The New Normal Permanent Shifts Expected in The Retail and Hospitality Industries

THE NEW NORMAL: PERMANENT SHIFTS EXPECTED IN THE
RETAIL AND HOSPITALITY INDUSTRIES
November 2020
INTRODUCTION
COVID-19 USHERS IN NEW NORMAL
PERMANENT SHIFTS EXPECTED BY INDUSTRY
KEY TAKEAWAYS
INTRODUCTION
Scope
▪ Coronavirus (COVID-19) has transformed the economic and consumer landscape. Disclaimer
It has changed the way we as consumers live, work and shop. Uncertainty remains Much of the information in this briefing
is of a statistical nature and, while
high. But what is clear is that economies will not emerge unscathed and the daily every attempt has been made to
routines and lifestyles of consumers will shift to accommodate continued social ensure accuracy and reliability,
Euromonitor International cannot be
distancing while treatment and vaccine options are investigated and, potentially held responsible for omissions or
into the longer term, a "new normal" as fears of a pandemic remain palpable. errors.
Figures in tables and analyses are
▪ This briefing explores which of these shifts will likely become permanent across calculated from unrounded data and
may not sum. Analyses found in the
the retail and hospitality industries post-pandemic, providing a glimpse of the briefings may not totally reflect the
new normal for those operating in these consumer-facing environments. companies’ opinions, reader discretion
is advised.
Specifically, it explores permanent shifts across the retail, travel, foodservice,
sports and payments industries.
As the COVID-19 pandemic drives
▪ Discussions and feedback from our clients are a vital part of all our research at seismic shifts across consumer
Euromonitor International. We welcome the chance to continue the conversation markets, the key question facing
business strategists is which of these
– full contact information for the authors can be found at the end of this report. changes are more reactionary in
nature versus signalling the start of a
long-term behavioural shift. This
briefing explores which of these shifts
will likely become permanent across
the retail and hospitality industries in
the post-pandemic era, providing a
glimpse of the new normal for those
operating in these consumer-facing
environments.
© Euromonitor International THE NEW NORMAL: PERMANENT SHIFTS EXPECTED IN THE RETAIL AND HOSPITALITY INDUSTRIES PASSPORT 3
INTRODUCTION
Key findings
Retail and hospitality COVID-19 has impacted high-touch service industries the hardest. In-person physical
industries among the experiences, such as dining out, were nearly brought to a standstill due to mandated
hardest hit lockdowns and other restrictions, forcing consumers to online channels to obtain goods
or services.
Not all these newly While new consumer behaviours have emerged during this crisis, not all will remain
christened relevant in a post-pandemic era. Some, like the physical barriers installed to keep
behaviours will stick consumers a safe distance from store staff, are likely just stopgap measures that will fade
post-pandemic as a vaccine or viable treatment for COVID-19 reduces virus risk.
New experiences Consumer attitudes regarding travelling, dining out and shopping will be forever
with the momentum transformed. Many behaviours that have become ingrained during the crisis, such as
and market could shopping online, will be retained to some degree even as life begins to approach
become cemented normality.
Digitalisation is at The digital transformation was unfolding across the retail and hospitality industries
the core of many of before COVID-19, but its importance was elevated due to the necessity to survive and stay
the crisis-inspired afloat. During the crisis, retail and hospitality operators shifted to digital in hopes of
shifts capturing lost revenue from closures and restrictions.
Build back better The pandemic has awakened consumer interest in more sustainable consumption,
becomes the cry of especially the attention given to businesses that act with a greater sense of purpose. More
many consumers and consumers are looking at how brands treat people as well as the environment, forcing
business leaders leaders to consider the actions taken to generate profits.
INTRODUCTION
Our themes that explore how COVID-19 has impacted consumer markets
Our global network of analysts has identified six themes which are impacting consumer markets.
We plan to examine these themes in a series of briefings in the coming months.
INTRODUCTION
KEY TAKEAWAYS
The "new normal": what’s here to stay for retail and hospitality?
Anticipated Changes to Consumer ▪ There is little doubt that COVID-19 has altered consumer
Shopping and Spending Behaviour markets. How consumers live, work, shop and play in the
future will be shaped by the lingering effects of this “dread
Reduce overall spending risk” and the subsequent shifts in behaviours brought
forward or outright inspired by this crisis.
▪ For example, an increase in remote working and learning
Buy more health and wellness- led to a decline in apparel, footwear and cosmetics sales as
related products
consumers adjusted their routines for the virtual world.
This period led to a boost in the hometainment trend
Buy more on products to whereby consumers ramped up cooking, entertaining and
improve life at home
socialising at home as on-trade occasions dropped. Such
shifts in consumer mindset have led consumers to focus
Reduce in-store shopping
more on self and family during these times.
▪ Most notably, mandated lockdowns globally and fears
over virus transmission led consumers to reduce time in
Increase online shopping public spaces. Shopping quickly shifted to digital channels,
leading to an overnight boom in e-commerce as well as the
acceleration of tech-driven trends like virtual try-before-
0% 20% 40% 60% 80% 100%
you-buy and live shopping during this period. One of the
% of industry respondents
most pronounced shifts expected to stay long term is the
Short-term change Mid-term change Permanent change
No change Not sure
rise in online shopping, according to industry
Source: Euromonitor International’s Voice of the Industry: COVID-19 Survey,
professionals surveyed in October as part of Euromonitor
October 2020 International’s Voice of the Industry: COVID-19 Survey.
COVID-19 likely to lead to a permanent shift in consumer behaviour
▪ COVID-19 has impacted high-touch service industries

