Retail consumer behavior is changing at unprecedented speed
The COVID-19 global pandemic is having a profound impact on consumers’ lives. As stay-at-home orders and country-wide lockdowns start to be eased, consumer behavior continues to be driven by new personal circumstances, such as changes in discretionary income and spare time, and reconsidered values and priorities.
In our new research, we monitor the changing attitudes, behaviors and habits of consumers worldwide, as they adapt to a new reality. We explore what consumers are buying and how they are shopping, and which of these changes are likely to continue in the longer term.
Retail consumers adapt to new personal circumstances
Changes to disposable income and available leisure time are influencing consumers’ attitudes, behaviors and purchasing habits. For example, 33% of consumers are finding themselves ‘financially-squeezed’, with less disposable income compared to before the crisis, and are shopping more cost consciously, whereas 26% (the ‘Resource-Rich’) have increased both their disposable income and free time, and are enjoying new leisure pursuits.
In markets where the pandemic is stabilizing, economic concerns remain high, denting consumer confidence. And although fears about health are gradually subsiding, consumers remain uncomfortable about visiting public places, although they are relatively more comfortable with familiar places such as grocery and pharmacy stores.
Retail consumers adopt conscious and mindful purchasing habits
Consumers are more mindful than ever about what they are buying—and it’s a mindset that’s likely to continue. The majority (75%) are limiting food waste, and 67% are shopping more health-consciously. In both cases, 90% of these consumer groups are likely to continue with these habits.
Demand for local goods is growing, as consumers seek out products they feel they can trust, and efficiency is also on consumers’ minds, as they are doing fewer and larger shopping trips. Overall, there are 10 consumer trends impacting goods purchased.
Retail consumers embrace digital commerce and omnichannel
With lock-downs in place and many stores shuttered, ecommerce has surged. Adoption has accelerated from previously uninitiated users, especially in under-penetrated categories such as grocery. Consumers have also increased their use of omnichannel services like contactless payment, social commerce, virtual consultations and curbside pickup. It’s new behavior that they plan to continue.
Retail consumers find creative ways to fill their time at home
With more time spent at home, consumers are engaging in new or renewed activities during their spare time. More than half (62%) are trying new recipes, 51% are spending time on home improvements, and 48% are embarking on new skills or online education. In each case, the vast majority expect to continue with these activities.
Families are welcoming the opportunity to spend more time together, and new ways of socializing are gaining in popularity as people connect virtually. With the switch in many cases to working from home, employees have embraced their new environments and many expect to continue or increase their time spent home working in the future.
Building consumer confidence with responsibility and resilience
The retail industry has experienced major disruptions in the past, but consumer preferences and shopping patterns have never shifted so quickly. As well as changing how they shop, the reasons why consumers shop has also changed forever. Retailers need to draw on data-driven insights to renew their relationship with consumers.
Responsibility to employees and consumers has taken on a new significance. When it comes to restarting the economy, the near-ubiquitous lack of consumer confidence will pose an enormous challenge. Retailers need to build trust with consumers, such as implementing visible safety and hygiene measures for staff and customers in stores.
With the rise of the conscious consumer, and the intent to make environmental and ethical purchasing decisions, retailers need to build sustainability into the core of their businesses, and look for new ways to grow.
Retailers need to improve shopping efficiency, both online and offline, and be ready to respond to rapidly shifting needs as the pandemic evolves. The increased use of digital requires retailers to substantially increase their investment in omnichannel capabilities.
Retailers have an opportunity to reset and rebuild their businesses. How they help consumers to get through the now and next of the pandemic will influence their success in the years ahead.