Instead of a bustling, competitive market, retailers are about to open to a cautious audience, many of whom haven’t experienced non-essential shopping in months.
But how has a new reliance on online shopping changed the path to purchase?
Using data from our ongoing COVID-19 study, we observed how the outbreak has impacted the shopping landscape, and which consumer attitudes have changed as a result.
For bricks and mortar retailers looking to best position themselves against online shopping alternatives, this isn’t just the time to prepare, it’s the time to adapt.
Are consumers keen to return to physical stores?
The desire to shop hasn’t subsided, it’s just been put on hold.
In fact, emphasis on online shopping throughout this time may have contributed to a newfound eagerness to shop in-store once again.
Over half of all internet users from wave 4 of our coronavirus study fielded in May say they intend to return to the shops immediately, very quickly or quite quickly, having climbed from just over 4 in 10 in March’s wave 3 study.
Largely, it’s younger audiences who are most hungry to return to stores – over half of Gen Zs and millennials share this sentiment; but baby boomers aren’t too far behind – their intention has actually climbed at the same rate as Gen Z.
With older audiences generally considered to be at greater risk, a simple explanation for the gap between generations could be a concern for safety. But this isn’t necessarily the case.
Safety is a concern shared quite generally, with regular cleaning of public spaces (68%), social distancing measures (58%), provision of hand sanitizer (57%), and mandatory usage of face masks (53%) considered the all-round most important factors to individuals.
In fact, when asked about the importance of getting back to normal, 79% of baby boomers say it’s important that brands do so, with figures descending with age – compared to 73% of Gen Zs.
Instead, it’s more likely that older audiences’ enthusiasm for in-store shopping is tied to their lesser likelihood to shop online – 70% of baby boomers purchased a product online in the last month, behind the average 74% of internet users globally.
As older individuals are generally considered to be at greater risk of COVID-19, baby boomers are therefore more likely to be isolating with caution and show a stronger desire to be back to normal as a result.
But while the desire for shopping is present across all age groups, there are some notable caveats between markets.
In general, recovering countries or those less affected by the outbreak are more likely to express a desire to return to shops – such as Poland (72%) or Australia (66%) – while countries worst hit are less eager, such as Italy (38%) or Brazil (35%). Consumers in the latter appear to be more psychologically wounded by the outbreak, and less inclined to revisit shops as a result.
Though it’s likely in-store purchases are going to experience a rebound soon, it’s important to remember that online purchases aren’t likely to experience a sharp decline in response.
46% of internet users in wave 4 of our COVID-19 study say they’ll be shopping online more after the outbreak is over.
Convenience and variety have been key contributors to ecommerce’s growth, and the sheer enormity of sites available online is able to sustain shopping in this manner – even if everything returns to normal.
While this might seem disheartening for retailers expecting crowds of shoppers in the coming weeks, online shopping hasn’t gobbled up the competition in the absence of the high street.
The act of purchasing a product online has continued on the same trend we’ve seen for some time now – with the current figure (74%) mostly unwavering since 2017.
Retailers should bear in mind that, although online strategies are now essential if they’re to reach the full extent of their audience, it appears there’s an aspect of the physical shopping experience online sites can’t match.
The outbreak may have accelerated the growth of ecommerce, but online shopping isn’t cannibalizing retail – it’s complementing it.
Can savings and deals entice consumers back in-store?
The world economy is expected to shrink by over 3% in 2020.
Though select shopping behaviors are likely to increase after the outbreak, much of this growth is focused outside of the U.S. and Europe – regions expected to bear much of the economic damage in the immediate aftermath.
Across 17 markets, 30% of internet users agree that once the outbreak is over, the cheapest prices will influence them to purchase from brands.
The most prominent financial action taken by internet users in the 20 markets we surveyed is to delay big purchases (80% say this).
But just because consumers are delaying purchases now, doesn’t mean they weren’t already embodying a frugal mindset.
