One of the big questions retailers are asking themselves is how has consumer behavior been changed by the pandemic.
In many areas, we can't say for sure yet, but there are definitely hints out there. Here, we pick three areas of consumer behavior that we think might just outlast the pandemic.
With a greater focus on convenience, limitations on product availability, and online taking an increased share of consumer spending, loyalty has been tested during COVID. One study suggests 39% of consumers globally tried out a new brand during lockdown, and 88% will buy from that brand again beyond the pandemic.
Retention and acquisition will be in sharp focus for many. For those that acquired new consumers – great! But how do you make sure you’re not in the 12% who lose that custom when their regular brand tries to draw them back? And if your regular customers tried out a competitor in the last year, how do you win back that spend?
Limitations on availability of products and access to service retail, coupled with economic challenges for many, has meant a significant minority of consumers have limited their shopping intent to essentials. Clearly, this poses challenges in some verticals more than others. Personal care products and apparel both saw significant declines. But as confidence in the economic outlook builds, will pent-up demand release or will some consumers’ thrifty habits become ingrained?
Again, this is likely to vary by demographic. Take higher income consumers, who were more likely to have worked remotely during lockdown and reduced spend most on apparel, restaurants, and jewelry. If remote or hybrid working models sustain more in this group, different verticals will recapture that dollar more easily than others. If this is replicated to a lesser or greater extent across demographics and verticals, the whole consumer landscape has moved significantly.
Convenience vs. experiential shopping behaviors
People have learned how to shop online during this pandemic, and many have indicated they will continue to shop for more items online with home delivery and ship to store. Others will be anxious to get back out into the world and look for reasons to spend time outside the house. For retailers and shopping center owners this means two distinct audiences to attract – those still wishing for online shopping with a combination of home delivery and curbside/in-store pickup, and experiential shopping designed to bring people to stores and centers.
For those experiential shoppers, COVID has shown to increase the impact of “convenience shopping” or trying to make more purchases in fewer stops or trips. The ability to provide a more experiential retail offering combined with convenience as a consumer traffic driver may determine the early winners in retail as we emerge from this pandemic.
What is still unknown is how long these matters will be so important. Many are predicting these new patterns are here to stay. But as history shows us, time will tell, and it may well be we return to our pre-COVID routines and patterns. That begs the question – which retailers and shopping centers can adjust to these new consumer habits to drive traffic and create brand loyalty in the future? My money's on the ones with access to the best data and tools to help them track the new normal as it unfolds.
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