Adapt: A Mantra for Retailers in the New Normal
Just as many of us needed to adjust our personal day-to-day routines, retailers too, needed to adapt. Compared to just a few months ago, the retail industry has experienced an almost complete overhaul. We’ve seen businesses shift primarily to online, while others have closed shop altogether. And now, with stay-at-home orders beginning to lift in certain parts of the country, the industry will need to adapt, yet again.
As retail shifts to reopening, the landscape will look very different than before the pandemic. Circumstance has likely shifted priorities for consumers across the country. Some consumers will return to their favorite stores, while others may opt to address other needs. In any event, the industry cannot operate as “business as usual.” Business and communications strategies implemented pre-pandemic need to be reassessed based on current consumer sentiment. Our current environment and its impact on us has created new and significant challenges. Now more than ever, actions and messages need to align with consumers’ immediate needs.
Experian instituted a survey of the general population to better understand shifting consumer sentiment as a result of the pandemic. We found 42 percent of Americans are spending less or trying to cut back on spending, however that number varies by age demographic. Only 30 percent of Generation Z respondents are spending less or trying to cut back on spending, while nearly 50 percent of baby boomers are attempting to take the same action. Furthermore, only 30 percent of Americans are concentrating on buying in fewer shops.
The same survey also showed that aside from groceries, books, video games and music, and food delivery and takeout have seen increases in spend, while retail spending is down in May compared to the previous month. Among Gen Z respondents, the trend is a bit different. These consumers have also spent more on alcohol, beauty and wellness, and clothing.
However, it’s not just how much money consumers are spending and the products they’re spending it on. We’ve seen shifts in how people are shopping. In some instances, consumers will opt for curbside pickup or delivery in hopes of minimizing health risk. According to Adobe Analytics, the number of orders placed online and picked up at brick-and-mortar stores by customers increased 208 percent between April 1 and April 20 compared to a year ago.
As the situation for many Americans remains fluid and shifts in the months ahead, we all need to stay keenly aware of the trends. The more retailers can understand how customers have been impacted by the pandemic and how it’s shifted their behaviors, the better positioned they will be to address specific challenges. While there was a focus on relevancy prior to the pandemic, retailers need to double-down on that commitment. It’s no longer just about a sale, but how retailers can help customers. For example, there may be frequent gym goers who are now restricted to the at-home fitness lifestyle. With that in mind, a fitness company may share helpful tips and resources, or instructional videos.
In addition to communicating with current customers, some retailers may have seen an increase in new customers as a result of the scarcity of products from competitors. Take a similar approach to learn as much about these customers’ needs and find ways to remarket other relevant products. The more retailers can resonate and help customers manage through the pandemic, the better positioned they will be to build a strong relationship.
The long-term impact of the pandemic is still unknown, but we can expect the retail industry to be considerably different in the coming months. As consumers navigate their own situations, they'll look to organizations that can help and meet their expectations. The more retailers can gain insight into consumer sentiment and preference, as well as assess how customers have engaged their brands during the pandemic, the better positioned they will be to deliver messages that resonate, particularly in uncertain times.
Jill Canetta is Experian’s chief data officer of marketing services. Experian is the world’s leading global information services company.