European Retail Briefing: Inc Impact of COVID-19 - September 2020
Analyst Comment: The Impact of COVID-19 on Shopping Behaviour
 
“The ongoing COVID-19 pandemic continues to affect consumer behaviour in different ways across Europe. The importance of wearing a mask or face covering when outside the home appears to vary depending on each government’s rules, while other trends such as the shift to online shopping remain strong everywhere. The feeling of cooperation persists and we have seen retailers continue to innovate to maintain their relevance, sometimes blurring the lines between online and in-store shopping but ultimately diversifying their offering and using technology to increase their engagement with consumers.”
-–   Armando Falcao, European Retail Analyst, 22nd September 2020

Overview
The ongoing COVID-19 pandemic continues to impact the way consumers shop, as well as retailers’ reactions across Europe and the rest of the world. The world is slowly adapting to the new reality of living with the pandemic and each country has its own challenges and a different timeline with reopening and managing infection rates.

In July 2020, we have seen most of the European countries continue on a path to gradual recovery of their retail activity following the easing of the COVID-19 containment rules. Based on the latest data released by Eurostat, total European retail sales decreased by 0.8 % compared with June 2020. The total sales volume is now equal to 98.8% of the volume reached in February 2020, prior to the initial stages of the COVID-19 pandemic. The level of recovery in the Euro area was the same.

Our latest Global COVID-19 Tracker data shows that certain trends and changes in consumer behaviour appear to be stabilising across the leading countries. Each country has a different view on the importance of wearing face coverings when outside of the home and the shift to online shopping remains strong and even accelerated over the past weeks in the countries we cover in this briefing.

We explore what this means in terms of retail sales across this report, and in more detail within the European Retail Sales – Impact of COVID-19 section.

Concerns about risk of infection remain high
Over the past two to three months, the level of concern about being exposed to the new coronavirus has gone down and up again. When looking at the data from our Global COVID-19 Tracker between April and September 2020, there is some fluctuation but the proportion of those worried about exposure has not shown any significant changes. In fact, based on our latest data, the levels appear to be fairly stabilised around 49% in France, 36% in Germany, 51% in Italy and 70% in Spain.

The differences across the leading economies also appear to have remained the same. There is a close alignment between France and Italy in terms of people’s fear of exposure. Germany was one of the countries to first come out of the lockdown period and seems to be experiencing a faster recovery, so it is unsurprising that the level of concern if lower there.

Conversely, the proportion of those afraid of exposure is twice as high in Spain as a direct reflection of how the country is notably less advanced in containing the pandemic and resuming ‘normal’ activities when compared to the others.

FIGURE 1: Those worried about the risk of being exposed to the coronavirus, April-September 2020
 
“How worried are you about the risk of being exposed to the coronavirus?”

Base: ^ 1,000 internet users aged 16+ in each country; ^^ 1,000 internet users aged 16+ in Germany; 500 each in France, Italy and Spain
 
Source: Lightspeed/Mintel

In terms of demographics, the ongoing concern about exposure to the virus continues to increase with age, peaking for those aged 55 or more in France, Germany and Italy. In Spain, it is slightly higher among those aged 45-54 (77%) than those aged 55+ (76%) but this could easily be due to the expected margin of error in our consumer survey.

Interestingly, the widest gap between the youngest and oldest age groups are seen in Germany and Spain, whilst it appears to be more evenly distributed across consumers in France and Italy.

FIGURE 2: Those worried about the risk of being exposed to the coronavirus, by age, 7-15 September 2020
 
“How worried are you about the risk of being exposed to the coronavirus?”

Base: 1,000 internet users aged 16+ in each country
 
Source: Lightspeed/Mintel

Italians and Spaniards are the most in favour of face masks
In the course of the past two to three months, we have also seen a rising number of European countries gradually adhering to the use of face masks under certain circumstances. Whilst some countries such as the UK only recommend wearing a face covering in indoor settings like public transport, shops and supermarkets, in other countries like France and Spain it has become common practice to wear a mask in both indoor and outdoor spaces outside of the home.

