By Savanna Heishman
In late 2019, the world was introduced to a pandemic that would alter how we live our lives in 2020. This pandemic has affected everyone- from our everyday routines, work schedules, and spending habits. Many businesses took a major hit when lockdowns and stay-at-home orders were first introduced in early 2020. In addition, consumer spending habits have slowed for the time being. As we have become more acclimated to this new lifestyle, there has been a noticeable shift in how consumers are spending their money. We know that most businesses are scrambling to figure out their next move for the holidays. Therefore, we have compiled a list of different strategies and spending habits to consider in the coming months.
When stay-at-home orders were first put in place earlier this year, many consumers were forced to work from home, self isolate, and practice social distancing. Because of this, we expected a rise in online spending. Many people started ordering their groceries online for delivery or curbside pickup. Plus, food delivery was essential, and Amazon packages were arriving more frequently. While many businesses have been able to efficiently accommodate consumers during this online spending era, it is important for these businesses to also consider how to continue this in the future. If we are being honest, we do not expect this online spending trend to end anytime soon.
In what ways has consumer spending shifted due to COVID-19?
Whether we like it or not, we have all been forced to adjust our shopping habits due to COVID-19. Even people who are not as tech-savvy have been adjusting to this era of e-commerce spending. As a matter of fact, women and baby boomers have shown the most significant change in their spending behaviors. Both groups have been slower to change their behavior compared to their gender and generational counterparts, but they are now in greater alignment. For example, while millennials report the greatest impact on purchase decisions (80%), baby boomers now have aligned behavior with millennials, with 73% of baby boomers saying the same. This goes to show just how impactful the effects of COVID-19 have been on all genders and generations.
According to Digital Commerce 360, 56% of consumers reported that they have visited significantly fewer brick-and-mortar stores since COVID-19 and stay-at-home orders began. This is all the more reason for businesses to have a greater focus on their online presence and promotions. While the larger companies such as Amazon and Walmart are doing just fine, there is hope for local companies too. 38% of consumers reported that they purchased from their local stores to ensure their success and survival. While consumers may be buying their essentials from big-box retailers, they are also considering local businesses.
How should your business adjust to this trend for the future?
As of recently, most stay-at-home orders have been lifted and consumers are able to visit brick-and-mortar stores safely. While this is great for consumers and for businesses financially, the emphasis on online shopping is still very prevalent. Many companies have noticed how easy it is for them to operate their business from home. Similarly, consumers have found that it is convenient for them to shop from home even with stores being open. While 65% of people said that by October, they would be comfortable visiting stores again in person, 88% of people said they would still continue purchasing gifts online and sending them to recipients. This change in consumer spending is definitely something for businesses to consider while they plan for the following months.
With the holidays only being a couple of months away, businesses should start considering what type of customers they want to market to, which products to release at the right time, and begin analyzing future demand for specific products. Businesses who can analyze those things efficiently will be better positioned for the rest of the year.
What to expect for the holidays and beyond
Most businesses should expect the holidays this year to be pretty unpredictable. But while spending habits may be unpredictable, businesses can still set themselves up for a successful holiday season. Here’s what consumers are looking for in the upcoming months as far as online shopping:
- 39% of consumers stated that they would want faster delivery options
- 30% of consumers stated they would like more detailed product information and photos while shopping online
- 24% of consumers said they would appreciate more efficiency at check-out
Businesses can also expect to appeal to more customers by offering promotions widely and often since 42% of consumers stated that they purchase from the website that offers the lowest cost. Businesses should also consider how important omnichannel has been during the past couple of months. They should also consider that for the future as well. In a recent study, over half of consumers stated that they have recently checked online for available products at a nearby store. 41% of consumers actually ordered online and picked up their orders in the physical store.
Overall, it is difficult to know what to expect when it comes to consumer spending for the upcoming months. Everything is so up in the air. However, there are many ways businesses can set themselves up for a successful holiday season while also considering the changing needs of their customers. In a nutshell, we can confidently say that digitizing the supply chain will be crucial to success in the new retail reality of 2020 and beyond.