the hardest, especially in-store shopping, eating out,
attending sports and undertaking business or leisure
travel. These in-person physical experiences were
Retailing nearly brought to a standstill by the multitude of bans,
restrictions and lockdowns imposed by governments
to curb the virus. The outlook remains precarious and
Consumer highly volatile given the continued outbreak of the
Sports virus globally.
Foodservice
▪ Short- to mid-term changes are expected for some
spending, such as eating out, socialising at bars or
Retail &
hospitality attending live sporting events or concerts. Travelling
abroad has also been decimated due to restrictions and
quarantines. However, these types of social behaviours
Consumer are expected to snap back to previous patterns in the
Travel
Finance long term, especially once a vaccine is rolled out.
▪ Not all consumer behaviours will revert to what was
Digital witnessed before the crisis, though. E-commerce, for
Consumer example, is likely to experience a permanent boost
from the period. In this briefing, Euromonitor will
explore which of these pandemic-driven shifts are
likely to lead to a more permanent change in consumer
behaviour across key consumer-facing industries.
INTRODUCTION
KEY TAKEAWAYS
Consumer Finance: COVID-19 accelerating the decline of cash usage
▪ COVID-19 has accelerated the decline of cash, increased utilisation of contactless tech and returned consumers
to recession-era spending habits. For the first time since 2009, total consumer spending declined globally;
however, total card and electronic consumer spending rose. The move of retail online as well as the perception
that cash can transmit the virus fuelled the growth of cash alternatives. Greater issuance of contactless cards
and utilisation of mobile devices for in-store payments has also been driven by health concerns. Merchants have
embraced this contact-free mindset and deployed the necessary technology to accept contactless payments.
While this trend is significant and will likely continue beyond the pandemic, it will have less of an impact than
the migration from paper payments. The crisis has also had a negative impact on the economy, resulting in
rising unemployment and falling incomes, leading many consumers to adopt recession-era spending habits.
These include lower overall spending, moving from credit to debit cards and reducing outstanding debt. While
this shift in consumer mindset is significant, this behaviour is likely to shift back during an economic recovery.
Impact of COVID-19 on Consumer Finance
Stopgap Measure Headline Grabbing Most Likely to Stick
Likely to fade as a vaccine or Exciting for now, but not likely New experience with the
viable treatment for COVID-19 to have the user base to sustain momentum and the market to
reduces virus risk its long-term growth become cemented long-term
• Companies adjusted their • Credit reward categories • Card and electronic payment
practices, including refusing adjusted the focus from travel channels will continue to rise in
cash and increasing contactless to online activity. popularity, displacing cash.
value limits. • Consumers shifted spending to • A more seamless payment
• Retailers added physical debit rather than credit cards to process will move payments
barriers at checkouts to reduce manage budgets. further into the background.
virus transmission.
Consumer Finance: crisis boosts the sustained move away from cash
▪ In 2020, cash payment value as a portion of consumer Global Consumer Payment Value
payments declined at the fastest rate than any time before. 2015-2025
While the migration of consumer preference away from 60,000
cash has been steady for years, the circumstances caused by
COVID-19 have contributed to the adoption of cash
alternatives. In developed markets where the migration to 50,000
card and electronic channels has been well established

prior to the pandemic, there was a decline in overall card
40,000
payment value as consumers spent less overall. In emerging
markets that were previously cash dependent, there has
USD billion
been rapid card and electronic payment value growth.
30,000
▪ Historically, access and literacy have been the two hurdles
to consumers using card payments. Once consumers
experience the added security and convenience of cards, 20,000
they are likely to continue to use them. With digital
adoption increasing globally, access has greatly expanded in
recent years. COVID-19 presented an opportunity to 10,000
increase their knowledge of the benefits, too. During the
height of the mandated lockdowns, consumers had little
choice but to use card or electronic payments to obtain 0
20152016201720182019202020212022202320242025
goods and services. Now that consumers are familiar with
Electronic Paper Card
the benefits, they will be unlikely to go back to cash post-
Source: Euromonitor International’s Passport: Consumer Finance, 2021
pandemic. edition.
Case study: Fintech Swish capitalises on the consumer shift in payments
▪ The Scandinavian markets have been the most

