While COVID-19 has absolutely changed how consumers shop, it has yet to stop them entirely. We’ve seen how retail has waxed and waned over the last decade, with brands struggling to unify in-store experiences with the comfort and convenience of online shopping. And now, in the midst of global disaster, retail brands are being put to the ultimate test. Radical transformation is happening at every turn. The world has changed. Consumers have changed. Now brands must change, too. These are the trends to know—reflections of the Pandemic Age and blueprints of the future.
Retail was already having a challenging time getting customers into stores pre-pandemic. Then came necessary but industry-crushing blows that halted foot traffic all together. According to The Balance, brick-and-mortar sales declined 14% during the first wave of restrictions when compared to the previous year. Yet, in a sign of great encouragement, sales increased 7.5% in June when many stores were allowed to reopen. That’s a jump many analysts thought would be more severe. It answered a very real question: Will consumers come back? They did.
What this tells us—and what Retail Dive confirms—is that 80% of people will still make time in their day to purchase items from a physical location. Yes, the same items they could’ve purchased online. We agree with Michael Binetti, analyst at Credit Suisse, who says eCommerce is a starting point for consumers and that in-person experiences still matter.
No one can deny that many consumers will forever favor buying online (eMarketer projects that eCommerce sales will rise to $6.5 trillion by 2023). They accounted for 56% of all retail sales last year. But perhaps the threat of brick-and-mortar storefronts disappearing good will drive these shoppers back in some way.
For now though, eCommerce sales are on the rise. Retail trends have always served as a telling snapshot of daily American life, current events, and interests. Products seeing the most sales are those that make people feel more comfortable at home (office supplies, health and beauty, housewares, hobbies, etc.)
Buy-Online-Pickup-In-Store (BOPIS) functionality (like we created for our friends at Big Lots) is now expected by consumers for its convenience. Unfortunately, many brands didn’t invest in perfecting this buying option pre-pandemic. Worse off are the brands that refused to adopt it outright. Because now, beyond all of the ease, there’s a new major selling point: safety.
Curbside pickup and in-store pickup have helped many brands sustain cashflow during these trying times while winning over customers with a strong message of unity. eMarketer expects this type of shopping behavior will translate into $58.52 billion in sales for 2020 (up 60.4% from its initial forecast).
Look to two major retail players, Target and Walmart, for proof says consulting firm McKinsey & Company. With drive-up pickup as a buying option, Target’s purchased items increased 278% and overall eCommerce sales increased 141%.
Walmart reported 74% in its eCommerce business, which is enough to expand their newly introduced “express delivery” option to additional markets.
These successes only happen when BOPIS is done right. Remember, it’s supposed to make shopping easier and never harder. For brands with experiences prone to error or ambiguity, results trend the opposite direction.
Brand loyalists are abandoning mid-range items for those in value retail. As jobless rates plummet and saving becomes reactionary, customers still want to shop while spending less. Luxury items from luxury brands are still favored, though non-luxury items are being sought out with less brand name scrutiny.
Top-performing categories according to eMarketer include Food & Beverage (expected to hit 58.5% of sales) and Personal Care & Beauty (expected to hit 32.4% of sales). Spending on grocery items grew 37% in April compared to the month prior due to online delivery and BOPIS. Amazon remains the leader of the space, with 62% of Americans claiming to have purchased food or beverage products from the site in April.
Furniture is another high-performing category, especially value-minded retailers such as Wayfair and Overstock. Much of this can be attributed to consumers needing at-home office supplies and outdoor furniture for their homes.
Most interesting is how demographics of online shoppers are shifting, including a 12.2% increase for those ages 65+.
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