Curiously, some countries appear to face considerable resistance when telling people they need to wear a mask or similar face covering when engaging in certain activities. In fact, we have seen public demonstrations against the use of masks in countries like the UK and the US, while consumers in Germany, for instance, seem to adhere to the rules without much hassle.

As recently discussed in a press article by the BBC, Some argue that ubiquitous mask wearing, as a very visual reminder of the dangers of the virus, could actually act as a "behavioural nudge" to you and others for overall better personal hygiene. Also, when dealing with such an unprecedented scenario, there's also the idea that every little bit counts in the war against the virus.

Unsurprisingly, our data shows that the proportion of those who think it’s important to wear a face mask is highest in Spain for the vast majority of activities. However, this was equally high or even slightly higher among Italians for certain activities such as eating out in restaurants indoors, shopping in-store and going to the cinema/theatre.

Similarly, Germans appear to think it’s important to wear a mask in according to their country’s rules, in some cases contrary to the other three countries. In fact, very few Germans think they should wear a face covering in outdoors activities such as walking on the streets and even eating out, as well as when visiting family and friends.

FIGURE 3: Those who think it's important to wear a mask for the following activities, 7-15 September 2020
 
“Do you consider it important to wear face masks/coverings in the following situations?”

Base: 1,000 internet users aged 16+ in each country
 
Source: Lightspeed/Mintel

Spaniards remain the most uncomfortable to resume ‘normal’ activities
We continued to ask consumers about how comfortable they feel to resume certain activities as their countries gradually resume economic activity. As for the concern about exposure to the virus, there has been some fluctuation but the latest data shows similar results to the last briefing.

Spaniards continue to feel the least comfortable to resume the activities listed in the chart further below. Germans appear in line with the Spanish when it comes to taking a flight or going to the cinema but are otherwise more in line with the French among those feeling the least uncomfortable with most of those activities. In fact, German consumers are the least concerned about trying clothing, footwear or handling products in-store.

FIGURE 4: Those claiming to feel uncomfortable doing the following activities, 7-15 September 2020
 
“To what extent would you feel comfortable or uncomfortable doing the following activities?”

Base: 1,000 internet users aged 16+ in each country
 
Source: Lightspeed/Mintel

The shift to online continues to endure
In our last briefing, the latest data from our Global COVID-19 Tracker was showing little change when it comes to consumers trying to spend less time in-store. In fact, this indicator appears to have stabilised between 45% and 50% of consumers for all the leading economies.

FIGURE 5: Those claiming to be trying to limit the time spent in-store, April-September 2020
 
“Since the start of the COVID-19/coronavirus outbreak, which of the following apply to you?”

Base: ^ 1,000 internet users aged 16+ in each country; ^^ 1,000 internet users aged 16+ in Germany; 500 each in France, Italy and Spain
 
Source: Lightspeed/Mintel

However, over the last weeks, the proportion of those admitting to be shopping more online has risen again across all four countries. In Spain, on the second week of September 2020, nearly four in 10 consumers had increased their ecommerce activity. The figure drops to one third among Italians, and to little under three in 10 in France and Germany.

FIGURE 6: Those claiming to have increased the amount of shopping they do online, April-September 2020
 
“Since the start of the COVID-19/coronavirus outbreak, which of the following apply to you?”

Base: ^ 1,000 internet users aged 16+ in each country; ^^ 1,000 internet users aged 16+ in Germany; 500 each in France, Italy and Spain
 
Source: Lightspeed/Mintel

The increase in online shopping remains stronger among younger consumers and this is a trend across all the four countries. The latest tracker data for mid-September, however, shows a slight shift in that trend in Spain and especially in France.

The shift to online shopping appears to be stronger among French consumers aged 25-34 (31%) than for those aged 16-24 (26%). In Spain, both age groups appear on the same level, with one percentage point difference, which could be due to the expected statistical margin of error in the survey. In any case, the proportion of those shopping online more is lowest among those aged 55+ in all countries.

FIGURE 7: Those claiming to have increased the amount of shopping they do online, 7-15 September 2020
 
“Since the start of the COVID-19/coronavirus outbreak, which of the following apply to you?”

