The retail sector has been especially hard hit by the coronavirus pandemic. The closure of physical stores has forced numerous retailers to file for bankruptcy and accelerated the so-called Retail Apocalypse. The big question is how retail will recover once the pandemic ends. The fact of the matter is that the future of retail will be determined by consumer behavior. The pandemic forced consumers, in many cases, to buy products online they would normally have purchased in brick-and-mortar stores. Retailers are now concerned that traditional consumer behavior will be permanently changed. To help determine whether that will be the case, Blue Yonder conducted “research into the changing habits of global customers since the COVID-19 pandemic started last year. 7,000 consumers were surveyed in total across Europe and the US. 6,000 European adult consumers, and 1,000 in the US, have had their habits and behavior analyzed in a survey as Blue Yonder looks to discover how retail supply chains look set to be transformed in the coming years. The outbreak of the coronavirus has accelerated the rate of evolution in many cases, with online retail being the only option for consumers in a number of scenarios.”[1] Blue Yonder isn’t the only organization trying to figure post-pandemic  consumer behavior. Below are some of the consumer trends subject matter experts believe will have lasting impact on the retail sector.

Post-pandemic consumer trends

Online sales will increase at an accelerated rate. The percentage of consumers shopping online was already increasing before the pandemic. The health crisis only accelerated this trend. Blue Yonder found, “Across both regions … the grocery retail sector has been impacted heavily by the increasing number of consumers ordering products online. 74% of US consumers were doing more online shopping in April, up from 57% in March. … In Europe, 64% of shoppers intend to continue spending online once the pandemic is under control. 19% of the respondents said they will visit grocery stores less than they previously did, with the figure rising to 27% for non-grocery stores.” Jaime Lee reports, “[The pandemic] created a surge in online shopping and the mass adoption of digital-based shopping consumer behaviors, such as curbside pickup, grocery, and restaurant deliveries, and BOPIS (buy online, pick up in-store). According to a survey by Global Web Index, nearly 50% of respondents say they won’t visit stores ‘for some time’ or ‘for a long time.’ While it’s reasonable to expect that consumers will return to brick-and-mortar stores after restrictions ease, it’s also safe to assume that in-store visits will be reduced overall, perhaps even into next year, as consumers wait to see how the situation pans out.”[2]

Consultant Kian Bakhtiari (@KianBakhtiari), founder of The People, concludes, “The shutdown of physical stores has forced consumers to question their deep-seated shopping habits. People who had previously been reluctant to shop online are setting up online accounts and experiencing an entirely new customer journey. And once they get a taste for online convenience, they may never go back to their old ways. For a long time, e-commerce has been eating away the heels of offline retail. But the global lockdown has accelerated an existing trend that has been on the horizon for decades.”[3]

Spending allocation will change. Selena Zhu, Maxime C. Cohen, Saibal Ray, academics from McGill University, explain, “Given the widespread reduction in income levels and stay-at-home restrictions, many consumers have elected to decrease their discretionary spending and allocate more money to staple products, such as household necessities and groceries. For instance, Accenture’s COVID-19 Consumer Pulse survey found that 34% of consumers are purchasing more personal hygiene items, 21% are buying more canned food, and 17% are purchasing more fresh food. On the other hand, 13-29% of consumers have reduced spending across multiple discretionary categories, including fashion, beauty, and consumer electronics.”[4] Some of these spending decisions are likely to persist even after the pandemic ends. Renata Akers (@Renakers) reports a survey conducted by Astound Commerce agreed with Accenture’s findings. She writes, “Panic buying focused on nondiscretionary products needed to sustain governmental shelter-in-place orders, including shelf-stable food items, healthcare products and cleaners. In the U.S., discretionary items such as apparel and travel saw declines in purchasing week-over-week of 120 percent and 54 percent, respectively.”[5] Journalist Joan Verdon (@JoanVerdon) adds, “Coronavirus is introducing a new generation of shoppers to stock-up and buy-in-bulk shopping.”[6]

