This article was originally published on Total Retail.
Every day the COVID-19 pandemic brings a new reality, and consumers are expecting quick reactions in this fast-changing climate. To prevent the spread of the virus, retailers everywhere have closed their doors – or at least reduced hours and foot traffic – to support social distancing. With physical retail connections disappearing, online is where consumers are making most, if not all of their purchases.
This is forcing a much stronger connection between the brand and the digital experience so the reputation of the brand is now based on the online experience. All the usual online factors – shipping time, website speed, user experience, online customer support – will now have a much larger impact on brand perception as it’s the only point of contact for the time being.
As shopping moves almost exclusively online, let’s explore how online shopping behaviors have shifted as a result.
Shoppers quickly adapting to online grocery shopping
While purchases around luxury, travel, and outdoors are down, we’re seeing a dramatic increase in ecommerce for verticals related to grocery and well-being. Looking at our customers’ data, we’ve seen online grocery traffic double and bounce rates decrease 15%.
While grocery is seeing huge increases in demand, they may be scrambling to deal with scale. Every increase in ecommerce activity has implications on online security, customer service, fulfillment and how a website holds up under increased traffic. Unfortunately, the verticals that are seeing a large spike in demand are the ones that typically have lower holiday spikes, meaning they may be less prepared than other retailers who can reuse their holiday scale playbooks. This has forced some to create digital queues to deal with the increased demand.
Those teams that have a digitally mature set-up are going to be in a good spot to respond to the challenges as best as possible, while those that have been exposed as being too slow to adapt will unfortunately struggle. For many, digital choices that were made 1-2 years ago will dictate how well they can adapt to the current changes.
Shoppers still turning to their phones at home
We expected to see desktop shopping trend upwards in terms of device share because consumers are at home all day with their desktop computers, rather than on-the-go with their phones. But that’s actually not the case. We pulled up data from our own analytics system and found that mobile device share has started to rise slowly and remains the dominant channel for engagement, while desktop has stayed relatively flat. Even as we take away mobile moments from being on the go, mobile still dominates. This means mobile excellence should still be a key area of focus for retailers.
This is vertical and category specific though. It’s clear mobile is the dominant channel for apparel and accessories still, but people are still turning to their desktops to shop for groceries. This could be because of the typical demographics for each category.
Shoppers responding to promotions, but only to a certain extent
While apparel & accessories decreased with the onslaught of the pandemic, we have seen a recent increase in transactions as retailers launch promotions to offset the decline and offload extra unsold inventory.
However, the price discounting has resulted in a decrease in average order value. While consumers are willing to spend on a good deal, the promotions are not acting as loss leaders to draw them in to spend more overall.
Shoppers are transacting more through organic channels
Since the pandemic began, we’ve seen a fairly steady increase in the number of daily transactions through organic channels. It seems that shoppers are buying more often when they come in through these non-paid channels.
There are likely a couple things driving this. One could be that shoppers are actively looking for what they know they want to buy, rather than being enticed by pull advertisements. This would make sense in these uncertain times when consumers are being more conservative in their spending. Another factor could be that products in high demand are out of stock everywhere, driving people to actively search for them via new channels.
What does the future hold?
In these difficult times, organizational agility is a huge strength. All retailers, especially those seeing a downturn, are looking to become more efficient as a result of this and do more with less. How quickly can contactless delivery or curbside pickup be rolled out? How can I avoid a 3 hour phone wait time to place a pharmacy reorders? How quickly is an organization able to adapt to increased traffic, customer service and shipment spikes?
As the world is becoming pretty exclusively digital, it’s all about addressing the critical needs in the short term. A big question is, will the current shift have a lasting hold following the pandemic?
We are keen to see what retailers will take away from this and what might stick. Certainly a lot of retailers may be making adaptations that will shift their ecommerce strategy in a permanent way.
Right now it is about “quick fixes”, but the future will be about “readiness” – if this happens again, will retailers be prepared to adapt?