aggressive in moving away from cash for consumer
payments. Fintech Swish in Sweden is an example of a
player that has capitalised on the transition away from
paper, having active accounts with 7.7 million Swedes, or
more than 75% of the country’s population. On the Swish
platform, consumers can directly link their bank account
or can load financial card details to transfer funds to
other people or to merchants without any physical
contact. From 2019 to 2020, the paper portion of
consumer payment value declined by five percentage
points in Sweden and the number of new merchants
accepting the platform increased by 25% in the first
month of the pandemic there over the previous month.
Key takeaways
▪ Paper payments have rapidly declined during the
pandemic, driven by virus transmission concerns,
prompting consumers to utilise card and electronic
In 2020, paper payments accounted for 6%, payments. The added benefits realised by consumers
9% and 10% of all consumer payments in making this shift will remain relevant after the
pandemic. As such, platforms like Swish are likely to see
Norway, Denmark and Sweden, respectively.
greater momentum globally as the notion of cashless
extends beyond the Scandinavian region.
Consumer Foodservice: lockdowns force industry evolution
▪ The emergence of COVID-19 as a global pandemic brought the global restaurant industry to a standstill, with
millions of restaurants worldwide either closing (some permanently) or radically altering their business
models to appeal to consumers who were staying at home more. Facing a catastrophic fall in dine-in
transactions, operators frantically diversified, experimenting with delivery service, takeaway, meal kits,
partnerships with grocery retailers, selling grocery items in-store, and other such pivots.
▪ For many operators, nothing was sufficient, with many countries projected to see 20-30% decline in total
foodservice outlet numbers by early 2021 as more restaurants shut permanently. What remains – and what
follows – will likely be restaurants that are more versatile, more digitally native, more integrated with retail
channels, and overall far less dependent on any one format or type of transaction. Whilst consumers will return
to dining in restaurants, months spent solving for meal occasions at home will have a lasting impact, as some
food prep and acquisition habits learned under lockdown remain in the post-pandemic era.
Impact of COVID-19 on Consumer Foodservice
• Restaurants that converted to • Boost in meal kit interest as • More versatile restaurants that
delivery-only outlets overnight. hometainment gains steam. are less dependent on one format
• Conversion of city centre cores, • Rise in streaming of cooking or one channel.
including streets and pavements, shows for aspiring chefs. • Significant convergence of retail
for outdoor dining. • Surge in consumers cooking at and foodservice formats.
home in order to reduce virus
exposure.
Consumer Foodservice: fewer restaurant meals, more prepared meals
▪ Whilst a great deal of commentary on the impact of Home Delivery as % of Consumer

COVID-19 has focused on consumers’ renewed Foodservice Sales World 2014-2024
interest in cooking and a surge in spending on 14
household staples, this is unlikely to last long-term.
Consumers are no less time-pressed than they were
12
pre-pandemic, nor have they become radically more
competent cooks during lockdown.
Home delivery as a percent of total sales

▪ Instead, the pandemic has accelerated a number of 10
existing trends, above all a shift towards more meals
consumed at home yet prepared by others. As
8
mentioned previously, whilst COVID-19 will not be
the end of in-restaurant dining – eating out is simply
too important, both socially and culturally – it will 6
drive a major shift of meals to the home, as more fast,
basic meal occasions are served by takeaway,
4
delivery, and other services such as advanced
vending, all mediated by smartphone ordering.
▪ Supporting all of this will be a massive push to 2
update the industry infrastructure to serve rising
delivery and takeaway demand. At the forefront of
0
this are ghost kitchens, cooking facilities producing 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
solely for delivery which are amid massive Source: Euromonitor International Passport Consumer Foodservice, 2020
expansion, buoyed further by the pandemic itself. edition.
Case study: Wow Bao launches national ghost kitchen programme
▪ Chicago-based Wow Bao has rolled out a programme

