Adapting to Unprecedented Times: What Are Key Takeaways for Retailers?
COVID-19 has resulted in unexpected exponential growth in e-commerce and shifts in shopping. At the beginning of the pandemic, online or in-app shopping increased over 40 percent in the U.S., while trips to stores decreased over 50 percent. As time has gone on, however, consumers predict they’ll find some semblance of a return to normality, including going back to brick-and-mortar shopping. Our research into consumer shopping behavior reveals U.S. retailers should be prepared for a mix of online and in-store purchases as they plan ahead.
The research reveals that although some categories tend to be purchased exclusively online (e.g., accessories, apparel, household appliances), others are still purchased predominantly in-store (e.g., food, beverage, household products), and patterns are changing. Specifically, for some categories, consumers place more emphasis on experience, so they’re more likely to return to stores sooner. Whether cheaper purchases such as accessories, or more expensive ones such as electronics, the need to touch and feel product remains predominant.
Currently, 65 percent of U.S. consumers buy clothes solely online. However, given the choice, just 18 percent would buy their clothes online only, while 47 percent would purchase both in-store and online. One respondent from our study, for example, told us buying clothes from home is difficult as they don’t know what the material, fit or color is like. “It's isolating and traps you,” the respondent said.
For food and beverage, currently 60 percent of consumers prefer to buy in brick-and-mortar shops, and 26 percent are purchasing both online and in-store. However, in the future, 36 percent plan to mix online and in-store for this category. Retailers can therefore expect a small increase in online grocery purchases, also likely driven by consumers increasingly preparing foods and meals while sheltering at home.
For personal care products, about half of consumers shop solely in-store and 28 percent just online. This will shift to 15 percent online only, and just 38 percent in-store only. Therefore, 42 percent will combine both internet and brick-and-mortar experiences going forward.
Consumers today want the best of both worlds, and key drivers include necessity and emotion. Shopping in a physical store is a holistic brand experience, offering the opportunity to touch and try as well as receive direct customer service if required.
Regardless, brick-and-mortar retailers should take into account that providing customers with a safe shopping environment is key to their business. The fear of lack of social distancing in unsafe spaces may keep consumers away from malls, preferring to shop online regardless of product category. And some find in-store shopping experiences stressful and worry about risk of exposure to the virus.
Here are three considerations for retailers going forward across all categories:
- Ensuring safety first: "Clean is the new currency." How to provide a safe environment for your product, your customers and your employees is top of mind across every category. Shifts in technology adoption to increasing contactless experiences will continue to emerge.
- Consumer needs are evolving: Get ahead of your customers’ behavior to understand what’s driving their purchases and balance their wants and needs. It’s critical to understand their mix of online and in-store purchasing for your category, as well as how the two channels work together to maintain customer loyalty.
- Value is an underlying theme for all products and retailers: Consumers are focused on value. Reframing your proposition (and associated benefits) to this mindset will ensure greater acceptance of your brand going forward.
Many brands and retailers have already rapidly adopted new e-commerce strategies, but they need to constantly evolve to changing needs, plus predict the next ones, sector to sector. By listening to customers, understanding them and implementing a consumer-centric approach, retailers may remain competitive in these challenging times.
Carol Fitzgerald is the founder and CEO of buzzback, an agile, consumer-centric market research firm.
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