CSA Exclusive: EY sees permanent shifts in consumer behavior
Consulting firm EY expects the post-COVID-19 “new normal” to include many current consumer trends.
Jeff Orshell, EY Americas consumer retail leader, recently shared his thoughts on how retail will continue evolving in 2021 and beyond, as the COVID-19 pandemic begins to subside. Orshell, who believes the last year of COVID-19 has likely created a decade’s worth of change in retail, offered insight on how e-commerce, supply chain, and customer experience will develop in the coming year.
A premium remains on e-commerce
At the end of 2020, the EY Future Consumer Index revealed that 78% of U.S. consumers are still changing the way they shop. With that, 46% are shopping more often online for products they previously bought in stores, and 54% are visiting brick-and-mortar stores less than pre-pandemic.
E-commerce has become a retailer's lifeline and will continue to play a pivotal role not only in keeping companies afloat, but also in building long-term consumer loyalty. If they haven’t already, we can expect to see traditional brick-and-mortar retailers invest in strategic technical and digital acquisitions in areas including artificial intelligence (AI), blockchain, and logistics to create and strengthen their digital presence. But this is just the beginning; the entire culture around retail has shifted, and retailers must shift with it.
As places and spaces evolve, winning companies will be those that understand the channels, touchpoints and experiences that create lasting bonds beyond the pandemic. This means reimagining how to bring creative and personalized experiences to consumers without the physical touchpoints that they’ve relied on for decades.
The industry will shift from a transactional process focused simply on shopping and buying, to a connected ecosystem built on deep, enriching relationships across all touchpoints. For retailers, all parts of your organization will need to be ready and able to consistently deliver that experience.
Supply chains continue to course-correct
According to EY, 35% of consumers will buy online and pick up in store more often in the future, meaning the store will continue to play a pivotal role in last-mile delivery. But, curbside or in-store pickup can quickly lose its luster if consumers endure long wait times or if they arrive only to find their local store inventory can’t accommodate their online purchases.
At the end of the day, the consumer experience is dependent on successful last-mile delivery, inventory visibility from the manufacturer to the shelf, and knowing where and when products need to be available. Only 21% of US consumers are willing to forgive retailers and brands for service disruptions due to COVID-19.
It’s certain that consumers are not viewing the pandemic as an excuse for delayed services or poor experiences. But with current complications around the shipment of the COVID-19 vaccine, it’s likely that the already strained supply chain will get even more stressed. The next few months will be critical for retailers as they rethink inventory planning, rejigger their broader retail ecosystem, and look to investments in digital capabilities to enable e-commerce logistics, last-mile capabilities and asset-light approaches – such as ghost kitchens and dark stores.
Shopping reinvents as experiential
The consumer experience is rapidly evolving from a transactional process focused simply on shopping and buying, to a model built on deep, enriching relationships at every step of the journey. Retailers and brands must become an indispensable part of consumers’ lives. They must build a sophisticated understanding of the way consumers live, eat, shop, work and play – and use this knowledge to provide value in the right place, at the right time.
In the last few months, we’ve seen Americans leave big cities, in favor of their less crowded suburbs. The Index shows that 26% of respondents plan to move to less densely populated areas. As consumers’ living situations continue to change, the whole notion of convenience is changing with it.
To stay competitive, shopping centers need to satisfy consumers’ new demands, whether that’s the integration of essential shopping, such as grocery, the convergence of adjacent industries, such as health care, or adding an experiential destination to the consumer journey. Retailers can do this is by investing in consumer data platforms, which, when used correctly, can provide insight in consumer shopping habits and preferences and pave the way for greater business performance, tailored to different locations.