where it will partner with restaurants to make and
deliver its trademark Chinese-influenced dumplings
and other items nationwide.
▪ Wow Bao products have long been produced in
central facilities and shipped to Wow Bao outlets for
finishing. The new programme extends this to third
party restaurants, which for a fee receive equipment
and training to make Wow Bao products and sell
them via third party delivery services such as Uber
Eats or GrubHub.
▪ The new initiative is designed to grow Wow Bao’s
brand across the US, whilst potentially offering a
sales opportunity to restaurants with flagging sales
post-pandemic.
Key takeaways
▪ Ghost kitchens and third party delivery offer a path
to faster brand expansion for the right operators. As
Eat-in as a percentage of total foodservice more meal occasions are served by delivery,
has fallen from nearly 75% in 2014 to a restaurants also will increasingly compete with
projected 65% in 2021. grocery retailers and other players to capture these
dining occasions.
Retailing: pandemic destabilises consumer confidence, store operations
▪ The global retail industry has been negatively affected by the COVID-19 pandemic, though the effects have not
been evenly distributed across channels. Euromonitor International projects that the retail sector will see net
sales decline by approximately USD500 billion in 2020. While the pandemic will continue to be the major
determinant of retail sales globally, retailers in most individual markets find themselves navigating multiple,
overlapping challenges, including the pandemic, travel restrictions, low oil prices, and elevated unemployment
rates. Combined, these challenges will hinder consumer spending, particularly on discretionary goods.
▪ The first half of 2020 was characterised by retailers around the world seeking ways to make stores and
warehouses safe for shoppers and workers, and by supply chain breakdowns. The second half saw retailers
investing in private label and looking for creative ways to replicate aspects of the in-person shopping
experience at home often by using technology to facilitate the virtual experience. Looking ahead at 2021, the
redefining of omnichannel and the permanent shift towards e-commerce sales will remain critical storylines.
Impact of COVID-19 on Retailing
• Developing safety standards for • Retailers investing in private • Retailers redefining

stores and warehouses. label portfolios to boost margin, omnichannel in a more holistic
• Limiting the quantity of high- take advantage of low way.
demand items shoppers may consumer brand loyalty. • Sales shifting online in ways
buy at once. • Brands experimenting with that are likely to be permanent.
digital services to replace in-
store activities.
Retailing: expected trajectory of e-commerce accelerated by COVID-19
▪ Euromonitor International projects that e-commerce will E-Commerce as a Share of Total Retail by
gain share compared to store-based retail in most countries Country 2019/2020
globally as consumers turned to digital channels during the
Australia
pandemic. The most rapid increase is expected to be in South
Korea, where Euromonitor projects e-commerce will go from Brazil
28% of total retail in 2019 to 36% by the end of 2020. South
Korea already had a strong culture of online shopping and China
high levels of connectivity, meaning consumers experienced Germany

little friction increasing their online purchases as the
pandemic made them hesitant to go to stores. India
▪ E-commerce changed in two ways as a result of the Russia

pandemic. First, many consumers were motivated to shop
online for the first time due to the pandemic, permanently S. Africa
increasing the pool of e-commerce shoppers. Second, e- S. Korea

commerce intermediaries such as marketplaces and delivery
platforms are set to capture a disproportionate amount of e- UAE
commerce sales growth in 2020. Consumers turned to these
UK
services for their convenience and logistics capabilities as the
pandemic disrupted traditional supply chains and warehouse US
operations. Further, several delivery platforms like Uber Eats
0% 10% 20% 30% 40%
or Door Dash, which have historically focused on other
E-commerce share of total retail sales
sectors like foodservice expanded into delivery of goods. 2019 2020
Source: Euromonitor International Retailing, 2020 edition.
Case study: MercadoLibre launches online supermarket features
▪ MercadoLibre is the dominant e-commerce player in

Latin America with a value share of 19% in 2019 –
nearly twice that of its closest competitor in the
region. Its new Supermercado Libre platform offers
consumers 20,000 grocery products for delivery
within 24 hours. MercadoLibre first launched this
offering in Mexico in 2019 with plans to launch it in
Argentina and Brazil in mid-2020. With COVID-19,
however, it moved this launch up to the first quarter
of 2020. As lockdowns led an online surge, it
provided an alternative to other online grocers.
▪ The retailer was agile with this initial launch,
prioritising an inventory of high-demand items
during the pandemic. It has also used livestreaming
to launch and promote new product launches.
Key takeaways
▪ Rapid online growth driven by fears about COVID-19
has created opportunities for new brands and
Nearly half of Latin American connected
retailers with existing e-commerce capabilities. All
consumers report buying food and drinks
retailers should be accelerating investments in e-
via the digital channel, according to the
commerce and omnichannel to avoid being left
Digital Consumer Survey. behind by the structural shifts taking place.
Sports: returning fans to live sports events remains an unresolved hurdle
▪ The cancellation of high-profile leagues and events left sports broadcasters with an abundance of empty airtime
to fill, with many opting to show old footage and highlights to protect viewership. Sponsorship and advertising
strategies and activities were sidelined. An unprecedented impact on contracts put a heavy strain on
stakeholder relationships as the return to any sense of normality faced continued delays.
▪ Sports that regularly attracted high attendances, such as the popular football leagues of Western Europe or the
major sports leagues of North America, were forced to compete in empty stadiums and arenas. Technology-
enabled solutions, such as Zoom fan walls and fake crowd noise, attempted to deliver the sense of a full-stadium
atmosphere in sports broadcasts. Yet there remains an eagerness to restore attendance and gameday revenues.
This means putting the right measures and precautions in place that will protect fans while building trust and
confidence. From moving to paperless tickets and cashless concessions, to the widespread introduction of fan-
monitoring technologies, all strategies are underpinned by a greater reliance on tech.
Impact of COVID-19 on Sports
• Mandated lockdowns saw • The absence of fans in the • Expected implementation of

