How COVID-19 has shaped future consumer behaviours
In these fast-changing unprecedented times consumers are being urged to stay home. It comes as no surprise that this has led to a surge in e-commerce sales. The change in consumer behaviours has been forever developing as digital experiences improve. As the government slowly begins to transition to a "new normal", being reactive to change is something consumers are familiar with. The way businesses have adapted to COVID-19 has had a great influence on consumer behaviours as people are now shopping more consciously. The shift towards a more digital world has contributed to a proportion of internet users buying essential products online such as food, clothes and medicine. The outbreak has pushed consumers out of their normal routines, adopting new habits and behaviours that will continue to develop in the long term. To look towards the future, we must analyse the changes that are happening and prepare what’s to come.
E-commerce Grocery Trends
E-commerce use exploded in the first month of the pandemic, with Google searches for "food delivery" and "local food" tripling. The demand for online grocery delivery grew rapidly across the US & UK as the amount of high street shoppers plummeted. Consumers have been pushed to buy in a new way, prioritizing what is most necessary with buying online instead of in stores. When studying the statistics, “the over-55 age group was online shopping almost three times the amount during the pandemic”. There was also a rise in "those 35 to 44 years old, with 32% of those doing one online shop per week."
The home meal-kit delivery market has also been boosted by shoppers’ who are reluctant to visit the supermarket too often, as well as having more time to cook and no restaurants to visit. According to Cardlytics, “expenditure on home meal-kits more than doubled in the first month of the pandemic,” with HelloFresh reporting a 64.5% revenue jump in the first quarter. Competitor Gusto currently delivers over 1.5 million meals a month and has seen a similar acceleration in its business as a result of COVID-19. The surge in growth has come from both new and old customers, order in frequency has increased and there has been a seismic demand for new customers as well. Partnering up with famous faces has given Gusto a competitive edge, Joe Wicks, a health influencer, invested into the business developing his own nutritious meal plan in aim to improve the health of the nation. This investment has emphasized the company's strengths, as they now offer a unique range of meals. The need to shop more efficiently has become a common trend among consumers as it has heightened the need for ease, immediacy and simplicity. Their positive experiences have led to new habits, which have now become a permanent part of consumers' lifestyle.
Home delivery is not a recent concept; leading supermarkets such as Tesco and Asda have been delivering it for more than ten years. It was inevitable that the service would rise in popularity as the pandemic spread. They've continued to adapt their conventional selling methods by creating COVID-friendly procedures like 'Click and Collect.' Morrisons have noticed the rise in popularity with home meal-kits and have launched a recipe box to rival companies such as HelloFresh and Gousto. The box is designed to provide quick, easy, affordable homemade meals that families can cook from scratch by making mealtime a sociable, family experience. The boxes retail at a “lower price compared to competitors coming in at £30 per box” , making it a suitable option for consumers who are on a budget. Morrisons has successfully taken advantage of the growing popularity of home meal kits during the pandemic by increasing their online presence. Other supermarkets must notice this trend and increase their online presence in the coming years, or they risk becoming irrelevant. Their main challenge is and will continue to be the popularity of online shopping methods.
Growing Love for Local
Some consumers have grown accustomed to not only digital services but also local shopping. People are becoming more aware of what is available on their doorsteps as a result of a newfound respect for small businesses, resulting in happier consumers. For the sake of convenience, more consumers are considering purchasing food directly from the source rather than going through a store. These developments are happening as food has risen to the top of the consumer's priority list. Food has become a subject area that consumers are interested in, with more family dinners, home cooking, and baking. As a result of this interest according to the BBC, “72 percent of people say they will shop locally regularly after the pandemic.” Barra Organics, a fruit and veg shop in Sharrow Vale, Sheffield, reported on a Facebook post that they had their busiest Christmas on record selling over two tones of produce in just one week. Their thanks went out to everyone who supported them through the peak of the pandemic, expressing their small businesses wouldn't have been able to survive without the help from the local community.
More independent businesses are also gaining popularity among consumers. Abiding to lockdown restrictions, independent restaurants and cafes have resorted to strategies such as takeout. A local business which has benefitted from the takeaway coffee trend is vegan and Aussie inspired cafe Pom Kitchen in Sharrow Vale. As well as takeaway they have incorporated other services such as ‘Pom at home'. This has prompted customers to replicate their favourite recipes at home, resulting in a boost in their online presence. As customers share their creations on social media, the organization's profile grows. Another service which they introduced during the pandemic was home delivery via CityGrab, an independent multi-delivery platform, which enables consumers to have their favourite local products delivered to their doorstep. The value of appreciating what is local has been emphasized by lockdown, with “49% of consumers making a purchase specifically to support local small business during the pandemic”.
