A closer look at consumer shopping trends during the pandemic.
As many states’ stay-at-home orders continue to remain in effect, consumer behavior is growing more fascinating by the day. Researchers have been tracking the trends around online shopping, noting that there are quite a few factors—including philosophies around shopping during this global crisis, socioeconomic variances, uncertainties and job loss—that all come into play when it comes to the delicate nature of consumer spending during a pandemic. Across the board though, online sales are up—with variation between categories, as the views on what products are deemed essential purchases continue to evolve. Researchers and marketers alike are tuning into the fact that, right now, most consumers are spending with their hearts and not their heads.
In a recent article from Forbes, the author digs into a report from Neuro-Insight that has been tracking the evolution of consumer behavior week by week during stay-at-home orders. “According to Neuro-Insight, people purchase something if they view it as a need or get a strong gratification from it—a process driven by the subconscious rather than a conscious decision. As the length of isolation increases, things once seen as indulgent shifted to be perceived by consumers as essential.”
The story cites the very salient example of alcohol. Neuro-Insight claims that consumer drinking habits fluctuated quite a bit even within the first three weeks of isolation. In the first and third weeks, people viewed drinking as more of an essential than before isolation—but by the third week the novelty of COVID-19 stress and the hedonistic impulse had worn off a bit, with 73% drinking more in the first week compared with 64% in the third. And it seems that trends like this will continue to fluctuate as time goes on and consumers continue to parse not only the length of isolation and COVID-19 protective precautions, but the long-term impacts of the crisis as well.
“Our entire mind is a network of associations that is built over time through our experiences, culture and society,” said Neuro-Insight CEO Pranav Yadav. “As we go through this intense one- or two-month period, a lot of these associations (like how we react to an empty or full fridge) are going to change. And brands need to bring that understanding to the center of their decision making process.”
According to data from a company called Klaviyo, e-commerce sales in particular are on the up and up. Klaviyo breaks items into three main categories: essentials, new essentials and non-essentials. Essentials include food and beverages; new essentials involve electronics and housewares, items that have higher perceived value now that people are staying home all the time. The non-essential category applies to products and services that are much less necessary for consumers right now, like jewelry and consulting services. In the home sector, sales are spiking. And while this does make some common sense, it’s also surprising that, even as many people face financial uncertainty, outfitting their homes is still a high priority.
The reported increases in digital sales are significant, and that’s probably the most notable part of the research. According to data collected by Power Reviews, digital sales are up for their clients by 210 % between February and April. These spikes in consumer spending and demand have also posed challenges for a number of brands: for those that are operating with limited staff, timely fulfillment has become a hurtle. Many smaller ecommerce companies that should be reaping the benefits of increased online shopping now also have to content with the major players that historically sold in person. But for brands handling transactions well, this is an advantageous time from both a revenue and a customer review standpoint. In looking at its data, Power Reviews also found that more consumers are submitting reviews right now and that those review lengths have increased.
Zeroing in on the bedding, mattress and furniture retailing sector, TD Bank polled 102 furniture retail executives and decision makers to learn how the pandemic has affected their industry and their planned response to keep customers engaged. According to those survey results, retailers remain optimistic despite supply chain disruption and they are not so unreasonable in feeling that way. Most reported strategic adaptations to better serve customers, including rolling out enhanced ecommerce platforms, taking communications online, along with offering sales, discounted or free shipping, and increased financing opportunities. Most also reported experiencing brand loyalty from customers despite the crisis at hand.
So what can we make of these trends? Candidly, many consumers are impulse buying right now and retailers are feeding the flames with deals, discounts and free shipping. Consumers that are missing out on social activities may be putting their budget towards home projects and other activities they can do while sheltering in place. The emotion-driven nature of current shopping trends also point to the fact that many consumers not only want novelty in their lives but they also want to connect with brands. As such, making a strong positive impression now could help foster brand loyalty for life.
With so many factors at play and so many unknowns for the future, it is unclear how the current success of online brands and direct-to-consumer shopping will continue to impact the brick-and-mortar retail sector down the line. However, it does seem as though this is a time when many consumers are buying items online they likely never considered before. For some, they may learn that it’s easier than they expected, while others may be reminded of what they miss about the in-person experience. Following this crisis, consumers could react a number of ways—some might flock the stores because they’ve been home and lonely, others may decide that they’d prefer to shop from home just to be safe; many will fall somewhere in the middle, while others still will tighten their belts to save for what feels like an insecure future. Only time will tell.
This story originally appeared in eNews. Click here to get Sleep Retailer eNews delivered straight to your inbox.