widespread cancellations of stands led to Zoom fan walls fan-movement technology for
high-profile sports and and fake crowd noise. top-tier properties.
entertainment events. • Sponsorship exposure • Sustaining digital engagement
• Return of live events hinged on increased as stands became and utilising new channels for
introducing secure social extensions of pitchside viral videos and Twitch for
bubbles for athletes. billboards. eSports.
Sports: tech promises to deliver the balance of safety and experience
▪ The size of the challenge facing the professional sports Top Ten Domestic Leagues Globally 2019
industry is best seen through the lens of the world’s Season
most popular leagues – the major sports leagues of 80,000
North America and European football. The average

game across the top North American leagues had a 70,000
NFL
sellout ratio of over 87%, falling to 78% in Europe.
60,000
Leagues such as the NBA, NHL, NFL and Premier
League all boasted pre-pandemic venues where, on Bundesliga
50,000
Average Attendance
average, less than 6% of seats went unfilled.
La Liga
▪ The speed and efficacy of the recovery of live events 40,000
MLB
Premier
and associated revenues will hinge on the effective use League
of fan apps and big data that track fan movement in 30,000
real time, allowing fans and venue operators alike to NBA
Serie A
avoid bottlenecks at ticket booths, concessions stands 20,000
and other amenities as more fans return to stadiums in Ligue 1
Major League NHL
the near term. 10,000
Soccer
▪ A common goal and ubiquitous buzzword in sports
0
pre-pandemic was to deliver a “seamless” live 0 20 40 60 80 100 120
experience. This speed and efficiency have been Average Sellout Ratio
tempered for now in favour of safety and European Soccer
North America Major Leagues
precautionary measures, yet fan-monitoring
technologies are viewed as a measure that can address Notes: Bubble size refers to total attendance in 2019 season. The top 10 leagues
both challenges simultaneously. are defined by Euromonitor’s 2020 League Index.
Case study: WaitTime Crowd Intelligence software to rise to challenges
Managing high volumes of sports fans is a common challenge across the professional sports industry.
The highest attended sports league in 2019, Major League Baseball (MLB), attracted 70.1 million fans.
Image Source: http://thewaittimes.com/
▪ The effective monitoring of many fans at live Key takeaways

sporting events has become more crucial considering ▪ Venue operators need to ensure they are taking the
COVID-19. The pandemic has created a new and necessary steps in order to adequately track fan
urgent business case for such investment across movement at the venue. Technologies like WaitTime
sports, transitioning this technology from a luxury to can put operators in the best position to deal with
a necessity in this era. this common challenge across sports.
▪ WaitTime Crowd Intelligence software and other ▪ Many state-of-the-art sports venues already boasted
similar companies deliver real-time data to venue this capability. Many legacy venues need
operators. Fans can also obtain an app that informs infrastructure modernisation and technological
them of fan flows, enabling them to avoid bottle upgrades. The pandemic has created a far greater
necks, from ticket booths to concession stands. urgency surrounding these needs.
Travel: industry collapses amid restrictions, fears over virus transmission
▪ The global tourism industry is on the verge of a complete collapse with seismic changes expected across all its
categories. For example, international arrivals are down by 65% for H1 2020, according to the World Tourism
Organization, and passenger traffic is expected to decline by 66% for the full year, according to the
International Air Transport Association. The sharp decline in worldwide demand has triggered huge financial
difficulties and liquidity problems for all players, forcing many operators to suspend services, whilst cutting
costs in what could potentially become a completely reconstituted industry.
▪ Apart from the immediate risk management strategies that tourism companies are deploying, sanitisation and
cleanliness protocols will become part of the “new normal” for safe and secure travel. In addition, technological
transformation is expected to proliferate in the future as well as a permanent shift towards more sustainable
actions. Recovery will remain challenged as the volatility of the jobs market and rapidly rising unemployment
will hugely impact disposable incomes, which in turn will translate into reduced leisure and business travel.
Impact of COVID-19 on Travel

