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08/15/2022

Consumers reimagine retail shopping

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Retailers must adjust to new omnichannel consumer behavior.

It’s no surprise that online shopping for goods and services reached an all-time high during the pandemic.

Digital Commerce 360 estimates that over the past two years, the COVID-19 pandemic contributed an extra $218.53 billion to e-commerce’s bottom line

And as the pandemic begins to subside, retailers are grappling with a radical shift in consumer behavior. Free from lockdowns, most retail consumers have resumed visiting their favorite brick-and-mortar establishments, but e-commerce continues to see strong support.

This blend of offline and online shopping has given rise to a new breed of consumer—more savvy, digitally reliant, and price and value conscious than ever before. It places retailers in a unique and challenging position. To capitalize on trends, they need to determine what’s driving consumers to shop retail and mold their business strategies accordingly.

When retail stores reopened, it was natural to assume online purchases would decline. They haven’t and trends show a strong future for the web. A Statista Digital Market Outlook forecasts retail e-commerce to climb steadily from $768 billion in 2021 to more than $1.3 trillion in 2025. Popular pandemic products — sports apparel, cosmetics, software, electronics and home improvement — are expected to command a good revenue share.

Additionally, consumers are expected to focus their spending on goods rather than services like travel and leisure, just as they did during the pandemic. Also resonating with consumers are online and physical stores that sell sustainable products or embrace sustainable business practices. According to a study by McKinsey, one out of four consumers say they plan to focus more on environmental issues and will pay more attention to social aspects in their shopping behavior.

Be it a boon or a bane for retailers, today’s consumers are willing to switch their preferred brands for ones that offer value or other novel incentives. Innovation, even more so than price or fast delivery, is imperative for brands to win consumers over.

However, the most notable changes in the retail consumer mindset, pertain to how and where they choose to shop. For e-commerce, this shift is largely due to supply chain issues and shipping delays. Instead of dealing with long delivery times for brands they love, consumers are switching to products they can get quicker, cost less, and from a retailer who offers something unique — be it a clever, eco-friendly twist on a product, a strong social media following, or philanthropic endeavors.

Retailers have responded by reinventing their digital presence with exciting promotions and greater social media exposure. Meanwhile, e-commerce is catering to consumers’ desire for more personalized experiences through online services like virtual assistance, consultative shopping, try before you buy, and other engaging and creative digital strategies.

With challenges come opportunities and brick-and-mortar retailers are finding themselves in a unique position to get products to patrons faster than big e-commerce players by offering same-day delivery.

They’ve also upped their game with the continuation or addition of multiple fulfillment options like self-checkout, curbside pickup and buy online, pick up in-store services — all practices today’s shoppers embraced during the pandemic and now expect in the “new normal.”

According to a study by Square, one in five shoppers say a lack of buy online or pick up in-store options would make them avoid certain retailers, proving how crucial added flexibility has become. It’s about speed and convenience, these days. Technology and automation hold the key to success for traditional storefronts.

Omnidirectional consumers, those who use both online and in-person resources to choose and purchase products, will also drive retail business going forward.

For example, an omnidirectional consumer might see a product on Instagram, go to the retail establishment’s online store to learn more, go to the store to pick it up, and pay for it online.

While in the store, they might use apps to assist with wayfinding, get online visibility of a store’s inventory, and scan QR codes for price checks. Omnichannel strategies are gaining momentum.

All of this equates to a seamless shopping experience for consumers yet a confusing time for retailers. Shopping for and purchasing products from a combination of sources, today’s omnidirectional consumer is difficult to gauge.

Retailers who can unlock essential consumer behavioral data and insights, stored on one unified software platform that’s easily accessible to key stakeholders and employees, will be able to create winning omnichannel experiences for their consumers.

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