It’s fair to say there’s nothing quite like a global pandemic to really disrupt consumer behavior.
As well as the very real human cost, lockdown and everything that came with it caused endless issues for brick-and-mortar stores, with budget cuts, shop closures, and market volatility putting pressure on many retailers to adapt or die.
At the same time the growing reliance on ecommerce brought its own issues for real world retailers, with Amazon struggling to fill large numbers of driver vacancies in the U.S.
So, what exactly has changed, and what do retailers and brands need to know to succeed in these strange times? Without further ado, here are five key online shopping trends that are shaping retail right now.
1. Older consumers are coming of age online
In the UK, internet sales as a percentage of total retail sales peaked at a record high of 37.1% in January 2021 during the winter lockdown. While this has since fallen to 25.9%, it’s still 4% higher than the pre-pandemic peak. With online sales increasing over the last 18 months, it’s important to understand how things might change moving forward.
GWI Zeitgeist research drawn from across 5 markets shows nearly a quarter of male consumers and a fifth of female consumers think they’ll shop online more in the future. There are interesting trends across age groups too; our global Core data set shows boomers are 17% more likely to shop/browse for products online than Gen Z consumers, challenging common misconceptions about digital shopping among older people.
Retailers need to closely monitor this as older consumers are the group making most online purchases in many areas.
For example, boomers who shop online are 10% more likely to have purchased medicine or healthcare goods online in the last month. In fact boomers are a massive 90% more likely to purchase medicines or pharmaceuticals, and 32% more likely to purchase pain medication, compared to the average online shopper.
This makes sense as the target market for healthcare products is older anyway. But there are cases where older consumers over-index for purchases, even in categories usually associated with younger generations.
Millennials are the most likely generation to purchase all types of alcohol online although there are exceptions; boomers are 75% more likely to purchase white wine, and 39% more likely to purchase red wine online.
With brand discovery channels segmented between product, age, and location, there’s a great opportunity for retailers and brands to engage older consumers online and at scale.
2. Online groceries are booming
With restrictions on venue capacities over the last 18 months and shoppers discouraged from purchasing in-store, consumers were forced online for all levels of purchases. While many industries suffered, there were some notable winners too.
Ready-to-eat food delivery definitely thrived as a key online shopping trend, with data from McKinsey showing the U.S. market to have doubled during the pandemic. It was a similar story in the UK, where 89% of internet users shopped with Tesco, the country’s largest supermarket chain, either in-store or online (not exclusively). As a result Tesco doubled the size of their online presence during the pandemic.
However, the boom in home-delivered groceries also caused major global issues, with suppliers failing to meet a rapid increase in demand for products and delivery as lockdown restrictions kicked in. Issues were eventually addressed through a combination of temporary hires, purchase caps, and the gradual removal of enforced social restrictions.
Currently we’re starting to see changes in engagement for supermarkets that struggled to adapt to online ordering and delivery of groceries. UK online grocery shoppers are 18% less likely to shop at Aldi, and 19% less likely to shop at Lidl in-store or online. While the big four UK supermarket retailers all have home delivery services, Aldi relies on a third-party partner, and Lidl are currently without any home delivery service.
In certain cases, “in-store only” might be a key part of a supermarket’s selling proposition and provide better value, however, our data suggests new online preferences are having a significant impact on brand loyalty.
3. Younger consumers are driving social commerce
It’s hard to avoid social media when talking about online shopping trends. With social platforms regularly adding new features and ways for users to connect, there are more opportunities than ever for brands and consumers to interact. Social commerce in particular is a shopping experience that takes place directly on a social media platform, and can include links that lead to a retailer’s product page with an instant purchase option.
For Gen Z online shoppers, social media ads are the most popular channel for new brand/product discovery. These young consumers are 36% more likely to discover new products or brands through social media ads than boomers who shop online, with growth in social commerce and influencer marketing being key contributors.
Our Zeitgeist research across seven markets shows how consumers relate to different groups of people on social media. For younger consumers, friends/peers are the most relatable group. However, while millennials rate family members second, Gen Z online shoppers believe celebrities are more relatable on social media.
This has important implications for influencers as:
35% of Gen Z online shoppers have watched a vlog or influencer video in the last week.
This high level of engagement is important, and not just for potential brand partnerships; as an article from Forbes explains, influencers themselves can benefit greatly from own-branded products.
4. More consumers are using more devices
Over the last few years, smartphones have become embedded as the consumers’ preferred channel. Switched-on retailers have evolved their web presence and advertising as a result. The challenge for them now isn’t adapting to the next big device, it’s thinking about the many internet-connected devices consumers now own and how they interact.
In recent years, consumers have moved from a “PC or mobile” set-up into one that takes in multiple devices – from smart home products to games consoles. The number of consumers using more than 5 devices to get online has increased 19% since 2019, a trend that’s taking hold across all age groups. As a result, it’s never been more important to offer a seamless user experience across different devices and touchpoints.
When online shoppers use these devices to research products online (and 57% do), it has a clear impact on what they look for when they visit a store. Online shoppers are more likely to want convenient shopping hours, limited interactions with staff, and self-checkouts.
They want to go in, get what they want, and get out – all at a time of their choosing.
QR codes, which became commonplace during the pandemic, are another useful tool for blending physical and digital footprint, whether it’s a restaurant linking to their menu or a retailer offering augmented reality (AR) options. Use of QR codes peaked in Q4 2020, before vaccines changed the COVID situation; since then their use by older groups has climbed significantly, to the point where they’re now well established.
Walmart, visited weekly by 34% of U.S. online shoppers online or in-store, has taken advantage of the rise of AR, using it to connect influencers and livestreams with shoppable content.
The retail giant claims that after hosting a shoppable livestream on TikTok in December 2020, they boosted their platform followers by 25%. Social media has long been key for exposure; now it’s coming into its own for ecommerce and product discovery thanks to live content and integrations.
5. Older consumers have data privacy concerns
Our final online shopping trend concerns data privacy, an issue for business and consumers alike. You might think that groups who are more active online would be more aware of potential risks around privacy; our data suggests the opposite.
Despite having greater privacy concerns, in-store shoppers are 11% less likely to use ad-blockers regularly or often compared to online shoppers.
Data privacy concerns certainly exist among in-store shoppers, but in the U.S. older online shoppers are more concerned about secure payment processes. In fact they’re 73% more likely to mention secure payment processes as a positive reason to shop with a particular online retailer compared to Gen Z.
One consequence of this is that online retailers who want to encourage brand advocacy with older consumers need to clearly explain why they’re collecting their data, and what rights site visitors have.
Exactly the same lessons apply for online retailers who want to encourage new consumers of any age to shop online.