Five seismic shifts in consumer behavior retailers need to know about
If industry experts agree on one point about the coronavirus, it’s this: had this pandemic hit us even just a decade ago, its impact on our lives would have been very different. Advances in communications technology and ecommerce have allowed us to fulfil self-isolation and stay-at-home requirements without too much inconvenience. Generally over the past couple of months, we have been able to buy and receive the items we need, but over this time our buying preferences have fundamentally changed. New, potentially long-lasting consumer preferences have emerged.
As we begin to re-enter the physical world around us, retailers and ecommerce companies are looking at these seismic shifts in consumer behavior to help them identify new trends, rebuild their businesses and deliver the best customer experience. There is no doubt that encouraging consumers back into stores will be a challenge but opportunities presented by changes in buyer behavior could create new revenue streams. Refocusing retailers’ and ecommerce companies’ businesses with these behavioral shifts in mind will give them a head start.
New behaviors displayed during Covid-19
A poll of 2200 US adults by Pitney Bowes and Morning Consult, presented at a webinar in May, highlights just how significantly buyer preferences have changed. 57 percent of shoppers surveyed say they have avoided going to a store since the beginning of the pandemic. 44 percent of respondents have chosen not to shop online with a store if it requires a physical drop-off for returns. These behaviors aren’t temporary: almost half the consumers surveyed felt their preferences had changed for good. The new preferences point to adjustments that retailers and ecommerce businesses should make for this shift to a new normal.
- There are more products which we now prefer to buy online – and this will continue
- Free shipping is even more popular now and we still love shipping notifications
- We’re exercising more patience when it comes to receiving discretionary goods
- More of us are signing up for subscription box services
- We prefer home pick-up for our returns – and this is influencing our purchasing
Between 21 and 31 percent of respondents, depending on the product category, said that where they used to prefer to go into a store, now they prefer to buy online. 31 percent now prefer to buy toys, products for hobbies or gifts online; 30 percent prefer to buy office supplies online; and 29 percent prefer to shop for personal care and apparel online. While we might think this is a temporary situation exacerbated by stay-at-home requirements and limited stock availability, almost half the consumers in the study believe their purchase habits have permanently changed. 33 percent expect to shop online for food and beverages more often; 30 percent for household supplies and 29 percent for personal care, with increases of 19-25 percent for other categories.
When it comes to their shipping preferences, 73 percent of consumers say free shipping makes their life easier – an increase of 10 percentage points from a Pitney Bowes/ORC study of 2826 US adults in September 2019. 66 percent love it when the returns process is simple, while the same percentage – 66 percent, an increase of 15 percent from the previous study – said they most appreciate shipping notifications. However, consumers are tracking packages less often: 31 percent, down 11 percentage points on the study from last fall, are now tracking their packages daily, while 24 percent – 4 percentage points more than last year – will only track on the day they’re notified their package is shipped. 12 percent, a rise of 8 percentage points, never check the tracking status.
The pandemic and its resulting impact have pressed pause on a world in which ecommerce companies raced to accelerate the speed of deliveries. Perspectives, and priorities, have changed. The Pitney Bowes and Morning Consult study highlights a willingness to wait for certain products. Consumers would prefer to have the right product delivered sometime soon than a ‘good enough’ product delivered fast. They have the luxury of being more selective about the product they’re choosing. This was applicable to 21 percent of consumers when buying clothing; 18 percent when buying consumer electronics and 18 percent for home goods.
However, Food & Beverage and Household Supplies are the industries in which people have most changed their shipping preferences in favor of faster deliveries, with nearly 1 in 5 respondents saying they prefer to buy from retailers with fast delivery since the start of the Coronavirus outbreak.
The Pitney Bowes and Morning Consult poll revealed that 1 in 10 Americans have signed up for non-food subscription boxes. 11 percent have signed up for a non-food subscription box specifically as a result of Coronavirus, with the largest cohort being millennials with young families. While they’re unable or unwilling to visit stores, subscription box services provide the peace-of-mind and convenience of knowing they’ll receive their goods shipped directly to their door. Two out of three consumers that have signed up for these services say it has led them to shop less with non-subscription retailers that sell these products.
With 14 percent saying they plan to sign up for a non-food subscription service soon, retailers and ecommerce firms have the chance to maximize this opportunity. Subscription box services introduce new products to customers; generate new revenue streams; and drive retention and growth.
The returns process seems to have a greater influence over purchasing decisions than ever before. Store-based returns seem to be falling out of favor: 44 percent of respondents in the poll have decided not to shop online with certain stores because it would require a physical drop-off for returns. The same percentage – 44 percent – say they would be unlikely or very unlikely to drop off returns in-store, and 43 percent unlikely to drop off at a returns desk or kiosk inside a mall. Instead, consumers are more than happy to manage their returns from home. Home pick-up by carrier is the preferred returns process for consumers, although many retailers still don’t offer this.
Even before the social distancing measures were in place, 66 percent of consumers said they love home pick-up for returns. Home pick-up is three times more popular than carrier drop-off and four times more popular than in-store drop-off. 53 percent of consumers questioned in the Pitney Bowes and Morning Consult poll are happy to pack an item for returning themselves and have the carrier collect from their home.
Building these behavioral shifts into reopening plans could help retailers and ecommerce companies forge ahead, helping them get closer than ever to their customers in the new normal.
Vijay Ramachandran, VP Marketing Strategy & Planning, Pitney Bowes