One of the biggest changes in consumer behavior is how consumers shop for goods. In the last few decades, shoppers have changed their ways, and now shop primarily online. These new habits are a result of new technologies and the Internet. But does this change in shopping behavior lead to health, safety, and financial risks?
Online shopping
When it comes to shopping, consumers have been reshaping their habits in recent years. This has happened in many categories, but one that has changed the most is ecommerce. Ecommerce helped to simplify the shopping experience. It gave consumers access to stores anytime, anywhere.
Ecommerce also made buying cheaper. As a result, online shoppers have been flocking to websites for everything from groceries to personal care products. In fact, the Adobe Digital Economy Index estimates that over 1 trillion visits have been made to U.S. retail sites over the last year.
According to a recent PwC survey, consumers are shifting their shopping habits. More than half of respondents said they are now more inclined to shop online, while a third are shopping more at local independent retailers.
Another key finding is that over half of US consumers have made an online purchase in the past year. That number jumps to 75 percent when you factor in the increase in use of smartphones.
Aside from the convenience of online shopping, one of the biggest benefits for consumers is the opportunity to choose from a variety of quality brands. Online consumers are also keen to receive free shipping, return policies, and fast delivery options.
Moreover, a recent PwC survey found that over half of all consumers have made an online purchase, compared to just over a quarter in 2018. The survey covered nine countries.
While this report is not comprehensive, it does offer a glimpse into how online shopping has changed consumer behavior in the last few years. However, some factors outside of ecommerce may be contributing to the shift.
One major reason that consumers are changing their online shopping habits is the emergence of social distancing. People who enjoyed being able to work at home and not go to crowded spaces, turned to shopping online more frequently.
Consumers are reshaping their habits in the post-pandemic era. They are less likely to be homebodies, and more likely to focus on getting value for money. Some factors influencing these changes include increased use of digital devices, new touchpoints, and a desire to reduce physical touchpoints.
Millennials
The millennial generation, sometimes referred to as Generation Y, is the youngest members of the American population, which reached young adulthood in the early 2000s. Although they constitute a relatively small portion of the American population, the impact of Millennials on consumer shopping is significant.
While the majority of millennials prefer to shop in stores, they are also making the shift to online shopping. According to a recent survey, nearly half of millennials have switched to online shopping from physical stores.
One of the key reasons for this change in behavior is that millennials are becoming more price conscious. They are often willing to spend on brands that have compelling values and offer a low cost.
However, even though millennials make up the largest segment of consumers in online shopping, Gen X and Gen Z also have shifting buying habits. Compared to the millennials, the Gen X and Gen Z groups are less likely to be brand-driven. Instead, they are more focused on quality, price, and reviews.
A recent survey found that young adults are putting off major life decisions. For example, they are putting off marriage, children, or buying a house. In fact, the majority of consumers report that they have made non-essential purchases in the past three months.
Despite the economic pressures, 75 percent of US consumers have tried new shopping behaviors. In particular, millennials are leading the change in the way they shop. Almost one in five millennials prefer to purchase products through a company mobile app, and twenty-one percent prefer to purchase through Facebook.
Several retailers are trying to attract younger Millennials. But while there are many opportunities to do so, marketers are also facing a lot of challenges. Among them, younger Millennials are less likely to trust traditional marketing tactics. That’s why they prefer social media and websites that market directly to them.
Despite these obstacles, marketers are seeing the potential of the millennial generation. Millennials account for 3% of total consumer spending, but they represent a much larger percentage of the online marketplace. Therefore, it’s important for companies to keep track of this audience’s preferences and buying habits.
COVID-19
In the past couple of years, we have seen a dramatic shift in consumer behavior. As the world continues to cope with tensions across the geopolitical and economic landscape, the economy and consumers have responded. Consumers are shifting to the digital age and expecting seamless experiences.
To help consumers navigate this new world, retailers have been implementing technological innovations. These include curbside pickup and contactless pay. While these innovations might be rolled back for cost reasons, they do offer significant benefits for both retailers and consumers.
Before COVID-19, the “buy now, pay later” was a common tactic. This method of financing enabled equal payments. Using it in the context of a purchase is a good example of the most obvious consumer behavior change.
The pandemic outbreak also prompted a more rational approach to shopping. Many retailers limited purchases of high demand items. They pushed consumers toward products that would improve their well-being. For instance, hand sanitizer was a top item for sale during the pandemic.
Overall, the pandemic has changed the way consumers think about money and time. They are more careful with their spending habits and save more. Some of this is due to inflationary pressures, but it’s a result of the shift in priorities as well.
One of the most notable changes was the increase in food away from home and cleaning product sales. With supply chains strained, this has forced consumers to adapt.
Another ecommerce related innovation is the introduction of contactless pay. When paying for an item, the consumer signs up with a lender. Instead of swiping their card, they simply tap their phone. Retailers are recognizing the benefit of this practice.
The best part about this type of technology is the convenience it brings to consumers. The “buy now, pay later” trend is not likely to go away. Moreover, the “buying local” trend is making its presence felt. By combining brick-and-mortar retail with the online experience, retailers are improving the customer experience.
There are many more trends that will continue to evolve in the coming years. Nevertheless, the pandemic has shifted consumer priorities and given rise to a more rational, time-conscious, and saving-conscious lifestyle.
Health, safety and finances
COVID-19 is a pandemic that has affected consumer purchasing behavior in many ways. It has caused consumers to be more cautious about their spending. In addition, it has sharpened consumers’ sense of time. Many have also adjusted their shopping habits to take advantage of online purchasing options. However, the effects of COVID-19 have varied by demographic characteristics.
As part of the COVID-19 study, a questionnaire was administered to determine the extent of changes in consumer buying behaviors. The questionnaire was divided into three sections. First, socio-demographic profile questions were asked. Next, the respondents were asked about the impact of COVID-19 on their lives. Third, they were asked about how they have adapted their buying behavior since March.
During the outbreak, most consumers reported experiencing product shortages. However, as regions opened up and consumers adjusted to new operating norms, store closure impacts decreased.
In response to the swine flu epidemic, many people were forced to hold off on non-essential purchases. In addition, many consumers chose to stock up on extra goods. This resulted in the total impact of COVID-19 falling below 80% for the first time twice.
In the weeks following the outbreak, over half of consumers rated themselves as “Very Concerned” (10/10) about their health and safety. They are still hesitant to resume regular activities outside the home. Similarly, nearly a third of consumers are ordering more takeout. Despite these concerns, consumers are continuing to incorporate new brands into their shopping routines.
Market studies conducted on COVID-19 showed a rise in the demand for hygiene products. Among other categories, cleaning products, staples and entertainment products have increased. Affordability, the awareness of health and hygiene, and lifestyle have all played an important role in the increased demand for these items.
Consumers are impacted by a number of factors, including the cost of health care, the social and emotional toll, and the ability to find products and services. As consumers become more aware of the health and safety risks, they are more likely to make purchases online.
Overall, the consumer impact has remained relatively high, although it has dipped below 80% for the first time in two months. As the COVID-19 pandemic continues to evolve, it is imperative that consumer goods businesses prepare for the potential impact of the disease.