Though spending was up in June, many regions within the United States are experiencing COVID-19 case spikes. People are learning right now how to use the experience they’ve had with COVID’s initial disruption and apply it to another restricted existence.
New claims for state unemployment benefits exceeded one million for the 17th consecutive week. Congress is back in session negotiating a new stimulus package, but the country has yet to see what that will entail. The election is now on the near-term horizon.
How is this uncertainty affecting consumers, and consumer behavior trends?
We’re discovering how resilient our society can be through this uncertainty, in real time.
SIA’s Consumer Behavior Pulse continues to meld national trends with the unique world of specialty brands and retail. A recent piece by Retail Info. Systems (RIS) shares eight consumer trends that underpin the directional behavior changes in our world. Trends that are here to stay, and trends that retails need to adjust to as they continue to work through COVID-19.
- The convenience factor. BOPIS (buy-online-pickup-in-store) and BOSS (buy-online-ship-to-store), continue to gain popularity with consumers – it’s safe to say that this will be part of consumer expectation going forward.
- Walmart announced a new membership service this week, Walmart+. The subscription service goes head-to-head with Amazon Prime, and costs $98 a year. It includes perks like same-day delivery of groceries and general merchandise, as well as fuel discounts at Walmart gas stations, and access to product deals. Consumers will continue to be trained to want the highest level of convenience, and the least amount of friction, as another retail giant steps in to set new expectations.
- New tech. Shoppers are now open to trying AR and VR to try out glasses, clothing, makeup, and even furniture. For example, IKEA’s AR app allows customers to visualize furniture, kitchen designs, etc. in their home, to judge sizing and style, before they purchase it.
- Contactless payment options. Payments have moved online, thanks to Apple Pay, PayPal, and Venmo, making transactions contactless, and seamless.
- Consumers have – and will continue to spend – more on necessities. At the same time, Ernst & Young predicts that COVID-19 has led to the emergence of the Cautiously Extravagant consumer segment — 25% of consumers who will take advantage of access to certain goods they might not otherwise purchase.
- Increased investment in health. From hand sanitizers to immunity boosters, the consumption of health and sanitation products increased during COVID, and will not go down anytime soon.
- Local first. To help support local communities and economies, more consumers have been keeping their dollars local.
- Data sharing. Consumers are feeling more comfortable sharing their data if they trust it will be used responsibly. This can help retailers get to know their customers on a whole new level, and personalize offers and promotions like never before.
- Low tolerance for mis-steps. With so many options catering directly to consumer needs, they have come to expect a high level of service.
Retail Reset recently conducted a live webinar with Virna Sekuj, the strategic insights manager for GlobalWebIndex (GWI). GWI has been surveying consumers worldwide about common feelings, fears and reactions to a life with COVID-19 since March. The organization has been studying how people are adopting new behavior patterns that are adding up to a NEW day-to-day life. Virna’s top takes:
- The reaction to living in a pandemic is ‘normalizing’ and there’s less of a sense of panic and more of a sense of taking steps forward as we continue to manage our new circumstances in life
- People have come to terms with COVID-19 being part of their lives long term. More than 80% of people surveyed think that active management of COVID will continue for at least six months or more.
- Zoom (video conference) and media fatigue continue to set in and is wearing on people
Consumers are now finding themselves testing a fragile new resilience that was gained in June, as many regions are migrating back into quarantine. The adaptation, and sense of hope that was pervasive in June have not completely taken flight, but morale has been hit.
Companies and consumers are still hopeful. There are many companies seeing strong demand as consumers have shown that they’re wanting to get back to life as they’ve known it. At the same time, there are a lot of reports detailing promising vaccinations. Consumer demand plus the potential for a successful vaccination are quelling the morale hit from the spikes in COVID cases nationwide.
Where does that leave the specialty industries?
SIA TAKE: We will have a long list of new processes to build within our specialty businesses, whether that’s with consumer safety or creative fulfillment. Make sure that with the effort and dollars you are investing in these changes that you continue to grow and nurture your audience. As specialty brands and businesses, our fans and followers rely on us to bring them respite during these uncertain times. We’re seeing data that consumers are feeling more comfortable making larger purchases, like vacations and electronics. As specialty brands, we can support the online research for such purchases – no matter how far into the future our shopper may be. Our brand narrative can nurture and connect with consumers whether we have stock or not, right now.
Many brands in cycling and some categories of outdoor are experiencing a boom, and are challenged because they’re low – or out – of products. The hunt for product and the experiences that the consumer hopes to have with the product they’re looking for is still active. Offer them all you can, in the most remarkable way you can – invite them deeper into your brand and invite them into a brand community experience.
At the same time, if you’re a retailer or a brand that can offer a physical experience, make sure you’re not only building processes around safety, but that you’re communicating how you’re keeping people safe.
Consider how to make transactions as easy (effortless) as possible, how to personalize the experience, and provide empathy for their situation. Look at providing flexible payment terms for larger purchases, promotional offers for new buyers, online or contactless payment options, and continue to refine the experience you offer with curbside pickup – engineering an optimal consumer experience through COVID will go a long way.
More to come next week. Please let us know if there’s something specific you’d like for us to include in our weekly Consumer Behavior Pulse – email [email protected] to send your request. Thanks!