The Path to Purchase Institute has assembled its most impressive collection of thought leaders ever to reflect on the impact the COVID-19 crisis will have on shopper engagement. The following series of articles presents their insightful perspectives on four questions about the current status and future potential for the shopper commerce industry.
- What is the most beneficial lesson you’ve learned about shoppers during the crisis? (See answers below.)
- What new business practice, strategy, process or marketing tool/tactic have you adopted that you will continue to use post-pandemic?
- What recent change in shopper behavior or retail operations do you most hope will continue after the crisis ends?
- Moving forward, what do you see as the greatest opportunity for achieving success with shoppers?
What is the most beneficial lesson you’ve learned about shoppers during the crisis?
During this pandemic, the lessons learned are reinforcing that consumers love convenience, desire selection and simply want a fair price. With physical retail stores closed or with limited hours, consumers still have needs and wants in exchange for a fair price. Therefore, we learn that the retailers that have a reliable and consistent delivery experience that includes last mile to the home will win. This convenience must be balanced with a fair price and a reasonable level of selection to keep customers coming back to buy more. The most beneficial lesson is that in times of crisis — and hopefully after the pandemic is done — neighbors will be more understanding and caring about each other, and by leveraging this within a community the overall economic ecosystem will flourish. People make up businesses, not items.
That necessity is the mother of shopper ingenuity, and a lot of resourceful shoppers have already switched or substituted outlets, categories and items as a result of new needs and constraints. Crises are disruptive to established consumption patterns, and the second-order effects of lockdowns, sustained stock-outs and other system shocks won’t become obvious until more time has passed.
That’s why it’s so critical to broaden your aperture to include indirect competitors in your competitive analysis and prioritize analyzing more granular data in shorter cycles — that is, don’t wait for a month-beginning sales review to look at where momentum is shifting.
During the crisis, we’ve really made it a priority to begin with the “most generous interpretation” — a cultural behavior that grants that another party (for example, a colleague, client, prospect, or partner) is doing the best they can, given the circumstances.
In challenging and extraordinary situations, it’s a good way to treat others with consideration and respect.
It also helps condition one to make fewer assumptions, ask better questions, and minimize adversarial thinking. (Worthy objectives in less “interesting” times, too.)
That shoppers quickly adapt and reward the brands that have found ways to be agile. The “We’re here for you” messages rang hollow and insincere with shoppers. What did resonate were brands that found new ways to help shoppers get what they needed and get it to their homes.
The most beneficial lesson is that shoppers can adapt quickly. We knew that online shopping for groceries in particular would continue to rise. COVID forced the rise in grocery delivery and pickup. I believe that shoppers will continue grocery delivery and pickup in a post COVID world because it is convenient for busy lifestyles.
Shoppers should continue to be discerning with brands, products and retailers. Shoppers should continue to expect more from products and retailers. Those that deliver on shoppers' expectations will continue to grow.
Shoppers are looking for differentiation in products and brands. Products that can deliver on specific consumer needs with a story and functional benefits will rise to the top. Premium and value products are winning. If you do not have a product that drives a price premium with shoppers, then consumers will be seeking a value proposition with your product or service. Shoppers are also looking for authenticity and an emotional connection to brands and products. Those that deliver will win with shoppers. I also believe with the increase in unemployment that providing affordable food options is key for a large portion of the consumer base.
During the coronavirus pandemic shoppers have proven that, despite their mental biases, they are resilient and willing to adapt. When faced with great uncertainty and change, shoppers have tried out new ways to buy products, new retailers to buy from, and new products to buy. All this despite concerns about locating needed items such as personal care and cleaning products. Trialing new behaviors and brands will have long-range implications for the industry.
Shoppers are chameleons and open to change. If shoppers can’t (or don’t feel comfortable) going to stores … they will shop online. Or pick up curbside. Or have it delivered. They are open to wearing masks, contactless payment, plastic partitions, traffic flow arrows, compressed store hours, limited circulars and digital, digital, digital. And, they are doing all this with little to no complaints. It is what it is, just keep on shopping.
The mindset of shoppers during the pandemic has been both comfort-seeking and irrational. Who could have predicted such a run on toilet paper and yeast? Meanwhile, new buyers started engaging in previously declining center store categories again. My guess is that this will hold true for the next 12-18 months.
There is this obvious accelerated push from shoppers toward digital paths to purchase. According to the U.S. Department of Labor, it took 10 years for e-commerce in the U.S. to reach 16% — and then, in a matter of just 10 weeks, it jumped to more than 25%. We believe some of this shift will be permanent, so we’re focusing efforts and investments on pushing deeper into the digital sector in many of our categories.
