Can Consumer Insights From 2019 Holiday Season Help Retailers Prepare for COVID-19 Recovery?
Retail sales during the second half of 2020 — including the pivotal back-to-school and holiday shopping periods — will be exponentially more important than ever before. Not only will retailers be forced to try to recoup as much of the losses from closures caused by COVID-19 as they possibly can, but they also will be faced with new pressures to adapt to shopping habits that will have changed significantly as a result of the pandemic.
Making things more difficult, the full impact of COVID-19 on consumer behavior may not be fully understood for quite some time. Will shifts in shopping and fulfillment preferences persist once the crisis subsides, or will entirely new behaviors emerge? We can’t know just yet how retail will be changed. What we do know, however, is that retailers — across all verticals, tiers and geographies — must focus on building trust and loyalty with their customers as storefronts start to reopen. They must deliver experiences that align to customer preferences and demands.
And while we can’t predict all the ways shopping and fulfillment behaviors will change, there are a few fundamental expectations that shoppers expressed before the pandemic that I do expect to remain relatively unchanged after it passes. Aptos’ Golden Quarter Consumer Survey analyzed the shopping behaviors and expectations of 4,000 consumers in the U.S. and the U.K. during the fourth quarter of 2019. While these insights were gathered under the context of the holiday shopping season, they may be relevant in the coming weeks as well, as it seems reasonable to expect that consumers’ heightened expectations during the holidays will be similar to their heightened expectations as stores start to reopen … and, of course, as we approach the holiday season once again.
If our assumptions are correct, then the data tells us that retailers should focus their efforts on optimizing the five Ps — price, presentation, promotions, promptness, and personalization — as COVID-19 recovery begins:
- Price: Price has always been a deciding factor for many consumers, and that's not expected to change in an economy that has been impacted by this global pandemic. Our data revealed that nearly two-thirds of shoppers will abandon their purchase if they can find the item cheaper elsewhere. While many shoppers were previously willing to pay a premium if retailers offered the right brand experience, during COVID-19 recovery retailers will be increasingly challenged to offer the right experience as well as a price that's palatable to a population that has recently experienced financial duress. And we fully expect heightened price sensitivity to last far beyond the immediate impacts of past-season inventory clearance events.
- Presentation: Retailers should expect customers to have a heightened awareness of store cleanliness moving forward. This is a trend we saw during the holiday season, with 44 percent of U.S. consumers indicating that they would leave a messy store to shop elsewhere. It's a safe assumption that an even larger percentage of consumers will prioritize store cleanliness once the lockdown has lifted and we return to stores. To gain customers’ trust when it comes to this aspect of their business, retailers should keep their stores extremely tidy and be highly transparent about cleaning procedures.
- Promotions: In-store offers are incredibly popular, with approximately 82 percent of the consumers we polled saying promotions encourage them to enter a physical store. Retailers should be prepared to utilize in-store promotions to their full advantage once stores reopen, taking into account the nuances of each customer segment, market, channel and location. Retailers will need to work extra hard to clear leftover inventory, and localized promotions will play a pivotal role in their ability to do so.
- Promptness: Prompt and flexible fulfillment was separating the retail leaders from the laggards before the global pandemic. Enter COVID-19, and flexible fulfillment became imperative, drawing a line in the sand between those retailers that could continue to transact and move merchandise and those that could not. During last year’s holiday season, 53 percent of U.S. consumers said buy online, pick up in-store (BOPIS) was their preferred fulfillment option. While BOPIS gave way to BOPAC (buy online, pick up at curb) during the lockdown period, we expect a multitude of omnichannel acronyms to gain ground in 2020. Case in point: consumers expect to be able to buy, receive and return products just about anywhere. And retailers’ (impressive!) scrappiness to enable new omnichannel and “contactless” use cases during the COVID-19 crisis only heightened shoppers’ expectations in this area.
- Personalization: Store associates are one of a retailer’s biggest investments and potential differentiators. Aptos’ research reinforces this, with approximately half of shoppers saying they would visit another retailer if they felt a sales associate was unhelpful or unavailable. During the COVID-19 pandemic, the world — rightfully so — began to see the value of front-line retail workers, recognizing that our society is dependent on these everyday heroes. As retail recovery begins, the associate role will continue to be an important one. Retail associates will more often be asked to deliver personalized experiences to shoppers in-store. While personalization has long been associated with e-commerce, new technologies — and the incessant quest for more data — are motivating retailers to better understand, individualize and influence shoppers’ brick-and-mortar engagements.
As the world sits in a holding pattern of grief and optimism, hope and uncertainty, we know that the retail industry will emerge on the other side of the COVID-19 pandemic. By focusing on what we can control — the five Ps — retailers will be better equipped to win customer loyalty as we enter the new normal.
That rings true no matter what the new normal might be.
Dave Bruno is director, retail market insights at Aptos, a provider of merchandising, commerce, customer and order management solutions for retailers.
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