Heading into March 2020, retailers were already rethinking the role of brick-and-mortar stores in the buyer journey. However, as stay-at-home restrictions and concerns for safety grew in the early days of the COVID-19 pandemic , the shift to a digital, omni-channel engagement became front and center. Retailers reconsidered the digital customer experience and services – like buy on-line, pick up in the store, curbside service and overall in-store safety. In short, the pandemic has changed retail buying patterns – where we shop, how we shop, and what we buy. If we go in-person to stores, we need to know what we can expect from a safety perspective.
In May and November 2020 Acxiom conducted a research survey to explore how people’s attitudes and behaviors are shaping their buying behavior.
Before the pandemic, just 15% of 65-74-year-olds and 18% of 55-64-year-olds bought groceries online monthly. That has grown significantly to 26% and 28%, respectively.
29% of 65-74-year-olds and 34% of 55-64-year-olds now buy household supplies online every few months, up from 23% and 28%, respectively, pre-pandemic. This group is the largest source of ecommerce growth, and understanding their shopping attitude shifts is critical to capturing their business.
While digital shopping and buying has grown among most categories of consumers, it is easy to believe that this online growth has spread far and wide across all categories of goods. However, there are many categories that haven’t benefited from it – at least not yet. Before the pandemic, 46% of 65-74-year-olds and 53% of 55-64-year-olds bought clothes online once every few months, but that has fallen by 12%. In fact, online apparel shopping has fallen for all age groups. While apparel is still the most popular category to buy online, groceries, household supplies, personal care products and cosmetics have been closing the gap.
Secondly, our research provides some insights into why people are shopping this way, and what attitudes underpin these trends. 65% of the population is spending less time in stores. They want to get in and out of a store as quickly as possible vs. casual browsing. Additionally, 60% say their shopping is mostly limited to essential goods. In addition, 65% say they are spending less on home luxuries, and 57% are making fewer impulse purchases.1 This explains a great deal of the category trends; there is a re-prioritization of how people are spending their money and time, which creates fewer shopping moments for many discretionary purchases.
While these trends apply across all age groups, there are some generational differences. Older generations are spending even less time in stores and limiting their shopping to essential goods. Younger generations are spending less time in stores as well, but unlike older generations, a majority are spending more time browsing before they buy. That hints at a changing definition of the role of the physical store and what it means to browse when shopping. Along with that, a majority of younger people say they are buying less expensive products, which hints at more deal-seeking among young, mostly online shoppers.
The demographics of online buyers have changed, forever perhaps. Although many might still prefer an in-store experience to shopping online, the fact remains that there is a new and growing group of people who will continue to gravitate and use digital channels for all brand interactions and shopping. People spent $861.12 billion online with U.S. merchants in 2020, up an incredible 44% year over year, according to Digital Commerce 360 estimates. That’s the largest annual U.S. ecommerce growth in at least two decades. It’s also nearly triple the 15.1% jump in 2019.2
So how should retailers continue to adapt to changes in what people want from in-store and digital shopping experiences? Here are a few things to consider:
- Have you recently assessed your data-driven efforts in light of the changes in consumer behaviors? How accurate are your data insights and analytic models given the significance of the changes in what people are buying and how they shop for and buy them? Have you refreshed your data, segmentations and predictive models to reflect new and changing buyer journeys and buying patterns?
- How confident are you in your current customer identification processes? Are you able to accurately recognize and know your customers across all of the digital (and offline) channels they use to engage with you? Now that your customers are interacting more often via digital channels and touchpoints, can you connect the dots across those interactions to gain a complete and accurate view of them?
- Are you prepared for the future and the loss of third-party cookies and that impact on your current recognition solution? When third-party cookies go away, will you be able to accurately recognize your customers in your digital channels? Will you be able to accurately measure the effectiveness of your digital media? Do you have a plan to build a robust first-party identity graph?
- When was the last time you updated your analytic models and contact strategy for your customers? Have you updated your contact strategy and loyalty engagement to reflect what your customers need from you right now? How confident are you that you are still reaching them in the right way with the right message at the right time?
If the answer to any of these questions is “not very” or “not sure,” it is time to take a deep look at your data and the level of your customer insights. It is critically important to set the foundation of your first-party customer graph with accurate data, so you know – with confidence – who you are talking to at all times. And secondly, it is important to use all of the new data and information we have about the changed buying behaviors of consumers to inform your analytics and contact strategies so they have the biggest impact.
With the role of brick-and-mortar stores changing for many retailers, it is also important to consider how you can use consumer data to inform what merchandise should be in each store and how best to optimize that inventory. We are using some ground-breaking AI to help our top retail clients crack the code on this.
As the leader in customer data, identity resolution and data management in the retail industry, Acxiom is here to help you understand these changes in consumer behavior and expectations and turbo-charge your customer experience through customer intelligence.
1Acxiom Market Pulse, November 2020