COVID-19 & The Future of Commerce
2020 has been a wild roller coaster ride for retailers. A strong start to the year was followed by the precipitous and historic collapse of sales caused by the COVID-19 shutdown. But things have been improving since May.
The U.S. Commerce Department has reported three consecutive months of increases in consumer spending. Those encouraging numbers are a reflection of how people are managing their financial affairs in 2020.
A recent poll from the Associated Press found that “the personal finances of many Americans have remained strong — and in some ways have even improved.” Despite the topsy-turvy economic picture, “63% describe their personal financial situation as good, largely in line with what it was before the pandemic began.” In other words, Americans have money to spend as we head into the holiday shopping season.
Against this backdrop, Treasure Data surveyed 1,000 people about the impact COVID-19 has had on their shopping habits and attitudes. The results offer a glimpse of where we stand today and, more importantly, the opportunities that lie ahead for retailers.
The survey confirmed that small businesses were hit hard in the spring as consumers suddenly changed shopping behavior because of the pandemic-related shutdown. Nearly a quarter of respondents said they bought less frequently from small businesses.
In contrast, 61% said they purchased more frequently from Amazon and other large online retailers. U.S. ecommerce sales nearly doubled in May 2020, showing a 92% spike — much of that going to the large retailers. Lockdowns and changing government mandates forced many SMBs to close their doors permanently. For those that have made it, however, there’s reason to be hopeful.
Shopping After COVID-19
Retailers of all sizes were quick to respond to the pandemic with new campaigns that created a sense of solidarity and reflected the sudden change in everyone’s shared reality. Consumers have taken notice and brands that did this well will likely reap the benefits. Seventy-four percent of respondents said retailers’ responses to the pandemic affected their opinion of them.
The survey sought to gauge what consumers expect from stores in the months ahead and how they plan to approach their shopping needs in the future. In what should be an encouraging note for retailers, nearly half expect to do most of their shopping in stores, with another 7% opting for delivery from local establishments. Forty-four percent will utilize online shopping options. Naturally, most people will continue to utilize a mix of in-store shopping with online purchases.
News reports highlighted the almost instant environmental impact of far fewer cars and trucks on the road. In fact, NASA reported lower fossil fuel emissions visible from space and air quality across the globe dramatically improved. But what about retailers? Should they be concerned with new consumer preferences brought on by the pandemic? The answer is an emphatic “yes.”
A resounding 63% said they purposely seek out sustainable brands when shopping. And since the pandemic, 33% of people said shopping sustainably is more important to them now than it was before.
When asked about sustainability, respondents showed a range of concern for the amount of packaging used to fulfill their online shopping orders. For instance, 65% expressed a level of concern over the environmental impact of extra packaging in online orders.
Another opportunity for retailers to win trust is with their cleaning protocols. A whopping 90% of customers said a cleaning protocol will have some impact on their decision to continue shopping with a retailer. There’s never been a better time to display a clean and sanitary business to your shoppers and partners.
Know Thy Customer
Understanding and, when possible, predicting your customers’ attitudes and preferences is critical to staying competitive in today’s market. Among the marketing technologies available to retailers, customer data platforms (CDPs) are a foundational ingredient for the automatic collection and activation of individual customer information. For retailers in the post-COVID world, serving customers with the right offers, at the right times and through the right channels will be essential to success.
Tom Treanor is global head of marketing at Treasure Data.