I think the more exciting trends we see are new, unmet needs — some temporary, some permanent — from consumers, given the changes in their lifestyle.
Chief of Staff & Omnichannel Deployment Lead
Peapod Digital Labs
Many customers are extremely loyal, but in a crisis customers will go to where they can find product and delivery/pickup availability. If a retailer does not have capacity to fulfill delivery and pickup orders, it puts them at risk of losing customers in the short term and possibly long term. The ability to flex capacity will be key for retailers moving forward.
I think we have had beneficial reminders, not lessons as yet. I believe it’s quite difficult to take lessons from a populous in a heightened state of panic. So, my top reminders would be:
- We have had a new light shone upon our humanity (or lack thereof), and the notion of “consumerism” will shift as a consequence. We must never forget that it is a privilege to be allowed in consumers' homes and minds. It is our obligation to remind brands and retailers of that privilege and how they can use it, and amplify it to meet consumer needs while uniting for a shared purpose rather than exploiting fear and uncertainty.
- We have further reinforcement that we humans are not rational shoppers (case in point: toilet paper). It’s been a reminder that we need to understand human needs ahead of consumption needs, and that retailers and brands need their inventory and supply chain systems that see and understand the difference. This may have alleviated some out-of-stock issues and distribution challenges when the pandemic took hold.
- We are social creatures; we consider shopping to be a pleasurable activity. Our memories are fleeting, so we will see a yearning to return to the shops and the pleasure of the shopping experience.
Shoppers are far more adaptable than they tend to get credit for. The consumer goods retail industry had to look at what was happening as a result of COVID-19 and acknowledge that even the best-laid plans for 2020 weren’t going to work anymore. Whereas shoppers did what they always do — adapt.
When it became clear that there was safety risk associated with shopping in physical grocery stores, shoppers that had never ventured from the traditional in-store purchasing route quickly pivoted to adopt online grocery shopping, third-party delivery apps and curbside pickup services.
When various safer-at-home orders went into effect, limiting shoppers’ movements and reducing the availability of restaurants and take-out options, shoppers figured out how to make more of their meals at home. They adjusted their purchasing habits, frequencies and products to adapt. Many were cooking meals at home for the first time.
When supply chain disruptions and hoarding behavior resulted in stock-outs of shoppers’ staple products, they found replacements. They tried new brands and substituted new products.
Rather than grasping to restore or maintain some sense of their pre-pandemic reality, shoppers accessed new tools, learned new skills, tried new products and moved forward. Experts predict many will keep remnants of this period for the foreseeable future — some of the demand that has shifted online will stay there, shoppers who took to cooking may retain the passion and permanently reduce their frequency of eating out, shoppers who tried new products to replace ones that were out of stock may not return to their old favorites. Shoppers have forged ahead, adapting and adopting as they go at a level far beyond what many expected of them.
That we need to better prepare our strategies, operational plans and capabilities in dealing with unpredictable or unforeseen events, typically coming with extreme consequences. Nassim Nicholas Taleb calls these “Black Swans” in his book by that very title, and though the current crisis wasn’t seen as necessarily consequential to the world last year, it certainly has revealed itself as such since.
Where shoppers are concerned, while they/we may historically exhibit reasonably predictable and rational decision-making patterns within in our everyday lives, it’s become quite clear that given a particularly disruptive crisis — such as we are now dealing with — survival instincts will kick in, with causal impact challenging under normal conditions, quite difficult to resolve in the immediate moment. This is why we’re short on toilet paper.
The crisis has directly impacted how people shop and what they buy. While some retailers have struggled as a result, retailers like grocery stores, drugstores, mass merchants and warehouse clubs have remained open and have seen an acceleration in sales of essential goods. To protect the customers they serve and their employees who are on the front lines, these retailers have provided new ways for their customers to shop that promote social distancing, and as such are accelerating online delivery and contactless curbside pickup at an incredible pace. One of the biggest lessons we have learned is that consumers are resilient - they were able to rapidly adapt to these significant changes to ensure they could continue to get the products they needed. Consumers are trying many of these relatively newer contactless services for the first time and quickly becoming repeat users, which is driving unprecedented growth of digital sales of CPG products. In total according to Nielsen, people in the U.S. are buying CPG at 15 times the normal rate online as a result of COVID-19.
COVID has had a significant impact on acceleration of digital adoption by as much as 3-5 years. This has implications on many fronts: supply chain, price pack architecture, marketing along the consumer experience journey and more.
