COVID-19 has irrevocably changed us. It’s changed the way we live our daily lives. It’s changed our perception of risk and vulnerability. And it’s certainly changed the way we shop.
From the early days of hoarding toilet paper and canned goods to the now weeks- and presumably months-long closure of brick-and-mortar non-essential business, consumers’ behavior has been forced to adapt to the tides of this pandemic. Gone are the days of casual in-store browsing—shopping is now a quick, anxious, and targeted experience.
Eighty-three percent of American shoppers say their in-store shopping behavior has changed since the coronavirus hit. Participants in a recent survey by Field Agent report they’ll likely sanitize their carts and baskets before use for months to come.
Meanwhile, the online marketplace has been booming as the public does its best to obey shelter in place orders. Pure ecommerce platforms in the Americas have seen an 80% increase in demand since January, according to emarsys’ Covid-19 Commercial Insight study.
It’s hard to tell whether supply chains can keep up and whether conversion (early signs say it’s up 8.8%) is actually going to last when consumer spending across the board has dropped to focus on survival. McKinsey figures from March show shoppers really only spending money on groceries, home entertainment, and stuff for kids.
We don’t have a crystal ball to tell you what consumer behavior shifts will last. But we can help you ride this wave of uncertainty and prepare for what a “new normal” might look like in the months and years after the pandemic.
- The flattened curve of consumer confidence
- The four types of online shoppers
- Online will be the new normal
- Ability to temporarily pivot to meet demand is appreciated
- Customers are more OK with being marketed to—and researched
- Necessities will be front and center but some demand will recede
- You’ll see ramped up virtual customer service You might notice some new shoppers
- You might notice some new shoppers
- Direct-to-Consumer brands can leverage brand loyalty
- Virtual shopping experiences
Charts tracking consumer confidence could serve as inspiration for all of us doing our part to keep coronavirus at bay. While, in the early days of COVID, we saw a precipitous drop in consumer confidence (the closure of stores and restaurants and a quaking stock market caused a 25% drop—the worst since the Great Depression), the curve has, well, flattened.
“There was this huge shock and the people continued to kind of acclimate,” says Chris Jackson, the Washington D.C.-based senior vice president of Ipsos, one of the world’s leading market research companies. This acclimation is better than what happened during the Great Depression, which saw a continuous drop.
Consistent feelings amongst consumers isn’t actually a bad thing, in this context, Jackson says. What we’re seeing now could be due to people feeling optimistic about the temporary nature of the status quo. A new Ipsos poll conducted for ABC News has most Americans expecting social distancing measures to last into July, but for things to improve from there.
Yes, we’re all in this together, but not all North American consumers are experiencing COVID the same way, Ipsos research has found. Jackson splits them into four groups:
- Retirees, whose lives haven’t really changed all that much apart from limited social contact,
- The work-from-home set who have been busy adjusting their lives to be as home-based as possible,
- Those who have been laid off, and
- Those still out in the world working and living life the way they mostly did before, albeit with some limitations.
The work-from-home set is the one that is flocking to ecommerce, Jackson says. They still have steady income and tend to be savvier in downloading apps, shopping online, and signing up for services that will keep them home as much as possible while still getting everything they need. “We do know from studying history that it’s these pivotal moments that break down old behaviors and open up space for new behaviors,” he says. “People are willing to do things they hadn’t done in the past.”
Sell to the person behind the persona with our insights on consumer psychology.
We’ve spent decades building an online marketplace. A post-pandemic world is showtime for pure-ecommerce platforms that don’t have the expense of a brick-and-mortar and which are nimble enough, inventory-wise, to get customers what they need quickly and with zero hassle.
“Every need must now be met digitally, which means your business is now digital-first, whether you’re ready or not,” wrote Widerfunnel Founder & CEO Chris Goward on a recent blog post about consumer behavior amidst COVID. Take this slow period to pivot, if you’re willing to make the bet that consumers will be more comfortable shopping digitally after the worst of this passes.
Just down the street from Chris Jackson’s home in Washington is an ice cream shop, now shuttered, of course. But the woman running the shop has created a new, temporary, business out of her wholesaler relationships by offering fresh food boxes to residents in the community. Now there are people waiting down the block to pick up their boxes they ordered from her online.
Other restaurants are becoming temporary food banks to meet demand. Mexican restaurant Comal y Canela in Toronto, for example, is building goodwill and brand recognition out of their more direct desire to meet a community need for food packets. In early April, owner Yasmen De Leon handed out more than 100 packs to those in need and has been getting help from donors who want to help.
