After the World Health Organization (WHO) announced COVID-19 as a global pandemic, we’ve seen a huge shift in the way people are conducting their business as well as their shopping behavior. Businesses are closing down and unable to sustain their operations, workers are losing their jobs, and the global economy is experiencing the worst hit in decades. The retail industry is quickly evolving. Retailers are now forced to adapt to the changing times if they want to stay afloat. As a result of the pandemic and stay at home directives, non-essential stores are temporarily closed while some stores that are allowed to remain open are suffering from low revenue due to the limited number of customers. The pandemic has significantly affected the buying behavior of consumers as more and more people are moving their purchases online. Experts continue to analyze the changes in consumer behavior. E-Commerce Categories Affected by Coronavirus The pandemic has left a huge dent on the economy as well as every other aspect of one’s life. In terms of online sales, experts expect it to grow to an estimate of trillions of dollars in the next three years. Since the pandemic began, the e-commerce industry has catapulted dramatically. To understand the trend, we’ve gathered a list of the top 10 e-commerce industries that have progressed and declined since the pandemic based on year-on-year (March 2019 vs 2020).
Top 10 Fastest-Growing Industries (ranked from top to bottom)
Cough and cold
Grains and rice
Milk and cream
Top 10 Fastest-Declining Industries (ranked from top to bottom)
Men’s formal wear
Boy’s sport shoes
The travel industry is hugely hit by the pandemic which is why luggage, cameras, and swimwear are included in the top declining categories. With vacations on hold, consumers do not feel the need to buy travel-related products or services. Instead, they are redirecting their budget towards items they find more useful.
Shopping Trends in March 2020
According to Bazaarvoice Network, customers started to resort to online shopping during the earliest stages of the lockdowns in March 2020. Consumers have set up the idea that they will be staying at home for a long time. This mindset has led to a 21% rise in online shopping.
Based on a survey, 41% of the respondents said that they are buying things online that they would normally purchase in physical stores. Along with the data, research shows that the page views have also increased.
More people are spending more time online searching for new products, especially since they are stuck at home. However, some are buying brands that are relatively unknown due to limited product availability. Consumers are starting to buy non-essentials too.
While people are prioritizing essentials, they are also seeking for other ways to keep themselves entertained while at home. When comparing the year-on-year page views and orders, the top categories are food, beverage, toys/games, and sporting goods. Meanwhile, the buying behavior of consumers in the category of apparel and accessories has decreased.
The main reason for the decline may be due to the fact most people prefer to buy under this category once the lockdowns have been lifted. This way, they can personally check the products. Bags and luggage are down because consumers do not need these items since they are not allowed to travel.
Shopping Trends in April 2020
In April 2020, the trend for online shopping grew compared to March. This means that page views and online orders dramatically increased. Even customer reviews are up. The growth in April based on year-on-year is at 32%.
Research shows that brands should learn to engage their customers. How can you do that? By encouraging questions and answering them, brands can keep their customers feel more important. Businesses should also analyze consumer reviews to improve the overall customer experience.
Data shows that toys/games, arts, pet supplies, and sporting goods have the biggest number of page views. The food and beverage category is no longer included in the top five industries. There has been a change in the pattern of how consumers are buying online. It’s important to note that people are spending more time at home with the mindset that they will be staying at home for a longer period. They are also moving from buying necessities to non-essentials to keep themselves entertained. How Consumer Priorities are Changing As a result of COVID-19, consumer priorities are changing. Before the pandemic, consumers are buying products based on quality, price, and brand respectively. However, since the lockdowns began, shoppers are buying based on the availability of the products followed by price then quality.
The availability is a huge concern where more than half of survey respondents said they have experienced a lack of product inventory in stores where they usually make a purchase. Only 30% of them feel that they are able to get all their necessities from the store. As you may notice, there is a shift in the priorities of consumers with an emphasis on availability. During this time, people are starting to try new brands they would not have normally because it may be the only option. Hence, consumers are discovering new products that may affect their shopping patterns in the future. Most people are also starting to focus on their health during this crisis. Many are taking up some form of exercise that they can easily do at home with some of them declaring the intention to continue their exercise routine even after the quarantine is lifted. The Importance of Mobile Devices When it comes to online shopping, 67% of customers say that they do their virtual window shopping and research on their smartphones. This shows the power of mobile devices and how it plays an important role in online shopping. In addition, 77% of them buy on an impulse. In case they initially abandon their cart without buying, data shows that 70% of them will return to make a purchase within one hour of viewing the product. Mobile buying is quickly catching up because its more convenient for people, especially those who are on the go. Customers can buy in one click anytime, anywhere with just their smartphone. Data shows that 49% of consumers use their smartphones for online purchases. People use their mobile phones for various purposes. They use it to search for products, compare prices, and buy items.
