year. They experienced different types of shopping behavior. And now as a result of those change in habits, what are they predicting is going to be their behavior in the future. Of this other half that predicted some difference. About half of them said, they would be shopping in physical stores more in the future than in the past. Now, what does that mean? It means during COVID-19, their shopping more online because of the restrictions. But as soon as they don't have to do that anymore. When they're not afraid of some of the health concerns, they are hungering to go back into the stores. That's very interesting. Some people, 16% in this survey said as a result of my experiencing more online shopping. I intend to go into physical stores even less, because I liked shopping. Other people said, well, I don't know. It depends. Who knows? Things like that. So that's kind of what this data are indicating. Now, in that same survey, we ask another question. We said, how has your behavior during COVID-19 influenced your habits? And 40% of respondents said which we would have expected that they visited physical locations much less frequently during COVID than before COVID. And that's not really a surprise. We know that there was really big differences in shopping behavior as a result of the restrictions during COVID-19. But the next question now we asked, was. If you could and now we're tryna uncouple some of the confusion that we had in that first chart that I showed you. If you could shop in person. Would you prefer to shop in person or would you prefer to shop online? And almost half of the respondents said, given a choice I would prefer to shop in person. So this is really important. This says, even though we've now trained people to shop online and they see how easy it is and they see the convenience of shopping online. Almost half of the people said, but I still want to go into physical stores. Now, why do they want to go into physical stores? About a Third of them say they just like the shopping experience better in physical stores than online. Another little bit less than Third. I like to touch and feel the products, before I do that. And another approximately, Third say I like the immediacy of going to the store. I go there, I buy it, I have it in my hand. So those are some of the reasons people prefer to shop in person than online, even once you've experienced and been forced to experience the convenience of online shopping.
