Turning point for retail: One year after the first lockdown

For the retail sector, the first lockdown in March 2020 was and still is a watershed of historic proportions. From one day to the next, everything that was not considered systemically relevant was closed. Images of extinct city centers went around the world.


For the retail sector, the first lockdown in March 2020 was and still is a watershed of historic proportions. From one day to the next, everything that was not considered systemically relevant was closed. Images of extinct city centers went around the world. New York, London, Paris, Berlin - the world's liveliest centers were deserted in one fell swoop. None of us had ever seen anything like that before, a real moment of shock. And it was clear to every retailer, and also to us as partners in retail, at the latest after the first extension of the lockdown, that we were not experiencing a temporary exception here, but a turn of the times.

Those who had not already digitized have lost

The transformation of the retail sector has been on everyone's mind for years. PAYBACK has led the way here, particularly when it comes to digitization - for example, with the comprehensive expansion of its online partner portfolio and the end-to-end mobilization of the entire PAYBACK program and our services through the PAYBACK app. I can remember how we still had to do some convincing at the beginning. For us, even ten years ago, there was no either/or between bricks-and-mortar and online retail. The goal has always been to connect the worlds and build a bridge between online and offline.

What counts is reach and the ability to connect with customers

Digitalization is advancing, this progress cannot be stopped (thank goodness). But the fact that we will one day be faced with completely closed stores, that was previously unthinkable. And that's why it paid off last year in particular that we operate in this unique partner network and can leverage the reach of more than 31 million active customers in Germany, that we are able to react quickly with our partners and cushion sales shortfalls in stationary retail with digital offerings. Contactless point collection and payment with the PAYBACK app has led to an increased sense of security among many customers, as nothing but their own smartphone needs to be picked up at the checkout. The pandemic has thus become an accelerator of digital trends and, above all, of mobile services.

Despite lockdown, customers collected points worth EUR 20 million more than in 2019

In March 2020, it quickly became clear to us and our partners that we needed to address the huge general uncertainty immediately. It was a matter of offering customers orientation. Where is what available? Is the partner business open, at what times? What can I expect as a customer on site and how can I protect myself from contagion? Here, we worked very intensively with our partners to quickly provide customers with the relevant information. We had to stop planned campaigns, completely rethink our approach and react at lightning speed despite our complex processes. If PAYBACK stands for one thing, it's relevance. And when circumstances change overnight, the content that is important to customers changes immediately. A good partner proves itself in a crisis, and we're happy to go a lot of extra miles to make sure that happens. After all, there is no lockdown for loyalty. And what we have also seen is that customers were and are more interested than ever in savings opportunities and coupons. In our case, we can also see this from the fact that PAYBACK customers collected points worth EUR 473 million in 2020 - that's EUR 20 million more than in the previous year.

Certain purchasing patterns have changed permanently

When many people stay home a lot, more is consumed and purchased. Customers shop less frequently than before Corona, but their shopping carts are larger. Older people are particularly cautious and still go shopping significantly less. But young families with babies are also more likely to forego shopping on site, and among them the strongest increase is seen in shopping with online partners. Couples, on the other hand, are not very reluctant, but they have nevertheless been out and about in stores somewhat less in recent months than in previous years. Singles have the most stable shopping behavior in terms of the frequency and quantity of their purchases in stationary retail and also online.
Food retailers, drugstores and pet supplies were busy throughout the year. Beverage stores took the top spots. Our data also shows that due to the low mobility of people, stores in the cities lost out last year. The influx from surrounding areas, which usually provides strong sales, has dropped significantly due to the lockdowns. Consumers have shopped much more in their own neighborhoods, which in turn has benefited brick-and-mortar retailers in small towns.
The big winners, or what was bought a lot, are sporting goods, bicycles, furniture and furnishings, consumer electronics and - how could it be otherwise - meal delivery services. Toys also remain in high demand, and inexpensive fashions are bought more than expensive ones. Tourism and the event industry are still the hardest hit - there's been hardly any movement there for a year now, with the exception of suppliers who came to Germany on vacation last summer. And these past few months naturally mean a hard break for businesses that depend on mobility - gas stations, for example, but also fast-food restaurants.

We must preserve shopping diversity

The past year has also shown what we miss most when it comes to shopping: Freedom and variety. Both are still missing. Because as convenient as online shopping may be, it's just as much the local shopping experience that we desperately need. Customers want to be inspired and advised in the stores, to be able to touch and smell goods - and to stop at an ice cream parlor on the way home. Shopping is always a social interaction and a central experience in our downtowns and neighborhoods. And if we don't want the ghostly images of empty pedestrian zones to become a permanent state of affairs, we must, on the one hand, continue to strengthen stationary retail and digitize it. But on the other hand, we must also ensure that we maintain diversity in e-commerce. The click must not automatically end at one of the online giants. With our multichannel marketing platform and our reach, which we link with personalized offers, we support our 680 partner companies - offline and online - even in times like these.