What will this mean for retailers? A recent webinar at which Ernst & Young presented their Future Consumer report to the British Retail Consortium, dug deep into the demographics and psychographics of consumer behaviour during the pandemic, how it transformed their lives and what they now value. It revealed some interesting insights about how retail businesses will need to adapt and respond to what is steering consumer behaviour during this period of recovery and beyond.
Online shopping for instance rose over 80% during the third national lockdown and remained above 40% even when ‘non-essential’ retail re-opened between June and November 2020. It is anticipated to continue to be higher than before the pandemic, because this has sped up the digital transformation process, with what was anticipated to take 6 years occurring in just 12 months. EY surveys revealed that many shoppers now like to mix and match their research and purchasing both online and in physical stores and retailers will need to be very strategic about balancing their in-store and online operations.
Younger consumers were also impacted by the pandemic, with over 80% of millennials and Gen Zs concerned about their finances, compared to 61% of baby boomers. However, younger consumers also seem to be more optimistic about the economic recovery and research indicates that they aim to move forward with a more ‘purpose-led’ existence and a desire to lessen their environmental impact and to give back to their communities.
Purpose is therefore going to be a core consideration for many consumers going forward. Whether the stance is about local community or sustainability, retailers operating physical stores are going to be required to think of ways to signal their support for these consumer groups very clearly. They will need to harness the power of their stores and accept that their role has changed, quite possibly forever.
Many consumers also want to maximise their enjoyment, primarily through greater spending on products and experiences. Stores will be in an advantageous position to deliver a social and entertaining element, enticing customers with in-store experiences that cannot be replicated online. Supporting local relevance is also driving growth opportunities. With many of us set to work more frequently from home, we will spend more time shopping locally. Catering to the needs of local consumers, particularly given the possibility that international travel remains uncertain in 2021, could prove lucrative for the brands and businesses providing this.
There is also scope for retailers to increasingly form collaborations. These symbiotic partnerships such as Laura Ashley in Next and A in Tesco are linked to an increase in dwell time of customers in stored.
There is no doubt that retailers set to emerge from this pandemic the strongest, are those able to anticipate changes in consumer behaviour and quickly adapt to it. Even as people are set to continue to shop online, they are craving interaction and this creates a strong opportunity for stores to re-engage with their customers on a physical level, as long as it also makes them feel safe. People are going to need this reassurance for a while yet!