Smaller shops have drawn more consumers because they tend to be a "safer" experience. Independent stores take pride in offering exclusive in-store shopping experiences. As a result of the pandemic, situations have changed, and they have adapted to online shopping. They've seen a spike in e-commerce sales as some consumers continue to favour online services over in-person experiences. According to Next-door Business, “98% of consumers say local businesses make a positive impact on their neighbourhood.” This positive impact has encouraged people to take an interest in their environment, which has boosted sales. This trend is expected to continue, with small stores benefiting from the popularity in the community. Going online provides a new opportunity for growth for small businesses.
‘Buy Now, Pay Later’
Consumers are becoming more aware of what they are purchasing. Unemployment is at a new high as a result of the pandemic, this uncertainty has developed cost-conscious consumers. People are now more conscious of how and where to spend their money. According to The Independent, “‘Buy Now, Pay Later’ transactions tripled in 2020.” Klarna gained 987,000 sign ups during the months of March to July, a 200% increase on the year before, while AfterPay drew more than one million customers from March to May, according to Huffpost. This trend is popular especially in younger generations with “nine in ten millennials using a ‘Buy Now, Pay Later’ service during COVID”. As we ease back into the new normal, the need for this service will decline as consumers become aware of their spending habits. According to Statistica, “20% of users have said they will use BNPL services less in the future.”
The pandemic has allowed us to refocus our minds on assisting in the development of a happier, healthier planet. Consumers have dramatically evolved with ”60% reporting to have made more environmentally friendly, sustainable or ethical purchases since the start of the pandemic”. Sustainability is becoming more critical to younger generations as they become more aware of climate issues. According to the BBC, “75% of Millennials are willing to pay extra for sustainability”.
There has been a huge interest in brands developing sustainable clothing. H&M Conscious, Zara Join Life and ASOS Design are some examples of popular sustainable ranges. By using eco-friendly practices the companies hope to reduce their environmental footprint. Alongside their sustainable ranges, retailers are now offering consumers an incentive if they recycle their unwanted garments in-store. This encourages consumers to make ethical choices and shows their support to the cause. H&M alone has a set target to “use only sustainable source materials by 2030.” This has been reflected in H&M’s success making them the “second largest retailer in the world”, their focus on sustainability, diversity and inclusivity is something that consumers value. If organizations do not react to the way consumer behaviours and societal trends are changing, they will see a decrease in interest. As sustainability continues to be held high, consumers are more likely to shop ethically. Organizations should be in the process of making long-term improvements to their operations because if they don't, they risk becoming outdated.
Increase in Fashion Consumption
As consumers, we usually live in a fast-paced environment, which goes hand in hand with fast fashion. Fast fashion is both cheap and easy, a concept which consumers now thrive for. The concept of fast fashion is to mass produce high-fashion designs at a low cost, it has been an extremely popular purchasing method with consumers. Items can be shipped to you with the click of a button, saving you expenses on outings. It's not just the cost-effectiveness of fast fashion but also the variety of options.
As people are spending more time at home, the need for comfort has excelled. Leading fashion retailers Zara, Missguided and ASOS all developed loungewear ranges which became extremely popular. The demand for loungewear “increased by 49% during the first few months of the pandemic.” VICE reported “ASOS sales on tracksuits were up by 200% compared to April 2019, they sold 188,000 pairs of ASOS 505 leggings during the first lockdown.” It was not just the ASOS brand that proved successful but partners too, “ASOS streetwear brand Collusion selling over 1.5 million t-shirts and 760,000 tracksuits.” Online retailers used their platforms to promote the new work from home attire, making loungewear sales hit all-time records in 2020. Online retailers can respond to fashion trends conveniently, which enhances customer loyalty as they are always up to date.
Some consumers however have benefited from the furlough scheme which has resulted in them having more disposable income. Not spending money in pubs or restaurants leaves more money to spend on fast fashion. Online retailers have been able to keep consumers interested as more people engage with social media. This has given them an opportunity to interact directly with their consumers. ASOS and Missguided’s online promotion is so much more dynamic than New Look or Dorothy Perkins. These brands are successful as they are targeting a large proportion of internet users, using various marketing techniques to ensure their online presence is known. A common technique shared by online retailers is the use of interactive marketing, “93% of marketers say that interactive content is effective at engaging with consumers.” Incorporating interactive content is effortless for online retailers as they are able to use platforms like Instagram, Tiktok and Twitter to post polls, pictures and live videos. The more they utilize these apps the more sales they will generate. Retailers must design services and experiences to meet new customer needs and increase digital awareness. The pandemic has given businesses the unique opportunity to reset and rebuild for the long-haul, so they must take advantage while they can.
The Importance of Influencer Marketing
Most retailers use a multi-channel approach to sell their products, social media is now an essential part of their communications. According to Sky News, “people spent 36% more time on social media than previous months.” The UK lockdown led to social media platforms being widely used and has allowed influencers to adapt and engage with their audiences in a way they haven't before. Influencers have played an essential role during the pandemic, collaborating with brands and influencing their follower base to buy the latest products.
