Flight to online
1. Digital shopping is here to stay
Physical distancing and stay-at-home orders have forced whole consumer segments to shop differently. A few months into COVID-19, consumer shopping online has increased significantly across many categories. Consumer intent to shop online continues to increase, especially in essentials and home-entertainment categories. More interestingly, these habits seem like they’re going to stick as US consumers report an intent to shop online even after the COVID-19 crisis. Categories where expected growth in online shoppers exceeds 35 percent include essentials such as over-the-counter (OTC) medicine, groceries, household supplies, and personal-care products. Even discretionary categories such as skin care and makeup, apparel, and jewelry and accessories show expected customer growth of more than 15 percent.
2. Millennials and high-income earners are in the lead when it comes to shopping online
While the shift to online shopping has been near universal across categories, high-income earners and millennials are leading the way in shifting spend online across both essential and nonessential items. Gen X has experienced a similar online shift, although not at the same scale as millennials. Gen Z has concentrated its shift online in particular categories: apparel and footwear, at-home entertainment, and food takeout/delivery.
As retailers contemplate the changes in consumer behavior, they will need to adjust their strategies and execution to adapt to the new norms, including:
- Adjusting mix and spend to where the consumer is now (go digital, ensure full coverage of bottom-funnel marketing and demand capture, think region-by-region)
- Revamping messaging and creative to be in sync with the times, particularly in terms of hygiene and value
- Ensuring the end-to-end journey meets the new hygiene and at-home needs
- Managing corporate social-responsibility efforts to build brand strength authentically
- Refocusing on online and pickup solutions and rebuilding real-time measurement plans, as traditional media-mix models won’t suffice
Further, it will be important for brands to reevaluate and reprioritize their target audience and consumer segments, as the emphasis on each of the next-normal trends will vary based on the target consumer.