Hence, businesses should set up an effective digital marketing campaign focusing on mobile marketing and search engine optimization (SEO). Optimizing your mobile phone is crucial as experts predict that it may soon take over the majority of online sales. Make sure your mobile site or app is updated and easy to use. Changes in People’s Work Conditions One of the reasons behind the changing behavior of consumers can be attributed to their current circumstances. People’s situations have a direct impact on their shopping behavior and what products they are prioritizing. When it comes to their working environment, more than one-third of respondents said that they are working regular hours while 22% were laid-off and less than 10% are expecting their work situation to change based on the current circumstances faced by their employers. Meanwhile, the remaining said that their working hours were reduced along with their salary. With the uncertainty of this pandemic, we may continue to see more changes to the working environment which can also have an effect on their buying decision. Many small, medium and large-scale businesses are wondering if the changes in consumer behavior will continue to evolve even after the pandemic is over. We’ll just have to wait and see. What Retail Companies Should Do Businesses should focus on analyzing the changes in consumer shopping behavior and how they respond to the effects of coronavirus. Many are asking whether this outbreak will cast a long-term effect on consumer behavior and online shopping. Businesses will want to know what people will prioritize and what they will most likely buy online. Based on the past couple of months, we’ve seen a huge surge in online shopping across various industries and categories. Many businesses are already working hard on giving consumers the ultimate online shopping experience. They are improving their websites’ user experience, delivery turnaround, and updated product information. At the same time, this change has propelled the implementation of e-commerce across different industries and categories. E-commerce sites that provide a simple, convenient, and seamless process for consumers, will most likely enjoy a higher stream of revenue compared to those who have a slow turnaround time.
Amazon, the world’s biggest online retailer declared that they are unable to keep up with the demands of consumers. They announced that there will a delay in the delivery of their non-essential goods. How Retailers are Adapting to the Changes Most businesses are learning new ways on how to ensure the survival of their business. Here are some examples of how businesses are quickly adapting to trend during this difficult time. Contactless delivery - Many retail businesses are slowly adapting to the situation by ensuring the safety of their employees and customers. They are moving their operations through online delivery and returns. The contactless delivery method was introduced by several e-commerce retailers such as Alibaba. Other food service providers also use this method for customer take-outs. This method is used in implemented in China wherein the customers are informed with the chef and driver’s temperature to ensure the safety of their service. Meanwhile, other countries have yet to replicate this process. Meanwhile, other countries such as the US and UK have already started to use contactless delivery to maintain their online operations. Third-party pickup services - Even as physical retail stores start to open a lot of people have announced that they will still refrain from going out and visiting shops. Most people are still unwilling to expose themselves to busy locations even with social distancing to avoid getting infected by the virus. Another option for consumers is through third-party pickup services such as lockers. This prevents physical contact as long as they are assured of the cleanliness and safety of the facility. Extended returns – Some customers are unable to return items due to lockdowns and stay at home orders. To address this, many retailers have extended their return policies to a certain number of days. While there may be longer return periods, most customers will not wait too long to refund their items.
According to retailers, they are expecting a rise in returns, especially in the category of clothing and footwear. This situation pertains to customers who have bought non-essential items for special occasions such as events but can no longer use due to the restrictions of social gatherings. Hence, retailers should be prepared to receive a number of returns once their stores reopen. Final Thoughts As more people continue to take shelter inside their homes during this pandemic, the demand for online shopping has dramatically increased. It has now replaced the need for physical stores, especially since retail shops continue to remain closed during the lockdowns. The changes in consumer behavior may be attributed to various reasons we mentioned above. With the booming e-commerce industry, data shows that consumers are now shifting their focus from essentials to non-essentials particularly entertainment-related products. Most consumers are quickly adopting the mindset that they will be spending longer hours inside their homes. This allows them to adjust to the new normal even after the quarantines are lifted. Businesses whether small or large should take this time to switch their efforts online. Make sure you guide your customers to a smooth transition from offline to online shopping. With an effective digital marketing strategy in place, you’ll be able to prevent your company from shutting down. Instead, take this opportunity to build a new channel to create more opportunities by tapping new customers and widening your market reach.