The impact of COVID-19 has developed a two-speed retail environment in New Zealand, as some categories experience record sales, while other retailers appear increasingly pessimistic about their prospects. In this report PwC analyses data from a range of sources to paint a picture of the trading environment in the wake of COVID-19, and considers what developments in consumer sentiment may tell us about what lies ahead for the retail sector.

Recommendations

Consumer spending: To adjust to recent changes in consumer behaviour and spending, companies should:

• understand what shoppers really value to determine the minimum viable basket — the ‘anchor’ products or services that must be available at all times and prioritised through the supply chain

Safety concerns: To be responsive to safety concerns and at-home interests, businesses should:

• have adequate stocks and provide their employees (if necessary, e.g. following Government advice or a change in Alert Level) appropriate personal protective equipment

Multi-channel convergence: The pandemic has clearly highlighted the benefits of mobile shopping – its ease, portability and immediacy. However, the overarching trend will be towards a multichannel experience, with consumer-facing companies needing to seamlessly integrate their offline and online experiences. As tools such as digital sizing in fashion, virtual shoppers, consumer collaboration platforms and augmented reality are introduced and begin to converge, companies should:

• invest in data and customer relationship management technology to drive frictionless commerce and engagement, including more sophisticated customer segmentation and loyalty programs

Healthy living: In order to improve customer wellbeing and foster a culture of innovation, companies can:

• invest in the talent, research capabilities and digital tools to address consumer concerns