• Air passenger demand • Travellers embrace more • Technological transformation is

decimated amid travel “staycations” and last-minute expected to accelerate.
restrictions globally. bookings due to uncertainty. • Recovery will likely involve a
• Financial support and vaccine • Domestic tourism helps to permanent shift towards more
discovery vital for airline sector support industry during the sustainable actions.
to stay afloat. height of the pandemic.
Travel: uncertain times accelerate the move towards responsible tourism
▪ The COVID-19 pandemic and the strict travel bans have Travel and Tourism: Sustainability
achieved the previously unimaginable, with a dramatic Initiatives Planned in the Next Five Years
reduction in CO2 emissions on the back of a 90% drop in 2020-2025
passenger traffic worldwide in Q1 2020, which in turn has
Employee support programs
triggered calls for a “green recovery” and increased
Development of sustainable
decarbonisation goals. products
▪ “Responsible flying”, waste reduction, biofuel, carbon Recycling
offsetting schemes and eco-taxation are among the tools
Waste
proposed and adopted by the travel industry to reduce
CO2 emissions and have now even been put more on the Energy
radar of industry operators. Clean technology

▪ Changing consumer attitudes are also driving a bigger shift Sustainable sourcing
towards more sustainable transportation and tourism
Green technology
practices, as well as preferences for more community-
based and eco-tourism initiatives and the integration of Pollution
circular economy processes into the business practices of
Supply chain resilience
market players.
Forest and biodiversity
▪ Responsible tourism also entails greater responsibility for protection
those vulnerable communities impacted by the pandemic Water

for which tourism is their main source of income. The 0% 20% 40% 60% 80%
promotion of sustainable domestic travel can help foster % of industry respondents
greater awareness of the importance of tourism and its Source: Euromonitor International Voice of the Industry: Sustainability
economic benefits for these communities. Survey, June 2020
Case study: Iniciativa Imagine supports sustainable actions
▪ Iniciativa Imagine is an online initiative launched in 2019

which seeks to combat climate change by sensitising
people to social and environmental considerations and
raise awareness about the importance of preserving
In April 2020, in Euromonitor natural resources with companies and destinations
International’s Voice of the Industry: through sustainable tourism, environmental education,
Travel and Tourism Survey, 68% of gamification and corporate social responsibility.
respondents stated that they had ▪ Imagine created the Green Passport, which is a tourist
witnessed an increased interest from guide of environmental education, which
consumers regarding sustainable travel allows passengers to calculate their carbon
features and attributes. footprint during their trips, choosing
responsible companies, carrying out low-impact
activities and travelling to sustainable destinations. In the
different sections of the Green Passport, tourists
can calculate their carbon footprint, with the possibility of
reducing it and (or by) contracting the providers and
activities that they offer.
Key takeaways
▪ Carbon-neutral travel is set to continue to grow globally
and forge a more sustainable path to recovery for the
tourism industry. Options for more transparency on
the environmental impact of travel, supported by such
campaigns, are likely to help advance sustainable
practices and evolve consumer behaviour.
INTRODUCTION
KEY TAKEAWAYS
KEY TAKEAWAYS
Permanent shifts expected across the retail and hospitality industries
▪ The immediate impact that COVID-

19 has had on these explored Consumer Finance
industries is hard to overstate. Of
all sectors of the global economy, • Restaurants become more versatile with less dependence
travel has been the most severely on one channel or format.
disrupted, with consumer
foodservice not far behind. In the Consumer Foodservice
wake of the crisis, it is an • Notion of a cashless society gains as the shift from paper to
unfortunate certainty that many digital forms of payment accelerates.
operators – especially
independents – will be forced to Retailing
close their doors permanently.
▪ Beyond this initial shock, the
• E-commerce moves from the periphery to the centre of
impact will continue to reverberate
retailers’ strategies.
across these industries long after Sports
COVID-19 itself has passed.
Consumer attitudes regarding • This period will lead to an even stronger reliance on digital
travelling, dining out and shopping to solve fan engagement and venue challenges.
will be forever transformed, and
many behaviours that have become Travel
ingrained during the crisis will be • Responsible tourism will bring structural reforms for
retained even as life begins to industry in the post-pandemic era.
approach normality.
KEY TAKEAWAYS
Digitalisation is at the core of many of these crisis-inspired shifts
Measures to Prevent Similar Risks in the ▪ Becoming digital is at the core of many of these
Future shifts. The digital transformation was unfolding
across the retail and hospitality industries before
Reshape and implement digital COVID-19, but its importance was elevated due to
strategies the necessity to survive and stay afloat.
▪ During the crisis, retail and hospitality operators
Develop crisis contingency and
shifted to digital to cater to the newly home-centric
response procedures/ plans consumers. Retailers accelerated their adoption of
click-and-collect services to keep up with the e-
commerce boom. Restaurants that were once heavily
Improve client/customer dependent on dine-in operations shifted to delivery
communications
and takeaway. Destinations offered virtual
experiences to connect with prospective travellers.
E-commerce/omnichannel ▪ Of course, digital was viewed as being important
distribution
before COVID-19. Half of the industry professionals
in the Voice of the Industry: Digital Survey, fielded in
late 2019, said a digital presence was an important
Conduct global scenario planning
to forecast potential impacts part of their company’s value proposition. But this
crisis further underscored digital’s role. Some 60% of
0 20 40 60 80 industry professionals viewed implementing digital
% of industry respondents strategies to mitigate similar risks a more important
Apr-20 Jul-20 Oct-20 action than crisis planning, according to the Voice of
Source: Euromonitor International’s Voice of the Industry: COVID-19 Survey, the Industry: COVID-19 Survey.
April, July and October 2020
KEY TAKEAWAYS
Rising interest in sustainable consumption also coming to the fore
▪ The global pandemic has also awakened consumer interest in more Impact of COVID-19 on
sustainable consumption, especially the attention given to businesses that Sustainability Initiatives
act with a greater sense of purpose. This is illustrated by the 46% of
Increase in attention paid
respondents in the Voice of the Industry: COVID-19 Survey that said that to how companies treat
consumers will permanently look at how brands treat people. customers and employees
during a crisis
▪ Given that consumers are spending more time at home, there is expected to
be a reduction in carbon emissions due to reduced travel and commuting.
Decrease in demand for
However, the anti-plastic movement, in motion before the crisis, is second-hand products
experiencing a setback, as single-use plastic sees a revival by new hygiene
protocols as well as the e-commerce boom. Over 50% of respondents in the
Voice of the Industry: Sustainability Survey saw protecting the environment Decrease overall carbon
emissions due to limited
as the most important sustainability issue in 2020. travel
Most Important Sustainability Issues For Businesses 2020
Protection of the environment Increase demand for plastic

