Russia (bbabo.net) - After a long period of restrictions due to the coronavirus, Russians are gradually returning to stores - for groceries, clothes and shoes, and even for household appliances. Now consumers go to stores, more likely for emotion, but make a choice of goods and buy more and more on the Internet, experts say.
If in October 2020, after the lockdown, 41% of Russian consumers preferred to go to traditional stores, in March 2021 there were already 42%. For example, 26% of consumers use offline stores to buy groceries (last year - 21%), 17% - to buy clothes, shoes, accessories (last year - 12%), 16% - household goods (last year - 11%), 15% - household appliances for home (in 2020 - 10%). This data is provided by PricewaterhouseCoopers (PwC) in its research.
This, however, does not mean that customers are leaving online sales channels. The Russian e-commerce market is growing at double digits, in part due to restrictions, in part due to the measures taken by the largest retailers in the online segment in response to the pandemic, according to PwC. At the end of 2019, the e-commerce market in Russia amounted to 2.032 trillion rubles, in 2020 - 3.22 billion rubles, and at the end of the first quarter of 2021 - already 3.745 trillion rubles.
Among the categories of purchases, products are expected to prevail. But during the pandemic, the popularity of the category of goods for home and renovation also increased, and even after the restrictions were lifted, spending on these goods did not decrease - due to the fact that some of the employees remained at remote work. They also began to spend more in 2021 on health and beauty products, takeout food, clothes, shoes and accessories, which is understandable after some Russians returned to their offices.
Price remains the determining factor for a purchase - more than 70% pay attention to it. More and more Russians are trying to save money: more than 30% of consumers have switched to goods of a lower price category. However, in addition to the price, the quality of goods is becoming more and more important for buyers of offline stores. If you have already made it to the store, they will check the goods thoroughly, touch and smell. At the same time, consumers are ready to buy environmentally friendly goods, provided that they are cheaper. Moreover, the older generation pay more attention to the traceability and transparency of the origin of goods, especially food. And the younger generation often tries to follow the principles of environmental safety.
“High inflation, coupled with a slowdown in labor market activity, has led to a drop in demand. However, consumers and retailers are beginning to look beyond the pandemic. In part, we will return to the usual way of life, but a number of trends that have emerged and intensified over the past year will continue in the long term. Today, issues of price, quality, ESG factors are coming to the fore, not to mention how consumer behavior is evolving in the online segment, "says partner, PwC Retail and Consumer Advisory Leader in Russia Martine Paters.
The general director of INFOLine agency Ivan Fedyakov admits that after the lockdown there is definitely an influx of buyers to offline stores, but so far the traffic has not recovered to the pre-pandemic level. For example, the estimate for public catering is minus 10%. Moreover, the revenue returned to the pre-pandemic level - due to inflation. In such cases, financiers have a suitable term "dead cat bounce" - a short-term recovery in the price of a falling asset, the expert compares. In this case, a rebound could not fail to occur, because we went to stores for many decades, it will not be possible to stop going there at once. Nevertheless, the transformation of consumers towards online is obvious and intensified during the pandemic, the expert points out.
"Last year, e-comm in Russia grew by 44%. And this was a record for the last 10 years. Then it seemed that this year the market will calm down - the base was too high. However, in 2021 the e-comm market will repeat this record and, perhaps, it will surpass it, "says Fedyakov. His estimate of the growth of the e-commerce market by the end of the year is another plus 45%.However, Ivan Fedyakov believes that it is impossible to oppose offline stores to online trading: one does not interfere with the other, the retailer should have an omnichannel strategy - it is necessary to develop both offline and online. It was clear even before the pandemic, but this trend intensified during the pandemic. This is confirmed, for example, by the fact that the leaders of online trading Ozon and Wildberries have a huge infrastructure of offline points, which account for 90% of sales. If they didn’t have points of issue of orders, their sales would definitely be lower, says Fedyakov. And, for example, "M.Video", which are associated with offline stores, are among the top online sellers. Consumers need both those and other stores, the expert is sure. It is absolutely normal to combine formats: if a person does not want to go to hypermarkets for groceries, this does not mean that he will not go to the store near his home for bread after returning from work. There are products that are convenient to buy online. But offline has its advantages: you don't have to wait in the store, you can choose and get advice. At the same time, the Internet is definitely becoming the main platform for obtaining information - up to 70% of buyers use the Internet before making a purchase. That is, they will first select a product on the Internet, and only then they can purposefully go after it to a physical store, the function of which is increasingly shifting towards receiving emotions, the expert believes.
Ivan Fedyakov notes that even with this record growth, the share of online trade in our country at the end of the year will be only about 12-13%, and 85% of goods are still bought in regular stores. Last year, the domestic online trading market amounted to 2.5 trillion rubles, cross-border trade added almost 400 billion rubles more. This year, the e-comm market, together with cross-border trade, will exceed 4 trillion rubles. Moreover, the entire retail turnover by the end of 2021 will amount to 35-36 trillion rubles.
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