3 consumer behavior trends that could outlast COVID

After kicking their e-commerce operations into high gear last year, retailers are under pressure to keep up the pace. Consumers have high expectations after becoming used to fast and convenient online shopping during the pandemic.

Brands should expect some COVID-driven consumer behavior trends will continue beyond the pandemic. Here are three likely candidates:

1. Online channels will remain popular across generations
2. Consumers need a unified shopping experience across online and offline channels
3. Subscription models will continue to gain traction

Across demographics and regions, there’s quite a bit of variation around what products – previously sourced in stores –shoppers now buy online, and whether they will continue these habits post-COVID. Overall, the trends point to a significant percentage of consumers retaining at least some of their newfound online habits.

Retailers will have to remain flexible and tap into new customer engagement strategies to make the most of this opportunity.

To see how the pandemic impacted shopping habits, the Economist Intelligence Unit and SAP Customer Experience surveyed 4,000 consumers across generations in the US, Germany, the UK, Italy, and Spain in September 2020. The findings offer insight into what retailers need to know about changing consumer habits post-COVID.

Consumer behavior trend: Shoppers stay online 

The move to online channels in early 2020 was swift, as the mere thought of crowded stores became untenable. Even shoppers who had never considered shopping online gave it a try and found that it worked quite well.

For example, online shopping only accounted for 25% of total global spending for Baby Boomers from January to March 2020, but during the pandemic, it jumped up to 37%.

Continuing to cater to these new shopping habits – while not necessarily a simple task – is well worth the effort for retailers, considering the new levels of business efficiency and customer loyalty that can be achieved through online selling channels.

When comparing pre-pandemic online shopping to post-pandemic plans, most global demographics see an uptick in online’s share of basket.

For Baby Boomers, their 25% pre-pandemic spend should rise to 28%, while for Gen X it will be 41%, up from 39%, and for Millennials it is expected to stand at 50%, up from 47%. The only group that expects their online shopping to dip is Gen Z, which devoted 41% to online shopping before COVID and expects that number to drop slightly to 40% once restrictions ease.

Consumers need a unified shopping experience 

There’s been a lot of talk about what retailers can do to keep up with changing consumer behavior trends and make the best use of physical stores, even if they aren’t allowed to be open at full capacity just yet. The uncertainty that still plagues retailers also incentivizes them to remain nimble as some customers revert to old habits while others prefer to continue shopping online or making use of “click and collect” programs.

Despite the uptick in online shopping, brick and mortar stores aren’t going anywhere.

Shoppers will continue to return as restrictions ease, but they will also hold onto some of their newfound online shopping habits. Offering a unified shopping experience across online and offline channels is the only way to consistently deliver the experience shoppers want on the channel that is most convenient to them. But how can retailers achieve this?

There are multiple paths to that goal, but the answer lies in building deeper relationships with customers based on the responsible collection and management of their data.

Adapting to consumer behavior trends via the subscription model 

One immediate impact of the pandemic on online shopping is that shoppers flocked to certain categories like grocery, personal care, and cleaning supplies. The shift to and from categories was uneven, but everything from books and toys to food delivery experienced an increase in online sales across the five countries researchers tracked.

There’s a retail strategy growing in popularity that’s especially effective for product categories that shoppers are drawn to online: subscription services.

Retailers selling commodities like grocery, cleaning, and personal care products would benefit from leaning into this rising trend toward continuity commerce, which focuses on building long-term relationships with customers by selling products on an auto-replenishment basis.

Consider Thrive Market, an online grocery marketplace that offers online subscriptions for organic pantry basics such as paleo granola and almond milk. Not every company is well suited to a continuity program, but Thrive Market is a good fit because they offer white-label consumables with latent demand and consistent supply that represent upwards of 28% of the company’s overall sales. Moreover, their products can be difficult to find in some areas, so the access and convenience of a subscription can’t be beat.

The keys to a strong continuity commerce strategy include:

1. Making sure that the signup and order process is as easy as possible
2. Offer distinct value (without getting consumers hooked on unsustainable, “loss leader” promotions)
3. Make the offers easy to update

With shoppers spending so much time at home the past year, the type and quantity of products they buy are likely to shift as restrictions ease. Returning to offices eventually will mean that consumers will need less coffee and tea at home, so enabling them to click a button, send an email, or make a quick call to change the volume or frequency of deliveries will reduce churn.

Continuity commerce is sure to stick around because it’s so profitable for retailers. When they get it right, shoppers often buy three to six times a year, up to 600% more often than the average customer.

These hauls add up, as continuity customers tend to spend more on high turnaround and high-margin products. Over the course of a year, a successful continuity program can lead to as much as 25% more revenue, with a 40% increase in profit margins for products included in the subscription model.

Staying on top of consumer trends 

COVID has accelerated a number of consumer behavior trends that were already in motion. For example, the increasing rise of direct-to-consumer channels – not only for retail, but also for a growing number of consumer brands looking to expand their market reach.

If this continues, retailers will need to listen more closely and respond to what their customers want, maintain a flexible strategy and supply chain, and be ready to make quick changes as new demands for customer experience arise.

Only then will they be able to drive loyalty by owning the customer relationship and data.