Chief Commerce Strategy Officer
Shoppers are tenacious and resilient in fulfilling their demand. In the early days of the shelter in place, shoppers jumped through a huge number of hoops and endured some very poor shopping experiences to fill their pantries. Shoppers hate friction, but they will put up with a lot of it — if it's in service of a goal.
Shoppers are way more creative than people even imagined. According to Numerator, “89% of consumers said their shopping behavior had been impacted by coronavirus.” Not only are we seeing huge surges in online grocery shopping across all demographics but we are also seeing shoppers getting creative when faced with out of stocks. Can’t find bread at the store, bake some. Can’t go to the pool this summer, turn your backyard into a resort. It has been amazing to see how creative and resourceful shoppers have gotten in the face of shopping adversity.
We’ve learned that shoppers are more open to new solutions, new channels and new ways to shop than any of us imagined. It just took the little push of … er … a pandemic! Adoption and acceleration of technologies and methods of delivery, curbside pickup, subscriptions and DTC brands has gone through a five-year adoption curve in five weeks.
Shoppers can be highly susceptible to panic buying and at the same time be exceptionally adaptive in their behavior. We saw shelves of toilet paper, paper towels, tissues, disinfecting wipes, meats and other home staples wiped clean from store shelves. For some categories the high levels of demand made sense but for others, the drivers of demand were not quite as apparent. In many cases, panic buying was triggered by shoppers lack of control of their situation and fueled by what they saw on social media and in media reports. At the same time, their behavior was extremely adaptive with large numbers of shoppers utilizing e-commerce solutions for the first time or increasing their usage of this channel to fulfill their needs. We’ve experienced these lessons as marketers and retailer and these experiences will allow us to more quickly adapt our go to market strategies in the future.
Their resilience and adaptability. In our “How America Shops in the Covid-19 Crisis” research series, in April 52% of the national population said they were “proud of how they were managing in the crisis”. What they bought, where they bought and how they shopped were all part of managing. The dramatic increases in buying groceries, and health and beauty products online for the first time reflected that. They refocused — pivoted — on everything from meal planning to home schooling, to working from home to preventative wellness and social activity, and they did it fast. They became what we call “digital pandemic natives,” and they did that fast.
Shoppers develop strategies quickly for when they need to shift their behavior to get the products and brands that they are looking for. During the COVID stay-at-home order, shoppers very quickly identified the retailers and channels where they had the best combination of being able to get the products they wanted, and stores that seemed safe from a cleanliness perspective. Within this consideration set, shoppers tried new fulfillment options to ensure that they get their families safe, but also got what they needed.
Shopper behaviors have unquestionably changed. What is remarkable is the speed with which shoppers will adapt, shift and move forward. If anything, COVID times have proven that the shopper IS IN CHARGE.
Shoppers are still pursuing value opportunities, even when faced with a focus on immediate stock-up and access. Fundamentally, the shopping behaviors we are observing today aren't really disrupting as much as they are accelerating the pace of many previously emerging trends.
Director of Omnichannel Marketing
It’s rational to seek certainty and comfort in uncertain times. Strong brands will deepen existing relationships and perhaps reconnect with lapsed consumers.
Shoppers need a shepherd, or they can become the wolves.
When we as shoppers (myself included) are presented with a crisis — from more minor snowstorms and power outages to the unprecedented COVID-19 lockdown — our basic needs like food, household essentials, health and safety are put at risk and we are forced to restart our journey through Maslow’s hierarchy of needs from the bottom. Left to our own devices, some of us often panic and as a result, stockpile to provide for ourselves and our families, leaving little to no supply left for others. My family certainly has more toilet paper in our house than we ever needed.
The challenge is that our consumer goods supply chain wasn’t designed for unplanned demand and crises, and this somewhat natural shopper reaction can have significant and long-term negative impact on retailers and brands alike. No retailer or brand wants to be out of stock for multiple reasons, but in-store, an out-of-stock brand doesn’t lose their place on shelf overnight and must “simply” get back in stock to resume their day-to-day business. In an ever-e-commerce marketplace, being out-of-stock can immediately cost you your current and long-term search rank and sales velocity and cost a brand disproportionate investment to recover shopper consideration and loyalty.
While retailers can’t foresee crises, once such a crisis becomes apparent, the per-shopper limits on product purchases in-store and online may seem “undemocratic,” but are important controls to put in place to “save us from ourselves” as human shoppers, as well help the retailers and brands successfully manage through the crisis.
