Sponsored How and where we shop, and how we pay for what we buy, is changing fast and the speed of this change has accelerated during COVID-19. Online shopping and cashless payments have soared in recent months. According to data from payments company Square UK there was a 15-fold increase at the height of the pandemic in so-called card-not-present payments – where a cardholder does not physically present their card to the merchant – up from just two per cent in January to 33 per cent in April.
Shoppers are returning to the high street and retail sales are now on the up: in July UK retail sales rose above pre-pandemic levels, according to the ONS. However, the way we now choose to shop is probably different from our pre-COVID choices. One consequence of the pandemic is that we’re now more likely to order and pay ahead of time, or to use click and collect, and we are far less likely to use cash to pay for our purchases.
The UK’s high streets are increasingly cashless – cash use had greatly declined even before the pandemic – and debit card use, driven by contactless payments, overtook the number of payments made in cash in the UK in 2017. So while cashless payments are an extra safety precaution to minimise contact with others both during and post-pandemic, they are also another level of ease and convenience for consumers. The micro businesses in the UK (businesses employing fewer than 10 people) that still don’t accept card payments or allow you to shop online – whether through fear, inertia or a lack of expertise or experience – will face a huge challenge to stay relevant and keep up with these changes to the way their customers shop.
According to Square’s research, a surprisingly high 40 per cent of the UK’s micro businesses were still not accepting card payments even a year ago. But since the start of the pandemic many of these businesses have shown us how resourceful and inventive they can be. Lots of them have successfully managed to pivot and diversify their business models, and make the shift to online trading, including online and cashless payments. We’ve all seen our local sit-down only restaurants transform into food shops and markets, craft distilleries switch to producing hard-to-get hand sanitiser, and fashion and homeware brands create face masks out of deadstock fabrics that would otherwise have gone to landfill.
As takeaway took over from table service, Square customer Aries Bakehouse in Brixton found that selling its sourdough bread through a window meant it could continue trading through lockdown. The café and bakery also started selling flour and local beers so that customers could acquire more essential items from one place, and business boomed as a result. Likewise, specialist retailer Doughnut Time, which operated 14 outlets around the UK prior to the pandemic, used Square Online Store to build a platform for online retail and pivoted to online-only sales. The company also launched a DIY home doughnut online kit, tapping into the revival of cooking and crafting during lockdown, selling 50,000 kits via its Square Online Store within weeks.
Square’s toolkit proved popular with small businesses as they looked to pivot from offline to online sales during lockdown. With ease of use of paramount importance, business owners do not need to have any technical knowhow to get started with Square; anyone can create an online shop and start selling in minutes, even if they’ve never worked with Square before. Sellers who already use Square POS for in-store payments can set up an online store for free, handpicking which items they want to sell online. Payments are processed quickly, with business owners seeing over 99 per cent of payments processed and remitted to their accounts the next business day. Using a dashboard, customers can monitor all sales wherever they are made, helping with cashflow and inventory management.
Square has developed a range of services aimed at helping small and medium-sized businesses succeed as the high street evolves. For example, it rolled out a Curbside Pickup and local delivery to Square Online Store customers on March 20, allowing shoppers to request Curbside Pickup and text message notifications for a smooth and seamless experience. From launch date to April, there was a fivefold increase in weekly payment processing for Square Online Store compared with January to February 2020, showing how quickly sellers accelerated to move online as lockdown measures came into place.
The New High Street
Much has been written about the future shape of the high street, and how it is becoming more of a social hub at the expense of traditional shops. A recent study by the Centre for Retail Research showed that the number of coffee shops, restaurants, nail bars, hairdressers and treatment centres on the high street is growing, while the number of fashion, furniture, gifts shops and the like is shrinking.
Initial post-lockdown research from Global Data shows that almost one in three consumers plan to visit local shops more often than they did before the COVID crisis. This, combined with changes in how and where people work, could be beneficial to suburban high streets. We can also expect that consumers will continue to support those independent local businesses which proved to be such a lifeline for many during the pandemic, provided these businesses can continue to adapt their services and cater to their customers’ needs.
In order to thrive however, these cafes and restaurants, hairdressers, and special interest retailers need to look beyond high street footfall for business and take more of an omnichannel approach, delivering a consistent experience to the customer no matter how they choose to shop. This means embracing technology and offering a variety of online and offline services to give customers plenty of options in the way they choose to deal with the business.
Watch Square's Aries Bakehouse case study below...
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