2020 KEY TRENDS

RESEARCH: BARCLAYCARD

THE FIVE TRENDS THAT DEFINED 2020

BARCLAYCARD HIGHLIGHTS THE FIVE KEY TRENDS THAT DEFINED 2020, A YEAR LIKE NO OTHER, ANDDISCUSSES THE POTENTIAL IMPACTS OF THE GROWTH OF THE ‘INSPERIENCE ECONOMY’.

It will come as little surprise to learn that consumer spending declined in 2020, a year that will live long in the memory for all the wrong reasons thanks to coronavirus. Yet this statistic only tells a very small part of the tale as lifestyle changes and rapidly shifting consumer habits led to a reshaped retail sector with growth in many areas, not least in independent retailing.

“Spending on ordering takeaways online surged 49.1% and those offering services such as meal subscriptions grew by 62.4%.”

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items rose by 4.1% YOY in 2020, largely driven by supermarket shopping, which saw an

overall growth of 15.7%, with online grocery shopping surging 70.3% as the demand for delivery services increased. These trends, along with lower prices at the petrol pump, also contributed to a decline in spend on fuel, which dropped by 20.3%.

This growth of what Barclaycard refers to as the ‘insperience economy’ saw digital services, subscriptions and home delivery boom as Brits spent more time at home under Covid-19 restrictions.

To help retailers learn from 2020 and tap into the key shifts, Barclaycard has identified five key trends.

TURBULENT TIME FOR HIGH- STREET RETAILERS AND HOSPITALITY

Spending on non-essential items contracted 11.3%, as social distancing restrictions had a significant impact on high-street retailers and the hospitality sector.

While the ‘Eat Out to Help Out’ initiative provided a boost to restaurants, restrictive measures throughout the year saw overall spending fall 47.0%. Bars and pubs were inevitably also impacted by social distancing restrictions, seeing an overall drop of 36.7%.

STAYING LOCAL

A key positive outcome of 2020 was that support for independent businesses flourished, as many Brits chose to shop locally. Specialist food and drink stores – including convenience stores as well as offlicences, butchers and bakeries – saw an overall uplift of 28.6% YOY. This is supported by Barclaycard’s consumer confidence research, which revealed that over half (57%) of Brits said they wanted to increase their support of nearby businesses as a result of lockdown restrictions.

A trend towards staying local has been seen in travel behaviour too. August and September saw more holidaymakers embark on staycations over trips abroad, with UK hotels, resorts & accommodation seeing their smallest declines since the first national lockdown, at 19.1% and 18.1% respectively – a noticeable improvement on May (-89.8%).

However, overall travel – including airlines and travel agents – declined by 61.1% in August and 63.1% in September.

THE GROWTH OF THE ‘INSPERIENCE ECONOMY’

As consumers spent more time at home this led to a rise in demand for digital entertainment, services and experiences. Boxsets and games consoles increased in popularity with spending on digital subscriptions and electronics seeing growths of 31.5% and 10.8% respectively. Meanwhile, spending on ordering takeaways online surged 49.1% and those offering services such as meal subscriptions grew by 62.4%, as fresh, hassle-free dinner options became a mainstay in many households.

CONSUMER ESCAPISM AND PICK-ME-UPS

Sports & outdoor retailers enjoyed significant growth in 2020, rising 7.2% overall, with the temporary closure of gyms encouraging Brits to purchase workout equipment and seek new ways to exercise inside and outdoors.

Support for florists has also bloomed with purchases up 22.7% as Brits treated themselves and showed friends and family from afar they were missed. Many also took up new hobbies and crafts (9.8% rise) and added new companions to their households, with vets and pets seeing a 10.7% uplift in 2020.

BOOM IN HOME IMPROVEMENTS

Many Brits also took the opportunity to spruce up their indoor and outdoor living spaces. After non-essential shops re-opened in June, spending at home improvement and DIY stores surged, driving an overall growth of 9.8% YOY. Furniture stores also enjoyed an overall uplift of 5.3%, as shoppers invested in big-ticket purchases.

Raheel Ahmed, Barclaycard’s Head of Consumer Products, said: “2020 has accelerated many trends. E-commerce has seen huge growth, working from home has meant many are shopping more locally and experiences within the home, such as virtual workouts have become the norm. Spending within the retail, travel and hospitality sectors has been acutely impacted. However, we have also seen many businesses become more agile and move online.

“Hopefully with a vaccine being rolled out in 2021 we will see green shoots for the most severely impacted sectors. Having said that, some of the trends and changes we’ve seen in customer habits may be here to stay.”