packaging
Promotion of social and community well-being

0% 100%
% of industry
Good governance and internal policies for respondents
reporting and accountability
Short-term change Mid-term change
Permanent change No change
0 20 40 60
Not sure
% of industry respondents Source: Euromonitor International’s Voice of the
Source: Euromonitor International Voice of the Industry: Sustainability, June 2020; n=1,017 Industry: COVID-19 Survey, October 2020
KEY TAKEAWAYS
Reinvention of the last mile is an example of a trend with opposing forces
▪ While digitalisation and sustainability have risen in importance, this is an Desired Delivery Features 2020
example where differing forces do not always move in step. Simply put, the
rapid rise in digitalisation in retail and foodservice is happening at the Free delivery
expense of sustainable consumption in some cases. Rising last mile Free returns
delivery costs and environmental concerns magnified by the e-commerce
Package tracking
boom are forcing retailers, foodservice operators and delivery platforms to
explore new delivery and collection methods. Choose delivery day/time
▪ Last mile options receiving greater attention during the crisis have ranged Text/email update notifications
from low-tech click-and-collect services that ask consumers to retrieve
Next-day delivery
items from central locations to high-tech robotics that deliver products or
meals to the consumer’s home. Even so, only 24% of global connected Same-day delivery
consumers viewed click-and-collect options and 28% viewed being able to Pick up at a more convenient location
pick up at a more convenient location as important delivery features,
Ability to pay cash upon delivery
according to the Digital Consumer Survey.
▪ Despite this low consumer interest, retailers and foodservice operators Click-and-collect options
ramped up their click-and-collect services during COVID-19 to more See photo of where package is left
efficiently fulfil online orders. Some retailers and foodservice operators
None of the above
pivoted their physical space into makeshift fulfilment centres or leveraged
microfufilment centres operated by third parties. The rise of ghost Other
kitchens in foodservice also speaks to this trend. Ultimately, it is all about 0 100
getting items or meals closer to the consumer before ordering to reduce % of connected consumers
the time and expense of making that delivery. These efforts to reinvent the
last mile also reduce the environmental impact of that purchase – a Source: Euromonitor International’s Digital
Consumer Survey, fielded from March to April
concern that has largely been scarified in favour of ever-faster delivery. 2020
KEY TAKEAWAYS
What should retail and hospitality operators focus on?
▪ Increased digitalisation and sustainability are two key themes reshaping consumer markets with one or both
likely to be at the core of those crisis-fuelled trends that are most likely to become permanent post-pandemic.
As companies navigate this period until society approaches a new normal, retail and hospitality operators will
also have to keep some other factors in mind. This includes the heightened focus on health as well as a renewed
interest in home at the centre of life. Companies that survive during this period of uncertainty and thrive in the
new normal will be those that balance these myriad of forces reshaping consumer life.
Accelerate the All are health Corporate Supply chain and

