Zach Thomann: executive vice president and general manager, PFS
COVID-19 has forced many U.S. consumers to alter their shopping preferences. Consumers are now finding themselves shopping with what is available versus what is preferred. While many shoppers are still loyal to the brands they love, COVID-19 is driving an even greater change in mindsets. This shift impacts the type of goods and brands consumers can purchase and the shopping channels they use.
These changes are likely here to stay long after the pandemic is over. Consumers are living, shopping and probably thinking differently than ever before. Social distancing came as a shock to many people and early consumer behaviors were sporadic. Yet, now that we have had time to digest our current landscape, new actions have become standard, as 90% of consumers across the globe expect COVID-19 to impact their routines for more than 2 months after the lockdown. For brands and merchants, this means being aware of this shift to best position themselves for success in our new reality.
Consumer brand loyalty is tied to availability
What we’ve seen tested early on in the pandemic has been brand loyalty. Companies spend millions on building a brand and curating a seamless customer experience. Per our recent U.S. consumer research report, 44% of U.S. shoppers have tried at least one new brand during the COVID-19 pandemic because their standard brand was either unavailable or took too long to be delivered. As well, this figure rises to 56% for millennials and is the lowest among baby boomers.
Few companies could have prepared for the fallout due to COVID-19 and the lingering impacts on supply chains and delivery. Many consumers have been forced to look outside their preferred brands due to what is available in their geography. For luxury items, some shoppers may be able to withstand longer fulfillment times; however, for essential goods, household items or consumables, shoppers will likely be forced to go with what is available. Thus, consumers are now experiencing interactions with new brands for the first time.
These are make-or-break moments, as shoppers are admittedly purchasing these brands because of their availability. A poor ecommerce experience could turn-off a shopper for good, while a seamless experience could lead to a new brand advocate. Our research shows that, during the COVID-19 pandemic, 45% of U.S. consumers have shopped with online retailers they have not previously used and intend to continue shopping with them based on their excellent experience.
Adapting channel strategies
Apart from changes to brand loyalty, COVID-19 has also summoned challenges across shopping channels. With social distancing in place, ecommerce has essentially become a single platform for consumers to buy goods. This has put further strain on the supply chain, as many brands were not prepared for Black Friday levels of ecommerce volume at the end of Spring, which led to many ecommerce sites unable to fulfill orders on specific goods. While some shoppers have jumped to other brands, this is not always the case. According to our recent report, around 30% of consumers would shop around if their preferred brand was not available from their preferred website, rather than buy from a different brand.
Also, Amazon’s decision to delay shipments of non-essential goods has led to significant behavior changes for both consumers and merchants. From our report, 28% of consumers have moved away from Amazon as their preferred website for online shopping since Amazon has changed their shipping policies, raising to 39 percent for millennials. Consumers have navigated new channels to find goods, and merchants have to pivot to try new sales and delivery channels. This makes it clear that non-traditional fulfillment methods like pop-up distribution centers can provide a flexible and cost-effective solution to this issue for brands.
Consumers have also shown an affinity to cut out the middleman and buy directly from brands themselves. 39%would prefer to shop directly on a brand’s website rather than a marketplace website. Thus, DTC brands must be ready to cultivate a seamless experience for shoppers straight from their site, from check out to last-mile delivery.
Many retailers have had to rethink their approach since the onset of COVID-19 due to a myriad of factors. To achieve sustainable success, brands must take stock of changing consumer behaviors and adapt their plans accordingly. While retailers cannot predict the future, they must stay informed to mitigate drifting fallouts from the pandemic. Our infographic below is a great resource for merchants to stay ahead of these changing consumer behaviors to best position their brand for future success.
PFS, part of PFSweb Inc. offers retailers services in such areas as fulfillment, customer service and fraud prevention.
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June 24, 2020 at 10:59PM
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Shifting U.S. consumer behavior in the face of COVID-19 - DigitalCommerce360
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