COVID-19 caused profound changes in how consumers live their lives and retailers must adapt their selling strategies accordingly.
Erin Christopher, retail and consumer consulting leader at EY, recently sat down with Chain Store Age to discuss how COVID-19 has altered customer wants and needs, and what retailers must do to remain relevant in the still-unfolding “new normal” landscape.
What effect will widespread vaccination have on retail?
A vaccine could have a marked impact on people’s ability to return to ‘normal’, from shopping more comfortably in stores to attending social gatherings to eating inside a restaurant. Our data found that 69% of U.S. consumers who want the vaccine will take it for freedom to do things.
What trends which emerged during the pandemic are here to stay?
Online reigns supreme. There is still significant level of discomfort doing everyday activities, with more than half of Americans saying they are still uncomfortable exercising in a gym, going to a theater/cinema, going to a bar or pub, going to experiential events, and traveling on public transport.
This means some shifts, like shopping online and at-home consumption, may not dissipate anytime soon. Our Index found that 38% of consumers intend to do more shopping online and visit stores that provide great experiences.
People are increasingly concerned about the health of their family, access to necessities, personal finances, and basic freedoms. For example, 57% of global consumers want to make healthier choices in their product purchases in the longer term, and 43% say health or ‘what’s good for me’ will be the most important purchase criteria for them three years from now.
People are not just consuming more at home; they are building their entire lifestyles around their households. Some of these shifts have been forced on them, but many are the result of choices to live differently. Some 48% of consumers globally believe post-vaccine life will be better than before the pandemic, and 36% say COVID-19 accelerated changes they had always wanted to make, reflected in their attitudes around online shopping, product affordability, personal health, and sustainability.
Beyond the pandemic, consumer spending will reflect the different ways people expect to live their lives, how they make choices, and what really matters to them. Most consumers will prioritize affordability or health. Globally, 58% plan to be more aware and cautious of their spending in the longer term and 63% say price will be the most important purchase criterion for them three years from now.
What trends will fade as the pandemic weakens?
Humans are inherently social creatures, and while the shift to online will likely remain, the desire for post-pandemic social interaction and experiences may drive us back to the store to seek something new and different. Some suggest that we’re in store for another era like the Roaring ‘20s, while others believe that it will take time for some to feel comfortable setting aside social distancing practices that they’ve been following since the pandemic took hold.
How can retailers build consumer trust in the post-pandemic era?
When EY launched its first Index in April 2020, nearly a quarter of U.S. consumers said they completely trust brands (23%) and retailers (24%). Fast forward one-year, and the picture is much grimmer - only 10% of U.S. consumers completely trust online-only retailers and chain retailers. Companies need to earn back and maintain trust with consumers through transparency, authenticity and a consistent experience that delivers on the brand promise.
To come out ahead, retail leaders need to consider how people live, not just what consumers buy. Leaders talk about putting the consumer at the center of their business, but few have come anywhere near achieving this. One reason is that consumers have been remained reluctant to share the data required to build that trust; another is that companies have lacked the capabilities to make the right use of the data they do have.
The pandemic has driven an explosion in the sharing and use of consumer data: for example, globally, 62% of people will share data in exchange for healthier product recommendations. If this trend continues, retailers should be increasingly able to move from basic customer segmentation and targeting to achieve personalization at scale and further engender that trust.