Base: 1,000 internet users aged 16+ in each country
 
Source: Lightspeed/Mintel

Opportunities for retailers as a result of COVID-19
In May 2020, sports goods retailer Decathlon announced plans to roll out its Scan & Go mobile self-checkout solution to all its stores across Germany, starting with stores in Berlin, Munich, Cologne, Schwetzingen and Plochingen. Shoppers scan and pay for items using their smartphone, automatically disabling the RFID security tag to leave them free to exit the store, eliminating the need to wait at a checkout. The French retailer has already installed the mobile self-checkout technology at a store in Singapore and an outlet in California.

FIGURE 8: Decathlon’s new Scan & Go mobile checkout solution
  
Source: Decathlon

In an attempt to extend their reach even further, online retail giant Amazon has officially launched in the Netherlands in March 2020. Instead of selling only e-books and e-readers, the online giant now offers more than 100 million items across more than 30 product categories including consumer electronics, fashion, DIY, foodstuff and toys. Amazon will compete with local online players Bol.com, Coolblue and Wehkamp.

Basking on a different trend, Mintel Trend Hungry Planetlooks at how our throwaway culture is becoming a contentious issue. To discourage fashion waste and prevent unwanted clothing ending up in landfill, fashion and lifestyle ecommerce brand Zalando announced the launch of a ‘Pre-Owned’ category on its platform in Germany during the last week of September. Zalando customers will be able to buy curated pre-owned fashion, as well as sell their pre-owned clothing items to the fashion and lifestyle ecommerce company. In June 2020, Swedish online second-hand shop Sellpy, which is majority-owned by fashion group H&M, launched in Germany in a first step outside its home market.

FIGURE 9: Zalando’s new second-hand clothing platform in Germany
  
Source: Zalando

In yet another slightly different direction, other retailers have been supporting locally sourced products and smaller community retailers. Finnish online store Verkkokauppa.com is to open a sister site, Verkkokauppa.fi, in August 2020 that will sell only domestically made Finnish products. The company has seen two trends emerge during the COVID-19 pandemic: firstly that people are searching and buying more products online; and secondly that more consumers are favouring domestic products and brands.

FIGURE 10: Verkkokauppa.com’s new website for domestic products
  
Source: Verkkokauppa

Non-cash payments remain important
Our latest Global COVID-19 Tracker data also shows little variation in the shift away from cash payments when shopping in-store. The figure appears to have stabilised at one third of consumers in France, Germany and Italy, and around 44% of shoppers in Spain.

FIGURE 11: Those claiming to be trying to avoid using cash where possible, April-September 2020
 
“Since the start of the COVID-19/coronavirus outbreak, which of the following apply to you?”

Base: ^ 1,000 internet users aged 16+ in each country; ^^ 1,000 internet users aged 16+ in Germany; 500 each in France, Italy and Spain
 
Source: Lightspeed/Mintel

Similar to what we have seen in our last briefing, older shoppers continue to be among those most likely to avoid paying in cash, especially in France and in Spain. This is also true in Germany and Italy, albeit to a lower extent and covering about half of those aged 55 or more.

FIGURE 12: Those claiming to be trying to avoid using cash where possible, by age group, 7-15 September 2020
 
“Since the start of the COVID-19/coronavirus outbreak, which of the following apply to you?”

Base: 1,000 internet users aged 16+ in Germany; 500 each in France, Italy and Spain
 
Source: Lightspeed/Mintel

In spite of that trend, however, our data continues to show click & collect services to have a rather localised popularity. Whilst the facility is fairly popular in the UK, among the other four leading economies, its use appears to be limited to France.

As a result, promoting click & collect among Spaniards and especially among Germans remains a long shot and likely not to bear as much result as in other European countries. Nevertheless, opportunities remain for those who wish to increase usage of the service in Italy and especially in France, potentially by communicating its advantages in light of a potential second lockdown period this year.

FIGURE 13: Those claiming to be using click-and-collect more often, April-September 2020
 
“Since the start of the COVID-19/coronavirus outbreak, which of the following apply to you?”

Base: ^ 1,000 internet users aged 16+ in each country; ^^ 1,000 internet users aged 16+ in Germany; 500 each in France, Italy and Spain
 
Source: Lightspeed/Mintel