Hometainment
digital players now altruism pricing
• While being digital • All companies must • The re-prioritisation • Historic over-reliance • With focus on the
may have been an consider themselves of consumer values on international supply home for the
afterthought for some health players, will bring anti- chains must be foreseeable future,
companies before the operating in some way consumerism to the squared with cost and retail and hospitality
pandemic, it is now a to mitigate consumer fore. “Green New Deal” sustainability issues. industries must look
non-negotiable for health fears. This is initiatives will link Consumer demand will towards enhanced
companies across the important as those economic equality to grow for local products virtual experiences
retail and hospitality operating across the sustainability. Retail and small-scale, or even delivery and
industries. retail and hospitality and hospitality community collection services
Companies must look to create safe operators will have to production, altering that transport the
adopt a digital-first environments for consider the impact of how some products get physical ones to the
mindset today. consumers to visit. doing business. to consumers. consumer.
For further insight, please contact
Caroline Bremner Alan Rownan
Head of Travel Head of Sports
caroline.bremner@Euromonitor.com alan.rownan@euromonitor.com
https://www.linkedin.com/in/carolinebremner1/ https://www.linkedin.com/in/alanrownan/
Amanda Bourlier Kendrick Sands
Head of Retailing Head of Consumer Finance
amanda.bourlier@Euromonitor.com kendrick.sands@Euromonitor.com
https://www.linkedin.com/in/amandabourlier/ https://www.linkedin.com/in/kendrick-sands-825b867
Michelle Evans Michael Schaefer
Senior Head of Digital Consumer Global Lead, Food & Beverage
michelle.evans@Euromonitor.com michael.schaefer@Euromonitor.com
https://www.linkedin.com/in/michelleevansdigital https://www.linkedin.com/in/mschaefer84
Nadejda Popova
Senior Project Manager, Travel
nadejda.popova@euromonitor.com
linkedin.com/in/nadia-popova-phd-09460b
© Euromonitor International
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The New Normal Permanent Shifts Expected in The Retail and Hospitality Industries

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The New Normal Permanent Shifts Expected in The Retail and Hospitality Industries

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THE NEW NORMAL: PERMANENT SHIFTS EXPECTED IN THE

RETAIL AND HOSPITALITY INDUSTRIES

COVID-19 likely to lead to a permanent shift in consumer behaviour

▪ COVID-19 has impacted high-touch service industries

Consumer Finance: COVID-19 accelerating the decline of cash usage

card and electronic channels has been well established

Case study: Fintech Swish capitalises on the consumer shift in payments

▪ The Scandinavian markets have been the most

Consumer Foodservice: lockdowns force industry evolution

Consumer Foodservice: fewer restaurant meals, more prepared meals

▪ Whilst a great deal of commentary on the impact of Home Delivery as % of Consumer

Home delivery as a percent of total sales

Case study: Wow Bao launches national ghost kitchen programme

▪ Chicago-based Wow Bao has rolled out a programme

Retailing: pandemic destabilises consumer confidence, store operations

• Developing safety standards for • Retailers investing in private • Retailers redefining

Retailing: expected trajectory of e-commerce accelerated by COVID-19

high levels of connectivity, meaning consumers experienced Germany

▪ E-commerce changed in two ways as a result of the Russia

increasing the pool of e-commerce shoppers. Second, e- S. Korea

Case study: MercadoLibre launches online supermarket features

▪ MercadoLibre is the dominant e-commerce player in

Sports: returning fans to live sports events remains an unresolved hurdle

• Mandated lockdowns saw • The absence of fans in the • Expected implementation of

Sports: tech promises to deliver the balance of safety and experience

North America and European football. The average

Case study: WaitTime Crowd Intelligence software to rise to challenges

▪ The effective monitoring of many fans at live Key takeaways

Travel: industry collapses amid restrictions, fears over virus transmission

Stopgap Measure Headline Grabbing Most Likely to Stick

• Air passenger demand • Travellers embrace more • Technological transformation is

Travel: uncertain times accelerate the move towards responsible tourism

radar of industry operators. Clean technology

those vulnerable communities impacted by the pandemic Water

Case study: Iniciativa Imagine supports sustainable actions

▪ Iniciativa Imagine is an online initiative launched in 2019

Permanent shifts expected across the retail and hospitality industries

▪ The immediate impact that COVID-

Digitalisation is at the core of many of these crisis-inspired shifts

Rising interest in sustainable consumption also coming to the fore

Protection of the environment Increase demand for plastic

Promotion of social and community well-being

Reinvention of the last mile is an example of a trend with opposing forces

What should retail and hospitality operators focus on?

Accelerate the All are health Corporate Supply chain and

Head of Travel Head of Sports

Amanda Bourlier Kendrick Sands

Head of Retailing Head of Consumer Finance

Michelle Evans Michael Schaefer

Senior Head of Digital Consumer Global Lead, Food & Beverage

Senior Project Manager, Travel

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