Retail reactions

Cleaner, no touch stores. Jessica Testa (@jtes) and Elizabeth Paton (@LizziePaton) write, “When department stores reopen their doors, … new and unfamiliar sights await: hand-sanitizer dispensers scattered on every surface, employees smiling through their face masks, signs displaying checklists of ‘what we’re doing to keep you safe.'”[7] Things retailers are likely to do keep consumers safe, they write, include, “Employees will wear face masks and submit to health screenings; some store layouts will be reconfigured to create more space and promote one-way traffic flows; customer capacity will be limited; stores will be cleaned more often; hours will be reduced; hand sanitizer will be liberally available; in-store events or any services requiring close contact (beauty tutorials, bra fittings) will be suspended or adapted.” Ben Unglesbee (@Ben_Unglesbee) reports the Retail Industry Leaders Association (RILA) has provided a blueprint for retailers to follow when they reopen.[8] The plan “includes detailed plans for occupancy limits, disinfecting, protective gear, contactless payment, health screening and keeping customers and employees apart by at least six feet (such as by rearranging breakroom seating).” Richard Carufel (@BulldogReporter) reports sales and marketing agency Acosta suggests a few rules of engagement by which grocery retailers should abide.[9] They are:

• Focus on people first, namely shoppers and staff, and ensure enhanced safety by enabling no-touch transactions, like self-checkout and Apple Pay.
• Recognize changing shopper attitudes and behaviors and adapt quickly by offering assorted comfort foods and snacks in addition to essentials.
• Ensure the retail digital shelf and e-commerce strategies are prepared for the accelerated shift to online grocery demand.
• With staying at home likely remaining strong in the months post-COVID, provide convenient shopper “solutions” centered on meals and self-care.
• Accommodate lower-income shoppers who are getting relief to buy food via stimulus checks; they may be looking to trade down and leverage promotions.

Enhanced customer experience. Once stores re-open, they will need to entice consumers to come through their doors. Enhanced customer experiences are one way to do that. Virtual and augmented reality experiences may be a part of their strategies. Verdon writes, “The crisis will make retailers look for more ways to deliver virtual experiences, and to interact with shoppers online, rather than focusing primarily on drawing crowds to their stores.”

Pick-up and delivery options are likely here to stay. Akers asks, “As the initial shock of this pandemic wears off and shoppers settle into this new normal, what do these behavioral changes mean for retailers?” She notes, “72 percent of U.S. shoppers indicated an intentional shift towards contactless interactions. This resulted in shoppers using more omnichannel services such as store pickup (U.S. up 44 percent) and delivery of food and groceries.” Consumers have found options like BOPIS or curbside pickup convenient and safe during the pandemic. They have also found delivery services useful. These options are likely to be continued by retailers.

Increased direct-to-consumer channels. Bakhtiari notes, “With the closure of physical stores, brands are increasingly pivoting to a direct-to-consumer (D2C) business model. D2C brands have a simplified proposition that cuts out retailers — selling directly to consumers through mobile and digital channels. Since the pandemic, a host of traditional FMCG brands have sprinted towards a D2C proposition. New entrants include Kraft Heinz with Heinz to Home and PepsiCo with Snacks.com.”

Concluding thoughts

Akers concludes, “Retailers should use this time of uncertainty as an opportunity to assess its customers’ journey from the on-site user experience down to the last mile.” Lee agrees. She writes, “For companies in all industries — not just those that were hardest hit — it’s now time to start thinking about how business should be conducted differently in the post-coronavirus era.” No one can unerringly predict the future, but retailers do know their fate rests in the hands of those they serve.

Footnotes
[1] Jack Grimshaw, “Blue Yonder: Global Shopping Behaviour Has Changed Since COVID-19,” Supply Chain Digital, 14 May 2020.
[2] Jaime Lee, “Consumer Behavior: 13 Post-Pandemic Trends to Watch,” AdRoll, 21 May 2020.
[3] Kian Bakhtiari, “How Will The Pandemic Change Consumer Behavior,” Forbes, 18 may 2020.
[4] Selena Zhu, Maxime C. Cohen, Saibal Ray, “Consumer Behaviour in the Post-Pandemic Retail Landscape,” McGill Delve, 2 June 2020.
[5] Renata Akers, “Consumer Behavior: Now and Post Coronavirus Pandemic,” Total Retail, 21 April 2020.
[6] Joan Verdon, “Will Coronavirus Drive Permanent Shifts in Shopping Behavior?” U.S. Chamber of Commerce Co, 25 march 2020.
[7] Jessica Testa and Elizabeth Paton, “Will Shopping Ever Be the Same?” The New York Times, 11 May 2020.
[8] Ben Unglesbee, “As states grapple with reopening, retail industry thinks it has a ‘blueprint’” Retail Dive, 12 May 2020.
[9] Richard Carufel, “Retail insights into new behaviors and a peek at post-pandemic life,” Agility, 29 April 2020.