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Digital strategies and synergies continue to rise in importance as businesses physically reopen

Published:  13 May, 2021

Online services continue to grow in importance, key sources have highlighted this week, as online retail sales continue to strengthen despite physical stores reopening, and as digital strategies and e-booking becomes more important than ever for bars and restaurants re-launching to demob-happy crowds.

The on-trade is finally allowed to open indoors across England, Wales and Scotland on Monday 17 May, ending months of hospitality lockdown, alongside the ramping up of what was previously deemed non-essential retail.

It is interesting therefore, to note the findings of two key sources which predict how digital strategies and sales will continue to grow in importance over the coming weeks. The first, from IMRG and Capgemini’s Online Retail Index, shows that online retail showed positive growth in April, with sales rising +10.2% YOY despite the easing of lockdown.

“This month’s +10% increase on 2020 is particularly impressive when considering last April’s +44% year-on-year growth,” said Lucy Gibbs, managing consultant for Retail Insight at Capgemini. “It has been over a year since the first UK lockdown, therefore growth online on top of this is significant.

A separate report from KAM Media and Zonal shows that the digitalisation of the customer journey is also accelerating for bars and restaurants as sector prepares for indoor reopening.

The report, focused on the post-pandemic customer, shows that customers are now more reliant than ever on digital services such as online bookings and discovering where to eat and drink out.

This has become particularly relevant this year as customers have become reliant on online booking services and also social media in order to find reservations in limited-capacity, socially distanced venues.

Alison Vasey, group product director at Zonal, said: “Having accepted the need for technology over the past 12 months, consumers now have a greater understanding of how it improves their experience and helps remove some of their typical frustrations when eating and drinking out. From an operators’ perspective this can only be positive, as maximising the power of tech helps free up staff to concentrate on those elements that help enhance the overall guest experience.”

According to the research, customers now search digitally when deciding which venue to visit, with most people doing a ‘general internet search’ (38%) followed by the use of Google’s ‘Near Me’ search tool (25%) and then using hospitality review websites/apps such as TripAdvisor (22%.)

This represents a “huge opportunity” for operators to either influence potential customers, or risk losing them during the critical ‘research’ stage.

Social media plays a considerable role too, but with significant generational swings. Gen Z and Millennials in particular are heavily reliant on Instagram, Facebook and TikTok for ideas and inspiration on which venues to visit. Operators therefore need to ensure they are targeting the right channels which fit with their strategy and customer base, and avoid a ‘one-size-fits-all’ approach.

For retailers, online synergies are equally important, IMRG and Capgemini say.

Andy Mulcahy, strategy and insight director at IMRG, explains that despite a major reopening of the high street in April, many large retailers saw some of their strongest sales ever last month across online and retail platforms.

“One even recorded their biggest day ever overall. While online growth might have dropped away from +70-80% between January and March to +10% in April, this is largely as growth rates are now comparing with pandemic-period rates from 2020, which were so strong that it is hard to build upon that performance,” Mulcahy said.

On the rise of digital ordering in the on-trade (42% of consumers say a venue that offers mobile phone ordering and payment became more important to them over the last 12 months), Blake Gladman, strategy and insights director at KAM Media said: “Whether customers use digital ordering options will depend on the occasion, how much time they have and who they are with – so it’s not a case of one or the other, otherwise we risk alienating them – and in some instances it could be the same customer from one day to the next. The research showed, for example, that those dining with kids were more likely to want the option of ordering digitally. It offers them a quick, hassle free option.”

Findings from KAM Media and Zonal were taken from a nationally representative sample of 1,000 UK adults online in April 2021.

The IMRG Capgemini Online Retail Index tracks the online sales performance of over 200 retailers from a variety of sectors, including grocery, drinks, clothing and garden.