COVID-19 has undoubtedly changed the way consumers shop and over the course of a few short weeks at the beginning of the crisis, retailers responded quickly to meet their shoppers’ needs and expectations. Retailers made major adjustments to their stores to adhere to physical distancing guidelines, hygiene standards, changing behaviors and norms, and more. Now that consumer behaviors are settling as people around the world learn to live with a pandemic, we’re starting to see the ways that shoppers’ behaviors have shifted and what those changes could mean for the future.
So far, what’s changed?
- Online shopping: E-commerce is booming; to get an idea, just look out your window and observe the number of delivery trucks that go by in an hour. According to data from McKinsey, most categories have seen more than 10% growth online, and categories like groceries, household supplies and over-the-counter medicine have grown over 35%. Data from the June 2020 Brick Meets Click/Mercatus Grocery Shopping Survey shows online grocery grew over 9% from May to June to hit a record setting $7.2 billion in sales and according to Forrester’s July 2020 report, “The State of the U.S. Shopper – COVID-19” , 21% of U.S. online adults bought groceries online for the first time due to the pandemic.
- Contactless payments and shopping: Cautious about returning to physical retail locations, shoppers are trying to minimize physical contact in stores to avoid getting sick. As a result, technologies that allow shoppers to minimize physical touches in a retail store or avoid them altogether have been adapted exceptionally well. Experts predicted that contactless shopping would be utilized at today’s rates in five years, and that is likely to continue: According to data from Forrester, 35% of U.S. online adults who started using digital or contactless payments during the pandemic said they expect to continue to do so once stay-at-home restrictions are limited.
- Shopper behavior in stores: Consumers are still worried about contracting COVID-19 and while data from Deloitte shows that over half of U.S. shoppers feel safe going into stores, the way they behave inside of the store is changing. In the early stages of panic-buying in March and April, foot traffic in retail stores decreased, and basket sizes and conversion were up. Shoppers still made their purchases in physical stores, but made fewer trips with larger basket sizes, presumably to stock up on essentials and minimize time in stores. Now, shoppers are starting to take fewer trips to stores, buy less and gravitate toward value items; behavior that is indicative of a recession.
How will retail continue to adapt?
While it’s tough to predict exactly what retail might look like as retailers continue to adapt to COVID-19, a few major trends are emerging that are hinting at how retail might continue evolve to serve customers:
- Curbside pickup and other low-touch shopping methods (like scan & go and buy online pickup in store) are expected to remain popular. After a learning curve, shoppers tend to stick with shopping methods that make their lives easier, and these convenient methods are designed to do just that. Curbside shopping may experience a slight dip in utilization initially when the pandemic is over but will likely be used at higher rates than before. To further diversify BOPIS delivery options for shoppers, retail lockers may continue to gain traction at retail stores.
- Retailers must implement scalable solutions for long-term success. While home delivery and third-party shopping and delivery services are convenient for shoppers, they can be expensive and hard to scale for retailers. And as customer data becomes more valuable than ever, retailers will want to ensure they have access to as much of that information as possible to offer promotions, coupons and loyalty perks to their customers.
- Retailers may increasingly decide to optimize their under-used physical stores as micro-fulfillment centers. As many shoppers continue to stay at home, two-day shipping has become a normal delivery timeline and shoppers are more willing than ever to switch brands to get the products they need, retailers will need to find ways to serve their customers where they are – at home. Micro-fulfillment uses small, highly-automated warehouses near the end customer to reduce the cost and time of goods and delivery, and as social distancing guidelines, capacity restrictions and reduced foot traffic have changed the role of the physical store, more retailers may invest more heavily in last-mile delivery methods using their own infrastructure.
While the way shoppers shop and interact with retailers has changed, their most fundamental needs have not; shoppers still want engaging, personalized experiences and to get the products they’re looking for safely and conveniently. With new strategies and optimizing technology solutions, retailers are delivering these experiences and in order to succeed, will need to continue to listen to their customers and make improvements with scalable, flexible systems and solutions.