With 41% saying they intend to wait for discounted, promotional products, we can see a continuation of a cost-centric mindset that has been consistent in our research in the last few years – and with fears of a recession on the horizon – economic uncertainty has merely added another layer to these habits.
To appeal to these financially conservative consumers, brands can tie in promotions and discounts with extra services – such as collecting in-store. This not only builds on underlying desires to save money, but incentivizes use of features that consumers may previously have avoided.
The most likely to be affected economically, however, are younger generations. As Gen Z are already experiencing uncertainty and panic over their future, laying out financial support strategies for this generation is key.
One in 5 internet users in 20 markets say they’ll look for more flexible payment options in the future. For millennials, it’s 23% who express an interest in flexible payment terms, rising to over 1 in 4 for Gen Z – 31% more likely than the average.
Both Gen Z and millenials show high approval of brands offering this form of service, with 88% citing this.
Online & offline: a match made in heaven?
With individuals ready to return to stores, retailers can capitalize on the habits they developed in lockdown, without drastically altering tactics they employed before the outbreak.
For example, when asked what factors would most influence buying a product prior to the global outbreak, 15% of internet users cited click & collect delivery.
But when asked what they’ll be doing more of when the outbreak is over, 22% of internet users in 17 markets say “buying more things for in-store collection” – most prominently observed among millennials (26%), who are 19% more likely to say they’ll do this.
Not only does this service offer an additional means of attracting further customers, but increases the potential for customers to rack up further purchases as they come in store to collect their products.
Click and collect was, for a long time, most prominent in MEA, where 22% say this would increase their likelihood of buying a product – 50% more likely than the average.
As of wave 3 of our COVID-19 research, an increase in in-store collection can be observed in APAC (25%) LatAm (23%) and North America (15%) – the latter of which was twice as unlikely to cite click and collect prior to the outbreak (7%).
An increase in online research/browsing before going to stores further demonstrates the new role stores will play in the purchase journey as a result of coronavirus.
Over 1 in 4 internet users (27%) say they’ll be researching/browsing more items online before they shop in store.
Stores won’t be able to rely on out-of-home (OOH) advertising as much as they used to, so it’s up to online ads to do the heavy lifting here.
With 1 in 4 internet users discovering products via ads on social media, these platforms are fruitful touchpoints, where businesses can continue updating customers. And these sources are important when taking their shopping experience further – just under 4 in 10 internet users research products in this manner.
Where do we go from here?
The high street is sure to be a very different place, while ecommerce – having filled the void in the meantime – isn’t likely to decline in popularity.
Speculating on the future of retail, the Washington Post highlights how much of the shopping habits we had grown accustomed to are no longer achievable in a post-COVID world;
“Gone, they say, are the days of trying on makeup or playing with toys in the aisles. The focus now is on making shopping faster, easier and safer to accommodate long-term shifts in consumer expectations and habits”.
Even for the world’s biggest clothing retailer, Inditex, this is a rising challenge that has to be addressed, with the company announcing a $3 billion investment over the next three years to develop a “fully integrated store and online model”.
Citing a 95% jump in online sales from the same month last year – and up 50% in the first quarter of its fiscal year – Inditex said it expects online sales to reach more than 25% of total sales by 2022, up from 14% in 2019.
But these methods can only go so far, and for retailers that rely on a “try before you buy” consumer mindset, online strategies might pose an obstacle – at least in the beginning, before it’s understood how challenges can be met.
The beauty industry, for example, has started to ramp up its use of AR (Augmented Reality) in order to overcome the challenge, with MAC Cosmetics one of the latest beauty giants to jump in on the trend, launching a virtual try-on feature in partnership with the application, YouCam, which allows users to virtually apply and experiment beauty products before making a purchase.
By introducing measured means of attracting customers back in-store, rewarding customers with incentives or emulating the in-store experience online, businesses can begin their slow recovery, as the path to purchase adapts to a new normal.
