Shopping patterns in the US have changed dramatically since January 2020, when the first coronavirus case was reported in the US.
Consumer spending plunged amidst lay-offs and shelter-in-place orders. Over a 100 retail chains pulled down their shutters temporarily in March and April 2020 and unemployment skyrocketed. However, this decrease in spending did not affect all retailers equally.
Niche and boutique stores without an online presence suffered the most, as consumers migrated to big box stores and online shopping to satisfy all their shopping needs in fewer trips.
A year after the pandemic began, in April 2021, we’re seeing a resurgence in consumer spending with the US vaccine rollout and as businesses reopen.
We surveyed 1,200 shoppers across the US to learn more about their shopping habits and preferences. What we found is that a majority of US consumers are shopping online either via websites (41%) or apps (16%). And with the effects of the pandemic likely to stretch beyond the near future, this trend is unlikely to change.
Omnichannel retail will be the new normal
The unprecedented conditions caused by the coronavirus pandemic threw the spotlight on a trend that has been around for over a decade: omnichannel.
Omnichannel retail not only implies a brand’s presence in multiple channels (e.g. ecommerce and brick-and-mortar stores), but the integration of inventory, customer service, and sales to offer a seamless transition between channels based on what the consumer finds most convenient.
While previously, omnichannel retail strategy was considered too expensive or complicated to execute, two major developments are forcing retailers to consider it as not just an option but a necessity:
On the one hand, the pandemic has forced consumers to adopt new shopping behaviors they may not have otherwise. A phenomenal number of Americans turned to online shopping to stock up while staying at home in 2020.
On the other, recent developments in IT infrastructure and data analytics have made it possible to track a customer’s journey across multiple touchpoints, from social media ads and interactions, to the website, app, chat, customer service calls and email, and finally back to the brick-and-mortar store.
We’re already seeing rising consumer expectations regarding omnichannel retail in action. 2020 saw an explosion in curbside and in-person pick-up as consumers sought new ways to shop.
And it’s not just Gen-X and millennials who’re driving omnichannel retail. Older shoppers are opting for in-person and curbside pickup to get products faster while adhering to social distancing norms.
Curbside delivery also offers retailers the additional benefits of slashing last-mile delivery costs while giving customers the joy of same-day delivery.
Older shoppers more likely to return to stores
Despite this boom in online shopping, it’s not quite the end of brick-and-mortar either. What we see is that specific groups of consumers are motivated to return to store for perhaps very different reasons.
Middle-aged and older shoppers are more likely to opt for in-store shopping since they prefer to “touch and feel” products before purchasing (76%) and take items home immediately (66%).
This remains one of the biggest drawbacks of online shopping: shoppers remain uncertain about the actual quality or fit of the product until it arrives at their doorstep. Combined with sometimes complicated returns processes, online shopping can feel like playing a slot machine: the anticipation is exciting, but the outcome, underwhelming.
Men more concerned about data privacy and security
Though consumers of all ages are both spending more time online as well as shopping more on social media sites, they expressed concerns about sharing data to make this customization possible.
Consumers are now increasingly aware of how their online lives are being tracked by giants like Google and Facebook and sold to advertisers to create personalized ads.
This presents one of the most significant obstacles to a truly omnichannel experience: that users don’t want their online activity to be tracked and we may soon see legislation preventing the same.
Users may also move to other search engines like DuckDuckGo and messaging apps like Telegram and Signal to protect their data. However, the usage of these services is still limited compared to that of Google or Facebook.
Other issues that can make online shopping a frustrating experience include unclear return policies (34%), digital payment failures (32%), and difficulty finding the product on the website or app (27%).