This article is part of Raydiant’s Consumer Behavior series which interviews top industry experts to better understand the effects that the COVID-19 pandemic is having on consumers, how businesses can adapt to these changes and how it will shape shopping experiences in the future.
The following is an interview we had with Gwen Morrison, CEO of The Store, WPP’s Global Retail Practice (retired)
How has consumer behavior evolved over the past 5 years?
GM: Wow- 2015 seems like ten years ago! Many consumer segments have changed how they shop. With access to online for discovering, learning, seeking “influencer” recommendations, and e-commerce access to most goods, the cadence of visits to brick and mortar stores has been shifting. For example, many markets throughout the world were already seeing the decline of trips to department stores.
I recall a Yale fellow who five years ago warned an international group of department store executives that young consumers would never “age-into” the customers they knew how to serve.
New marketplaces offering both goods and services hit the scene. The consumers became “mobile-first” shoppers. Over the past five years, consumers have adopted voice as part of their rituals. Voice assistants were first used to access information. Many consumers are using voice to build their shopping carts, so conversational commerce is accelerating.
In addition to this backdrop of accelerating use of technology, consumers have over the past few years demanded transparency in everything. From ethical sourcing to sustainable practices, they are more values-driven than ever before. The power of social media amplifies the demand for social responsibility and expectations for ethical corporate behavior.
What are the biggest consumer behavioral changes you’re seeing due to COVID-19?
GM: Navigating a “stay at home” directive has been extremely stressful for consumers, especially those in urban areas. Their initial panic buying demonstrated fear of the unknown. This of course led to the out-of-stocks of essentials, which was alarming and frustrating to shoppers. Then came the financial fears.
Just looking at the US timeline, we see job losses beginning to rise sharply mid-March. By April and into May, we see consumers cutting back, postponing purchases, and really just buying for the near-term.
With the global health crisis, consumer adoption of on-line purchasing has accelerated. The industry has seen rapid growth both in-home deliveries and click and collect. On a side note, with the knowledge of supply issues, consumers have been more welcoming to substitutes so it’s been an interesting opportunity for lesser-known brands. Many more affluent consumers are embracing the many subscription offers in food and beverage categories including meal kits and specialized assortments. Again, these introduce consumers to new products they might try for the first time.
Also, of interest is the uptick in use of digital voice assistants – one firm released data a few weeks ago that showed that the use of Amazon Alexa had more than doubled since March 1st.
How can brick and mortar retailers adapt to these changes?
GM: In times of disruption, it’s always important for retailers to help rebuild the community.
I see two equally important challenges. One is to help society adjust. Retailers see the needs of their community’s day in and day out. They can take action that enables consumers to heal and rebuild. In China, we’ve seen Alibaba, JD.com, and Tencent take on recovery roles. From helping displaced workers, offering community guidance apps, and extending counseling.
So, helping people get back to work and school (whether physically or virtually) as well as re-establishing compromised supply chains are actions retailers can take to help restore the communities they serve.
On the safety and hygiene front, retailers need to take protective measures and frankly re-evaluate their formats overall. Spacing between shoppers and employees, procedures that reduce contact, use of voice technologies that help minimize touch are all areas to evaluate.
Format innovations such as Amazon Go’s cashless check-outs seemed a novelty just six months ago. Now that technology will be essential. Incorporating hyper-local geo-fencing tools into shopping apps allow retailers to identify customers entering their parking lot or storefront. These tools must be linked to their online orders and assure them a place in line – without standing in line as we’ve seen in photos from around the world.
What behavior trends should retailers be focused on?
GM: As I mentioned above, the post-outbreak consumer will continue to be cautious. So, hygiene and safety on all levels is paramount. They should also be sensitive to how shoppers want to minimize their trips and use time in the store more efficiently. Having inventory easily visible and in stock is critical.
Curating content that helps shoppers accomplish their goals is another area to focus on. While in isolation, consumers tackled home improvement projects, from their closets to enhanced outdoor living spaces. People aspired to cook new dishes, learn new things. On social media, we saw Pinterest boards on how to celebrate Easter and graduations at home. Retailers can provide inspiration that in turn elevates their relationship with shoppers.
What will the consumer shopper of the future look like?
GM: As shoppers have accelerated their use of mobile platforms, online purchasing and touchless payments, they will demand that these tools work seamlessly together. New forms of access to goods and the connection of physical and digital experiences will continue to evolve and scale. Shoppers will expect more from every touchpoint leading to purchase. They will also think differently about shopping for everyday replenishment items versus inspiring, tactile products- be it food, lifestyle, or fashion. Shoppers won’t want to navigate aisles of products that can be fulfilled weekly or monthly. They’ll seek personalization, inspiration, and experiences that humanize a Store of the Future that is more automated and safe.