Tag: shopping behavior & demographics

Consumer Behavior Keeps Shifting Due to COVID-19 Pandemic – Part 2

Consumer Behavior Keeps Shifting Due to COVID-19 Pandemic – Part 2

In part one of our series, we looked at new data on emerging consumer habits due to the COVID-19 pandemic. In part two, we will be looking a little ahead. There have been new developments regarding the virus itself, with many experts fearing the possibility of it returning to the northern hemisphere in the fall. If that occurs, we could see the same trends that we’ve talked about before once again. However, this time we may be able to be proactive if restricted living policies are reestablished in the latter part of the year.

 

Online sales shift based on lockdown status

It’s still too early to tell, but the boost in e-commerce activity caused by lockdowns may be less permanent than initially predicted. Countries that have extended lockdown policies such as the UK or France have continued to maintain high e-commerce sales. In contrast, others like Denmark, where lockdowns have begun to ease, have seen a drop in e-commerce sales1. Even if this is the case, it is still uncertain if this will also occur in every country that is beginning to ease restricted living.

So, what does this mean for brands?

In short, those that benefited from the increase of online sales should not be complacent. After all, gaining customers is one thing, but retaining them is another. There are strategies that brands can use to retain as many shoppers as possible once limitations are lifted, including:
 
/        Engaging customer support

/        Enhanced loyalty programs

/        Increased promotions and discounts

/        Personalized shopping experiences

/        Improved communications

/        Extended returns
 
Take note from Vuori, an athletic apparel brand that used some of the strategies above to improve consumer engagement. Forced to close their stores due to the pandemic, they switched their attention entirely to e-commerce. To boost shop sales, Vuori offered discounts to consumers that shopped at their existing locations, while enabling them to shop for their favorite items online. Vuori also shifted their messaging to improve engagement, making it timely to align with the reality that consumers are facing today. Furthermore, they prioritized their web and mobile experiences2.

 

Preparing for the next COVID-19 wave

As many pandemics have done in the past, the COVID-19 pandemic may resurge in waves3. Whether these waves will be fueled by the lessening of restricted living and social distancing policies, or due to seasonal aspect of the virus, remains to be seen. However, when it comes to consumer behavior, brands may likely see similar trends repeat should there be a resurgence of the virus later in the year.

This means that brands must prepare for potential store closures and another bout of increased e-commerce activities. It would then be wise to follow Vuori’s example and focus on e-commerce and social media to maintain and improve engagement with consumers.

Brands like Vuori, however, had an advantage over other brands when the pandemic hit – they had embraced a D2C strategy early on, making it easier for them to focus on e-commerce and to move away from physical stores when the need arose. This initiative helped them naturally adapt to the changes brought by the pandemic.

Unfortunately, most brands are not yet prepared for e-commerce. A few months ago, only 17% of brand executives believed their organizations were leading competitors in e-commerce, and 71% said their businesses were merely catching up or keeping pace4. With everything that has happened since, more brands have taken a serious look at their e-commerce strategy. For those who don’t have anything in place, time may not be on their side.

 

Looking ahead

If the experts are right, the world may face another COVID-19 wave in the fall or winter on the northern hemisphere. Therefore, brands have a very short time to put a strategy in place and acquire the tools and capabilities needed for them to be ready on time. Furthermore, we must remember that it’s not just about benefiting from the increase in e-commerce activity borne from restricted living policies, brands must also implement ways to build and bolster customer loyalty and engagement if they want to retain them in the long run.

Consumer Behavior Keeps Shifting Due to COVID-19 Pandemic – Part 1

[Blog] Consumer Behavior Keeps Shifting Due to COVID-19 – Part 1

A couple of weeks ago, we looked at how the COVID-19 pandemic is impacting consumer behavior, specifically shopping habits. We discussed the differences in attitudes across age groups and genders. In this two-part series, we’ll look into the latest data on how consumer behavior is continuously changing, especially in countries that are still under stay at home or shelter in place orders.

New habits are being formed

Given the current global situation, it’s not surprising that there’s an increase in e-commerce orders. The spike since early March in the US and Canada has been significant—with online orders going up by 80% and buyers converting 8.8% more than the same period last year1. However, this isn’t unique to North America. Europeans are also placing more online orders, with pure-play e-commerce brands seeing an average increase of 40% to 80% year-on-year growth2.

To illustrate, take a look at Emarsys and Good Data’s interactive map tracking how Covid-19 is affecting consumer expenditure across the globe2:

Year-over-year growth rate of online transactions from ccinsight.org

* Year-Over-Year Growth Rate of Online Transactions

Furthermore, recent research indicates that the drastic increase in e-commerce sales may not only be attributed to the shift from offline to online in shopping. For example, there are consumers that have supplementary income or more time in their hands who are picking up new activities or hobbies to keep busy at home. This could become a growing factor contributing to the growth of online sales in the coming months3. If so, it could mean that new and lasting habits outside of shopping are being adopted by consumers due to the restrictions in place. This could be a positive development for some brands as this development may indicate a new or expanded consumer base – one that they will have to engage with if they want to transition them into long-term customers.

Contrasts across age groups

Our previous piece examined how different age groups have reacted to the pandemic, and found a stark contrast between them. However, more recent surveys show that ongoing restrictions are blurring the lines between age groups in some areas, such as how respondents are being financially affected by the pandemic4:

/        24% from the age group 30 to 44 years old

/        28% from the age group 45 to 64 years old

/        21% from 65 and older

That said, millennials continue to be the most cautious and concerned group when it comes to financial matters, with an Elon University4 survey finding that worries over “personal financial situation” still vary per age group:

/        80% from the age group 25 to 44 years old

/        78% from the age group 18 to 24 years old

/        74% from the age group 45 to 64 years old

/        62% of those 65 and older

Another poll found that 59% of millennials have taken or planned to take steps to save cash due to the pandemic’s effects on the economy.

We must remember that most of this research was gathered in mid-March in the US. This  period marked the beginning of the restrictive living phase across the country, and therefore, attitudes regarding financial stability and overall concerns about COVID-19 may have changed in the weeks after. However, it is important for businesses to follow these trends, as they will provide glimpses into the concerns and emerging needs of every age group after the social distancing restrictions end.

That’s it for part one! In part two we’ll look into other trends, including how e-commerce is being affected in countries that have started to ease their lockdown policies.