The mochi TikTok craze started by Little Moons is a great example of how successful influencer marketing can be. Little Moons used creators on TikTok to make videos of themselves enjoying and reviewing the ice cream. This started a trend with other users sharing videos of themselves replicating the creators, resulting in a total of over 19.5 million views. The Grocer reported, “Little Moons saw their sales surge by 700 percent in Tesco beating its entire December sales in just four days.” Little Moons also rose sales in “Waitrose by 350% and completely sold out on Amazon Fresh.” This trend will flourish post-pandemic as social media evolves. It will be crucial for brands to keep on top of upcoming trends, the TikTok phenomenon has now become an effective way for brands to share creative content. The ability to rapidly expand brand awareness almost overnight displays how fast-paced the industry is. It will be highly beneficial for brands to notice these trends and take advantage.
As a result of major retailers closing their doors last year, the difference between conventional ways of shopping and e-commerce sales was highlighted. It's not only that they've shut down their high-street shops for good, but also how they've been merged with e-commerce giants One of the largest online retailers, ASOS, recently rescued the Topshop empire. The fact that ASOS has opted to only sell via their website, resulting in the loss of thousands of jobs, highlighted the confidence organizations have in e-commerce. Debenhams, which was acquired by Boohoo, “one of the fastest growing international brand retailers”, also failed in the COVID-19 crisis resulting in a shift to online sales. With the collapse of these major retailers, the future of the high street has never looked more uncertain. Consumers now have less interest in visiting the high street. As more major retailers disappear, consumers behaviours will continue to develop as their interest will keep declining. As e-commerce builds confidence, the integrity and future of the high-street is uncertain.
A Focus on Fitness
Everyone has experienced an overwhelming period of self-reflection, which has resulted in a greater emphasis on health. Consumers are willing to spend more money on exercise, nutritious food, and self-care. Yahoo reported that; “since the 23 March home gym equipment spiked by 5813%.” The shift in home workouts has been reflected in the audience of those who provide free online sessions, Instagram fitness enthusiast Courtney Black has seen “a 131% rise in followers since March, with some of her sessions viewed over 250,000 times.” It has not just been an Instagram craze but also Joe Wicks set a new record with “over one million people tuning into his live 9am workout classes.” Home workouts have become popular with many consumers as they look for a mental and physical release inside the home. This new lifestyle that consumers have adapted has contributed to new habits which may become permanent.
As a large proportion of people adapted their workout routines, it encouraged gym wear brands to change their marketing content. Gymshark, “a fitness apparel website”, introduced ‘Gymshark dailies’. This was a daily email to their subscribers covering topics like “home workouts, nutrition ideas and mental well-being activities which helped see their customers through lockdown.” Gymshark recognized that although people are going to the gym less, it doesn't have to lead to less demand for their products. This creative marketing technique resulted in Gymsharks profits staying high with the business reaching a net worth of “one million pounds by August 2020.” The need for comfort has been excelled and consumers are now interested in the emotional benefits. This trend will develop post-pandemic as “60% of consumers expect to spend the same/more on gym wear after lockdown.” Consumers will continue to prioritize their health, so home workouts and gym wear will be popular for some time.
New Streaming Habits
Stay-at-home audiences have fuelled the home entertainment industry. Since going to the cinema and the theatre is no longer an option, consumers are urged to watch films, series, and sports from the comfort of their own homes. Streaming platforms have revolutionized the way people consume entertainment as their time socializing decreases, their time watching tv increases. There are a number of reasons for people turning to streaming while at home. Streaming platforms operate with a content library, which has been critical to their success during the pandemic. It has allowed them to keep audiences engaged while also providing them with good value. The variety of content has also kept consumers satisfied with over 3000 shows to watch per site. Consumers now depend on streaming services to escape from their everyday lives, which has resulted in new behaviours.
As a result of the pandemic, there has been a significant shift in media consumption, consumers demand light-hearted humorous content as a form of escapism. This can be seen in the success of Netflix's series Tiger King. The release date coincided with the start of lockdown when the stay-at-home order was in place. Within ten days of its release, Tiger King had generated 34.4 million views and jumped to the top of Netflix charts, making it one of their most popular shows. This rise in light hearted content is reflected in other streaming services such as Hulu with sitcom becoming the most popular genre. This is also true of Disney Plus, which debuted at the end of 2020 and grew to 50 million subscribers in just five months. The BBC reported that “Disney Plus viewing figures were at 25.6 million in February, they have since doubled due to the restrictions.” The pandemic has benefited the online entertainment industry considerably, but things might be different post-COVID. Subscription-based services often experience a sales increase followed by a decline, so it's not surprising that subscriptions would decline when life returns to the "new" normal.
Shaping the future
Changes that offer positive experiences, particularly those motivated by convenience and well-being, are more likely to last into the future. It's important to remember that, while e-commerce has expanded rapidly in recent months, the pace will slow as we return to the new normal. Consumer behaviour will be tested when restrictions are eased but it appears that online shopping will be the predominant form of shopping for some time. Only time will tell if we will see a revival of the high street or if the future is online.