Change is inevitable in the retail industry. As new trends and technologies emerge, buying habits continue to evolve as well, and while this is a continual process, 2020 has certainly put us on the fast track to new buying habits. For example; stay-at-home orders, in particular, have caused a major disruption to commerce, and many consumers are thinking twice before making a purchase. So with that in mind, let’s take a look at how these changes in buying habits have altered 2020 commerce and what we can expect out of the future:
Consumers have cut back on spending
For the most part, consumers have cut back on unnecessary spending and expense. These expenditures were broadly related to travel and events being canceled. However, it also was due to how those closures affected employment for consumers, and that employment drop resulted in consumers taking a less risky position by reducing discretionary spending.
Going a little deeper into the unemployment situation. The unemployment rate went from being the lowest it had been in decades to doubling, reaching 15%. Those who still have their jobs are fortunate but are unsure of what the next few months will hold, so they are hesitant to spend money on items they don’t need and retailers need to be cognizant of this.
Consumers are searching for sustainable products more than ever
For consumers who are making purchases, we’re seeing where they are purchasing more sustainable items that will last them years to come, rather than a product that they will only get to use out once or a handful of times (N19 masks, gloves, and hand sanitizer excluded)
We see this particular change as a signal. As a retailer, you must be able to supply your customer with what they need. This means searching for products that are versatile. So, before purchasing a product, think about how and where that product fits within the circular economy.
Ask, can it be used throughout the year or only during one season? Can this item be reused by the consumer in a different way, thus increasing its perceived value? How is the product made? Is it made to last? Or will it fall apart after one use? These are all things to consider when purchasing or producing items for your vertical because they are the same questions that consumers are asking themselves more and more. Especially this year.
Delivery is the future
Prior to the COVID-19 pandemic, delivery and eCommerce were already on the rise. With people stuck at home and no other way to shop, we’ve seen rapid growth in eCommerce and delivery.
Keep in mind that the businesses offering delivery services are the ones who will be most successful in 2020.
With all of the government stay-at-home orders that have been put in place for the last couple of months, more and more people have discovered the advantages of online shopping.
Consumers have found that they no longer have to go out in public, spend time searching for an item, and being around hundreds of people just to find one product that they want.
Everyone now realizes they can have just about anything they want delivered to their home, and even with the stay-at-home orders lifted, and brick-and-mortar shops opening back up, we should expect eCommerce and delivery to remain a popular trend that is here to stay.
That said, while we think eCommerce businesses will come out as the real winners of 2020, of this group, it’s those who reduce the most waste from their products, packaging, and delivery processes who will quickly find themselves in a position to best out their all their competition for at least the next five years.
Becoming environmentally friendly
IBM and the National Retail Association conducted several studies to learn about buying behaviors in 2020. What this study found is that more than half of consumers are willing to change their purchasing habits to help reduce negative environmental impact. This means that retailers must offer products that are certified as organic, fresh, environmentally friendly, and parabens-free.
The consequence of any economic crisis seems to be accelerating the role of the circular economy and zero-waste movements, and as a result, it’s driving some consumers who were already Spartan towards an even more minimalist mindset.
In addition to the price and quality of a product, consumers are now focused on the availability of a product. At the beginning of the pandemic, consumers rushed to local stores to grab any necessity they thought they might need. Since then, the majority of consumers say that they have experienced several product shortages at stores when they have tried to make a purchase. This is a huge opportunity for retailers to connect with consumers they might not have been able to connect with before. Consumers might now discover new products as part of their new shopping experiences, and brands that represent alternatives to the mainstream have an opportunity worth exploring.
The future of retail
We fully expect this pandemic to make a long-lasting impact on retailers. Retailers must pay close attention to understand what priorities consumers are focused on and their relationship to that priority.
Lastly, the change we have seen in buying habits will only accelerate innovation in eCommerce among multiple industries. That said, if you are a retailer, and have yet to transition to an online experience, now is the time!
So with all the continuous, rapid changes, retailers might feel overwhelmed and unsure of the next steps. If this is you please feel free to reach out to us. Jordan Alliance Group is here to help retailers navigate through these challenging times, reduce risk and waste, and ensure their plans don’t cause unintended consequences.
Ready to finish out the year on a strong note? Schedule a free consultation today!