8 Consumer Behavior Trends Here to Stay in the COVID-19 Retail Aftermath


The ripple effects of the COVID-19 pandemic have been felt across the globe and the retail industry is no exception. The pandemic has generated widespread fear regarding health, job security, quality of life, and financial stability at both a personal and macro-level.

In response to this uncertainty, spending has slowed, which has directly impacted the income of others. In the midst of rapidly evolving market forces, retailers are adjusting to the "new" new normal, embracing change to survive, and sometimes thrive, in this post-COVID-19 market. 

Following is a list of ways consumer behavior has changed and how retailers have responded to those changes.

#1 Self-Servicing Has Become Commonplace 

Convenience to customers has always been the prime agenda of all retailers — social distancing has accelerated the development of self-service models. In fact, BOPIS (buy-online-pickup-in-store) and BOSS (buy-online-ship-to-store) gained increasing popularity amidst consumers.

According to Adobe Analytics data, BOPIS orders (including curbside) increased 62% year over year from late February to March 21. Grocery stores, pharmacies and restaurants aren’t the only ones adopting curbside pickups; other big brands that added this option include Kohl's, Best Buy and Dick's Sporting Goods

#2 Virtuality: The New Reality

Beyond BOPIS and BOSS, customers are now relying on AR & VR to try out glasses, clothing and even furniture. For instance, IKEA customers can explore kitchen interiors with VR. 

In the wake of the pandemic, customers now prefer to move more of the whole purchasing cycle online than we have ever seen before. Virtually every commodity and industry will need to be prepared to fulfill demand digitally. According to a recent Coresight report, consumer spending on reality technologies this year is projected to reach $7 billion, and distribution and services spending on the technologies could reach $4.4 billion.

#3 Online Payments

Another major area where COVID-19 has rapidly accelerated development is helping customers move from offline to online payments (Apple Pay, PayPal, Venmo). Pre-COVID-19, online payments were a choice rather than a necessity. Post-COVID-19, digital and contactless payments have become mainstream. 

In response to retailers enabling as many forms of online payment as possible, consumers ware embracing the convenience, and prefer the online mode of payment across channels, for big and small purchases. As we talk about online payments as a way of life, it’s likely that physical gifts will be replaced by digital gift cards and cash.

#4 Luxury vs. Necessity: Shift in Wallet-Share

The items consumers purchase have also shifted. In addition to the limited availability of goods due to closed stores and disruptions in the supply chain, there is also financial uncertainty and changes in pricing due to shifts in demand. The upshot is consumers have spent (and continue to spend) on necessities, while abandoning their usual discretionary spending.

At the same time, the pandemic has not been without its indulgences. With increasing availability of access to luxury goods, EY also predicts that COVID-19 has led to the emergence of the Cautiously Extravagant — that 25% of consumers who will take advantage of access to certain goods they might not otherwise purchase. The challenge for retailers is assuring that the product is targeted at these consumers and is offered at a price that doesn’t go beyond their risk-tolerance. 

53% of consumers in their index would make their personal data available if it helped to monitor and track an infection cluster.

#5 Increasing Investments in Health

On the more essential end of the market, it’s no surprise that when a pandemic takes over the world, the first thing you would think about is your health and that of your loved ones. Out of the necessities that consumers are spending on, health products are taking up a huge share of wallet.

From basic products like sanitizers to immunity boosters, the consumption of health-improvement and sanitary products are becoming a way of life. Germaphobia is not going away anytime soon, and with improved sense of sanitation and hygiene, the demand for such products is unlikely to go down. 

#6 Increasing Preference for Local Stores

With limited mobility and spend allocated to necessities, consumers have been relying on local stores for their day-to-day needs. Many are even making a conscious decision to shop local to contribute to their community’s well-being during this difficult time.

With personalization, high levels of service, convenience and low pricing governing customer loyalty, it’s likely that consumers will stick around to small shops for their day-to-day needs as they develop relationships and experience greater levels of personalization. 

#7 Changing Attitude towards Privacy

In the same EY survey, 53% of consumers in their index would make their personal data available if it helped to monitor and track an infection cluster. From customers guarding every piece of their data to them willingly sharing sensitive information like location — COVID-19 has helped customers build trust in sharing data in a very short span of time.

Over time, consumers will be more and more comfortable sharing their data with retailers if they trust it’s used responsibly, which would help retailers get to know their customers on a whole new level and personalize offers and promotions like never before.

#8 Low Tolerance for Errors

With many more options in the market catering to consumer needs (and local stores taking greater prominence than before), higher service standards have led to higher expectations. Unwilling to settle for anything but the best, customers are surrounded by ample alternatives to their needs as they gain access to more and more products. 

Errors like delayed deliveries, frequent out-of-stock notices or bad customer service are not on the table anymore. Retailers leveraging the opportunity to optimize pricing, promotions and inventory in real time across their in-store and digital channels will continue to hold a majority of the market share, while the rest will compete for a small fraction of the market. How organizations will fare will depend on the choices they make.

For instance, according to a study published by Auburn University, investment in refrigeration, the automobile, and packaging is what helped supermarkets, then known as “combination stores,” survive the Great Depression. A similar challenge arises today, and the question is: Do you want to be A&P and Kroger, or do you prefer to invest in a moment that soon will pass?

Prem Kiran is CEO and Founder of Hypersonix, an AI-driven analytics platform used by Amazon, Smart & Final Stores and hundreds of KFC franchises across the United States.