Consumers globally are in the middle of the largest and fastest shift in shopping behavior since decades. The prolonged impact of the COVID-19 pandemic is fundamentally changing how consumers buy and pay for their products. The top drivers of consumer decisions have now become safety, value, convenience, and availability.
In this quickly shifting ecommerce landscape, there is growing evidence that many of the shopping habits that consumers have adopted to cope with the global crisis will be with us long after pandemic subsides.
Here is a look at some of the trends that will continue with respect to Online Shopping behavior.
New segments in the Demand & Supply chain:
• New Consumer segments move online – COVID-19 has caused an inflexion in ecommerce penetration globally driven by lockdowns and social distancing norms. This has pushed new customer segments, such as the baby boomers into online buying.
• Buying from local stores, and new businesses – Local and small businesses are moving online. This has given consumers the comfort of buying from nearby stores that were traditionally offline, and options of buying products from smaller brands. For instance, PPE equipment such as Masks, Sanitizers and Ayurvedic products, immunity boosters are being manufactured at small factory units and sold at marketplaces online.
• Buying new product segments – Essential items such asgroceries, medicines, hygiene products, other household products, and non-essential items such as home-gyms, work out equipment, gaming and entertainment productshave seen an upsurge in online sales.
Change in Shopping Patterns & Experience
• Larger cart size, less frequent shopping – Buyers areavoiding physical contact with retailers and delivery executives and are also sanitizing or keeping their goods out for a few days. This trend has resulted in people ordering in bulk and less frequently.
• Decline in Discretionary spend – There has been an evident decline in discretionary spend across age groups. Without a clear timeline for a vaccination and impact on economies and jobs, customers are limiting or delaying the spend on luxury and discretionary items. Industries such as fashion and beauty have witnessed this decline.
• Personalized shopping through multiple digital channels – Consumers are buying not only more frequently on mobile, or through Virtual Assistants, Messengers and Social Media Platforms. The requirement for an omni-channel shopping experienceand engagement on mobile and social channels is expected to continue. Additionally, personalized shopping and recommendations has increased consumer stickiness for ecommerce over physical retail for years to come.
Safe and convenient Delivery & Return Requirements:
• Safer with contactless delivery – To avoid any physical contact with delivery executives, consumers prefercontactless delivery of the products.
• Need for faster and hyperlocal delivery – E-commerce was earlier disrupted with expedited delivery options for select segments and items. With the pandemic, we are seeing a steep demand for faster hyperlocal delivery options, especially for segments such as groceries, health and household. Pitney Bowes BOXpoll found that 66% of the consumers are ready to pay to upgrade to ‘fast’ shipping.
• Free Shipping and Easy Returns – With most of the household shopping done online, consumers prefer free shipping and delivery for their orders, with easy and safe returns and pick up options.
Adoption of Digital Payments:
• Rise of Digital and Contact less payments – The pandemic has not only changed how people shop, but also how they pay. While evident in e-commerce, Digital and contactless payments have seen an unprecedented growth even at Retail stores, as a safer and quicker way of making a payment.
The e-retail industry is convinced that most of the behavior change will persist beyond the pandemic. Ecommerce players who have focused on implementing digital tech into their operations are a step ahead of the others.
Using tech such as AI/ML for route optimization for faster delivery, personalized experience, warehouse optimization, is helping companies cater to the changing consumer behavior in retail.
- Pankaj Sachdeva, Vice President, Innovation and India Site Leader at Pitney Bowes