Given this shift to the online marketplace being the “new normal,” there are early signs shoppers are being more responsive to well-targeted online advertising. A new survey of 2000 North Americans from Yotpo.com found consumers are starting to pay more attention to marketing messages, including those coming from email, text, and social channels (35.65% said these are grabbing their attention). There’s also more browsing (32.05%) and buying (25.35%) happening online than in pre-COVID times.
Jackson was pleasantly surprised to read some good news for his business in The New York Times recently: COVID has meant people are now more than happy to pick up the phone and answer survey questions from pollsters. “The increase in responses means that survey results are likely a more precise reflection of how people feel,” the Times reports. Wouldn’t it be great to have richer and more accurate market data on which to make decisions heading into the future?
While toilet paper hoarding seems to have eased up, consumer spending will likely stay the course on essentials over luxury. More than 42% of respondents to the Yotpo.com survey said they’re shopping for health and wellness items these days, and safety continues to be top of mind—hand sanitizer sales have been, understandably, through the roof (if you can even get your hands on some).
Food is also being purchased far more online, which is indeed a shift, as consumers forced to stay home do their best to cook meals for themselves rather than go out. Online grocery delivery could soon be the new normal as people continue to limit contact with the outside world.
Jackson of Ipsos, however, cautions that not all of this will last once social distancing measures lift. Once people get comfortable returning to grocery stores more frequently, there might be less demand for, say, those produce delivery boxes like the ones his local ice cream shop has been offering.
All those Zoom and FaceTime calls that have replaced living room visits with family and drinks with friends out at the bar? Expect more of that kind of interaction in the world of commerce, as continued efforts to prevent the spread of a virus we don’t yet have a vaccine for remains a priority.
Store associates should be prepared to hop on some version of a Google Hangout with customers the way they might have interacted with them in person in a brick-and-mortar. Expect more chatbots and more interactive virtual customer service portals, too.
While customers may prefer that in-person service experience, expect the pandemic to see shoppers lean in the direction of contactless communication. Time to set up those Slack channels and Instagram Lives to build community and provide ways for customers to reach you with questions or conversations about your product.
If you’ve got products that are in high demand, brand loyalty will be taking a back seat in post-COVID times. This could be an advantage for you if you’re a newer, lesser-known company looking to make inroads and build sales.
A little over 40% of survey respondents to Yotpo’s survey said they’d be glad to turn to less familiar brands for similar items. This pandemic could be a good time to optimize your web presence.
“Leverage the power of user-generated content and consumer feedback to build trust in these times,” Yotpo suggests. “Having a steady stream of new and authentic reviews will be especially critical to shoppers.”
Back in the Great Recession, big name brands really suffered because people were in survival mode for so long, Jackson says. They’d buy more no-name brand items and were satisfied they did the job. That could happen again with necessities, but it doesn’t seem to be happening with brands that have a strong following to begin with.
In March, Rakuten Research found beauty brand sales climbed 50% and apparel up 56%. “In light of the COVID-19 pandemic, consumer purchasing habits, as well as the availability of products, are clearly changing rapidly,” Julie Van Ullen, U.S. managing director of Rakuten told MediaPost. “Many direct-to-consumer brands are actually poised for growth as so many consumers shift to online shopping.” Take advantage of the extra time these customers have on their hands and find creative ways to connect and keep in touch. What can you do to help entertain these customers while they trawl social media day in and day out? What deals can you offer to those who love your brand and have been loyal?
If we do wind up in a future with less brick-and-mortar presence and more of a willingness to shop online, you can bet we’ll see virtual reality ramping up to meet that demand. Just look to South Korea, which has emerged from the pandemic in better shape than most others.
“We are seeing more and more examples of how virtual and augmented reality can be used in retail,” Ji Hyuk Park, Nielsen Commercial leader in South Korea told Nielsen Global Insights. “The beauty sector is very big in Korea, and brands and retailers are leveraging this technology to enhance the user experience, enabling them to test and try out products virtually.”
“In the challenging times of COVID-19, where hygiene is a big concern, consumers will be less prepared to physically try on products, and this is where augmented reality can replicate experiences without the health implications,” said Park.
Imagine virtual grocery shelves you can browse yourself or racks of clothing you can peruse via virtual reality. If times of crisis force consumers into new behavior, maybe, once the fear subsides, the future will be an exciting place to be.