COVID-19: Impact on CPG and Retail, Part 2
To read part one of this multipart series, click here.
We're now more than two months into the COVID-19 pandemic, and with that, we’re seeing a new wave of changes in consumer behavior. Many consumers are becoming more accustomed to our current way of life, while also anticipating what shopping will look like for them once this crisis subsides.
Among the new trends emerging are the prioritization of comfort foods over pantry and paper products for the first time. In our latest survey on the impact of COVID-19, shoppers reported sweets, frozen pizza and salty snacks topped their shopping lists.
On the other hand, we’re also seeing trends solidify, with e-commerce continuing to rise in popularity and in-store trips continuing to decline. This is in direct correlation with rising concern over the virus, especially among older households and those in hardest-hit areas. In line with recommendations from the Centers for Disease Control, shoppers are making 52 percent fewer store trips.
The COVID-19 pandemic is likely to have a lasting effect on e-commerce as its popularity continues to grow. According to our latest shopper survey, in a four-week period ending April 7, 51 percent of shoppers placed an online order. Furthermore, 33 percent made their first ever online grocery order during that four-week period, up 5 percent from our previous report. What’s more, 75 percent of online shoppers said they were very or extremely satisfied with their online grocery experience.
Will all of those new online shoppers continue to get their groceries that way forever? We asked shoppers to look into their crystal balls and predict what shopping will look like for them once this is all over. Thirty-one percent of shoppers said it’s extremely or very likely that they will more do online grocery pickup or delivery than they did before.
Other forecasts into shopper behavior were decidedly mixed. While 47 percent of shoppers said it’s extremely or very likely that they will make less trips to the grocery store and stock up more when they do go, 68 percent said it’s extremely or very likely that they will revert to their pre-pandemic grocery habits. Furthermore, while 58 percent of shoppers say it’s extremely or very likely that they will return to the same eating out routines they had before, 56 percent said it’s extremely or very likely that they will eat at home more than they used to for a while.
So, what does this all mean for retailers? One priority should be ensuring retail digital shelf and e-commerce strategies are prepared for this accelerated growth and sustained demand.
Lifting shoppers’ spirits should also be another area of focus. Graduations and birthdays must still be celebrated, and grilling season has officially arrived. Retailers should be sure to offer an assortment of comfort foods and snacks in addition to essentials, and with staying at home likely remaining strong in the months post-COVID, stores should provide convenient shopper "solutions" centered on meals and self-care.
Lastly, retailers should continue to accommodate shoppers’ needs in regards to both safety and finances. Stores should enable no-touch transactions whenever possible, like self-checkout and Apple Pay, to ensure in-store shopper safety. Also, it’s important to keep in mind that lower-income shoppers are always the hardest hit. Many may be using stimulus checks to buy food and other essentials, and they will likely be looking to trade down and leverage promotions on groceries for the foreseeable future.
The COVID-19 pandemic certainly has the CPG industry on its toes. It remains as important as ever for retailers and brands to recognize changing shopper attitudes and behaviors, and adapt quickly to meet their needs. For now, they’re doing an incredible job rising up to the challenge.
Colin Stewart is executive vice president of business intelligence at Acosta, a leading full-service sales and marketing agency in the consumer packaged goods (CPG) industry.
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