VP, Brand Commercialization and Shopper Services
Match Marketing Group
It takes a pandemic to change behavior. Yes, that is a hyperbolic statement, but the essence of the lesson is very valuable especially from an agency to client perspective. We work so often with clients trying to launch new products, drive incremental volume with new communications, switch consumers from one habit to another. And while it is often said, “changing behavior is hard to do,” it is hard to articulate that exactly until now. The case in point is digital shopping behavior. Certainly it had been growing over time and adoption was what I would call a slow maturation cycle, but when the pandemic hit shoppers had to adapt to a new and different way. Certainly in-store shopping was available still, but due to conditions present acceleration of selection of click-and-collect and more digital shopping was preferred It took a pandemic-sized event to accelerate a shift in shopper behavior. So why is this a beneficial lesson? For clients and brands, it is a glimpse of the force, pressure and focus you need to put toward new products, communication or strategies to effect a hockey stick like growth trajectory. Obviously, no brand could exert such a force into the market as a pandemic, but it does provide a valuable lesson about how routine oriented shoppers are and brands need to deliver a “pandemic like” approaches to really disrupt and breakthrough. In the future when clients pose the question on whether or not it will work, I might just say, “Is this approach pandemic enough?”
The ability to adapt and adjust and how disruption accelerated underlying trends.
The most beneficial lesson is that CPG shopper behavior CAN change quickly. For the past few years, CPG’s have been slowly watching their categories move online, but it has been at a slower pace than other products, like electronics or apparel. It seemed as though CPG shopper behavior may have been slower to change, but the pandemic showed that CPG shoppers can pivot just as fast, if not faster, than shoppers of other categories. This should give both retailer and manufacturers and ever greater runway — and sense of urgency — to continue building their digital commerce capabilities.
Shoppers are resilient. They find solutions and substitutes … a key lesson for everyone. They will find another store or channel if you are out stock, a competitor that is available, or a different solution (baking at home vs. baked goods in the store). We all must remember that … it should keep leading brands on their toes and gives challenger brands hope.
Going into the pandemic we knew that consumers, shoppers and the marketplace were adaptable and dynamic, but never thought this adaptable and dynamic. The rate at which behaviors changed was like nothing we’ve seen before. For instance, shopper response to holidays and traditions was remarkably creative, with new ways of celebrating events like Mother’s Day emerging in an instant. Through it all, the need for personalization amplified (think of the even greater importance now for a consumer or shopper to feel like you get them as an individual), and along with that, the critical need for products and brands to stay appropriately authentic.
Marketing Director, Shopper Marketing
Their shopping habits are not written in stone. They never were before and they have proven that it won’t be. We need to stay on our toes and anticipate how we can better drive purchase with their changing needs and wants.
VP Customer Service & Customer Supply Chain, North America
The power of the shopper’s penchant for “essential” goods. That’s where dollars will be focused.
I think the pandemic accelerated the shift to omnichannel shopping. We saw retail foot traffic grind to a halt in some key classes of trade, and 33% falloff in others. Consumers shifted a significant amount of trips to online and all of us (retailers/CPGs) were not quite ready for it.
The pandemic forced e-commerce trial rates, and while retailers may not have been fully prepared, shoppers are now used to the idea. I think the “new normal” will be much more of a blend between bricks and mortar shopping and various forms of e-commerce, whether it be curbside pickup, home delivery, etc. As with much, regarding today’s consumer/shopper, “personalization” is key but the experience/product does not need to be “personalized” so much as provide consumers enough choices for them to “personalize” or select their own experience.
We haven’t yet figured out e-commerce for our category, but the “preview” of the future that was brought about by the pandemic opened our eyes to the importance of a multichannel business model solution moving forward.
How flexible we are when pushed. From a behavioral science point of view, this gives me even more faith in the ability to change people’s behavior. Although our habits and routines are hard to break, they can be changed. We feel we can help clients to guide shoppers towards products and services that are better for them, good for the client’s business and positive for our world through sustainability, less packaging, etc.
The esoteric answer is that they are adaptable and extremely responsive to environmental stimuli. It means that we cannot take their behavior or purchasing patterns for granted; we need to move and pivot rapidly with them. Failure to do so could mean that you lose relevance or, worst, be seen as out of touch or tone deaf to what is happening around them. This is the leading indicator; the lagging indicator will be lost sales well beyond any extent of this crisis. The other side of the coin is that there is (new) opportunity for brands and companies who see crisis as an opportunity and can respond quickly to changing shopper behavior. The disruption in many facets of society, including shopper behavior and product choice, is significant and there are now opportunities to attract shoppers who in the past may have been loyal to another offer — or who may not have purchased at all.
The "psychological" barrier of buying online is now gone completely. The additional safety of home delivery or pick/pack models are now being adopted broadly. Every company is now a direct-to-consumer company. Some like Nike have declared it; others still have their head in the sand.