COVID-19 Consumer Habits: A Look at Shifting Retail Trends

It’s been three months since COVID-19 was officially declared a pandemic by the World Health Organization, and the world is continuing to adapt to what many are calling the “new normal.” All types of industries have been affected by the crisis, but retailers specifically are in a tough spot: consumer behavior has shifted seemingly overnight due to mandatory brick-and-mortar store closures, general fears of the virus, and Great Depression-level unemployment rates.

Blue Yonder recently conducted two 1,000-person U.S. consumer surveys — one over March 18-19, 2020, and one over April 17-18, 2020 — to identify changes in consumer sentiment month-over-month. Unsurprisingly, as the crisis raged on, so did consumers’ shopping habit shifts.

Consumers Tighten Budgets

• 68 percent of consumers in April indicated they spent less because of the pandemic, up from 49 percent in March (a 39 percent increase); and
• 35 percent of consumers indicated they spent significantly less in April, compared to only 22 percent in March (a 59 percent increase).

Like March, most survey respondents (61 percent) who spent less in April did so because they were still wary of venturing outside their homes, preventing them from making in-person purchases. Although retailers are beginning to reopen their stores, it’s clear that consumers may not be comfortable venturing out into the public yet.

However, while consumer spending decreased month-over-month, online shopping saw significant gains.

E-Commerce Continues to Thrive, But Consumers Still Prefer In-Store Grocery Shopping

• 74 percent of consumers in April did more shopping online as opposed to in-store because of COVID-19, compared to 57 percent in March (a 30 percent increase); and
• similar to last month’s results (68 percent), 69 percent of consumers continued to shop in-store for their groceries in April.

Malls were already suffering before the COVID-19 pandemic forced them to temporarily shut their doors, driving remaining mall-goers directly to e-commerce sites. For example, as the crisis ramped up, Amazon.com received so many orders that it hired 100,000 extra U.S. workers (and counting) to deal with the increased demand. If consumers continue shopping online at the rates they’ve been during the pandemic, there will be a continued shift toward using vacant mall space as in-market pre-positioning space for delivery arms like Amazon. Retailers will also increasingly begin to utilize “dark stores” — i.e., facilities exclusively dedicated to the fulfillment of online orders.

Grocery Delivery Services Work Through Issues

• 38 percent of respondents indicated they’ve attempted to have their groceries delivered during the COVID-19 crisis
  • 68 percent of these respondents successfully had their groceries delivered
  • 54 percent of respondents experienced a delayed grocery delivery order, with 28 percent stating their delivery was delayed by more than three days
• 39 percent of consumers say they're either likely or very likely to use grocery delivery services in the future.

While most consumers (69 percent) still prefer to shop in-store for groceries, many have tried grocery delivery services during the COVID-19 pandemic. However, delayed orders and difficulties securing delivery slots could push shoppers away. It’s crucial to ensure that consumers have pleasant experiences with such services to turn casual users into die-hard adopters (aka continuous repeat customers). In a world where people have become accustomed to receiving packages in only a day or two, consumers who fail to secure grocery delivery windows will simply go out and shop in-person for their grocery needs.

While consumer spending is down overall, e-commerce is experiencing a massive boom, and it’s up to retailers to work through any kinks to ensure their online experiences are as smooth and consumer friendly as possible. As we enter a new phase of the COVID-19 pandemic, where brick-and-mortar locations begin to slowly reopen, retailers that pay close attention to consumer behaviors, and therefore adapt their operations to fit such behaviors, will be best prepared to successfully weather the storm.

JoAnn Martin is vice president of industry strategies at Blue Yonder, which empowers world-leading companies through a seamless end-to-end commerce experience enabled through AI and ML, providing companies the ability to predict, plan and fulfill demand through a modern, responsive and synchronized supply chain.