The COVID-19 pandemic has changed people’s shopping habits. The pandemic disrupted the daily routines of people in a lot of obvious and subtle ways. As the lockdown measures were being enforced, stores ran out of basic cleaning supplies as paranoid consumers stocked up and prepared to brace for the worst while confined inside their homes.
The lessons of the pandemic are being mulled over, and they are informing business decisions around supply chains and digital solutions that are being gauged in preparation for another pandemic or disaster.
But future resilient measures notwithstanding, there are certain COVID-induced changes that will stay beyond the current health crisis. Unlike previous supply-chain disruptors, like the SARS outbreak and Fukushima nuclear disaster, the COVID-19 pandemic has propelled changes in supply and demand all over the globe. Retail, over all, as an industry is experiencing a fundamental transformation that is poised to change the face of the business forever.
E-commerce, especially over the last decade, has brought about a seismic change in the way retail business is conducted. Consumer shopping behaviors are changing, and now with the push from the Covid pandemic, companies are aggressively pursuing digitalization across the board to cater for the e-commerce boom.
As consumers get increasingly accustomed to online shopping, brands and retailers who were waiting on the sidelines before building their own e-commerce portfolios are now jumping into the fray. The businesses that were far-sighted enough to use e-commerce capabilities well before the pandemic experienced a sharp spike in revenues from their online channels amid the pandemic.
But the shift to online isn’t the only change that has been witnessed in the retail sector. The pandemic disruptions coupled with the rise in e-commerce business also led to a recalibration of old methods of freight forwarding, delivery and fulfillment services. The changes are here to stay because the pandemic has finally affected a more permanent change in our habits.
On this note, let’s now take a detailed look at the ways in which the retail sector has permanently changed because of COVID:
The need for an Online Presence
In the past, a big part of customer shopping experience was trying out various samples at a store. Shopping for clothes meant spending time in changing rooms and seeking advice from friends on fitting and style. Shopping for cosmetics involved even more sampling, admiring, commenting, and comparing before reaching into our bags for the credit or debit card to make the purchase.
Nevertheless, as we all know, all of that has significantly changed. Now, people who were initially less inclined to try out new ways of shopping are adopting innovations with increasing confidence for their apparent ease and comfort of doing business.
As things stand now, online presence is something that no business in today’s world can even risk taking a gamble on. If you have something to sell, you’ve got to have an online presence, otherwise, there is not a million-to-one chance that your company could stand toe-to-toe with the other businesses that do have an online presence.
The way we buy is just as important as what we buy. 48% of consumers say the pandemic has permanently changed their shopping habits.
Contactless Payment Is the Future
One of the most popular changes to emerge out of the pandemic is the contactless payment option. Nearly two-thirds of the consumers who had previously rejected the possibility of trying out new payment options had to take the proverbial leap of faith in the pandemic because physical payment options carried health risks.
In addition, 93% of consumers now say that they are willing to try new payment systems that include quick response codes, biometrics and digital payments. MasterCard reports that nearly a billion more contactless payments were made during Q1 2021 in comparison with Q1 2020.
A whopping 74% of consumers said that they would stick with contactless payments even after the pandemic is over. MasterCard’s Chief Product Officer, Craig Vosburg, summarized it best when he said, “It was partly necessity that made us think differently.”
The pandemic is nowhere near ending and contactless payment options will be in place now as a viable alternative to other payment options, even after the pandemic is over.
Rapid Transition to E-commerce
Although the transition from retail to e-commerce had been in progress even prior to the onset of the Coronavirus pandemic, reports indicate that the pandemic has greatly expedited the process. According to estimates, the pandemic has hastened the shift to e-commerce by approximately five years.
Just under 14 percent of all retail sales were made online two years ago. That number is expected to reach 20 percent by 2021. That’s almost a 50% increase in the span of a few years. The impact has been immense and can be readily seen in companies’ scramble toward e-commerce.
Since the pandemic, consumers have increasingly shopped online in nearly all the retail categories. In response to the e-commerce trend, retailers have had the chance to rethink their business models.
One example of this business model rethinking can be seen through the “buy online, pick up in-store” (BOPIS) or curbside pickup models.
In addition to all this, consumer demographics have also changed, as half of the previously technology-hesitant baby boomer generation have come to embrace the shopping trends online.
Many big retailers have redesigned their stores to reflect consumers’ shifting preferences for online shopping – less in-store, more online – by turning their stores into mere fulfillment centers. You can order a product online and pick it up at Target, Walmart, Best Buy, etc. within a few hours.
‘Everything stores’ are on the rise
Big-box retailers are among those that have succeeded most during the pandemic. As consumers avoided malls and instead shopped at the big-box stores or websites, like the Walmart, Target, Best Buy, Home Depot, and Lowe’s, their sales have soared.
Walmart and Target, in particular, with seemingly endless supplies of food staples and sanitizers, also benefited from their varied mix of products.
Target CEO, Brian Cornell, praised Target for being the “one-stop-shop” option for all of consumer needs and requirements in a time when the pandemic had suffocated the consumerist spirit out of the population. People bought bikes, puzzles, hair dye, and other varied items to fill their new-found free time with constructive activities.
The pandemic lent acceleration to an already fundamental trend toward digitalization. The retail sector, above all, has changed more drastically than any other sector in ways detailed above. These are not makeshift measures, and the trends will continue to grow even further beyond the pandemic.