The COVID-19 pandemic has become one of the most crucial defining moments for the upcoming decade. It is safe to say that the implications of this global pandemic may have its effects for a long time.
As the situation is rapidly changing, retailers and business owners will have to re-think their strategy in order to survive this pandemic and understanding customer behavior is key. There has been a huge change is the behavior of consumers when it comes to shopping. From bulk-buying to online shopping, people are changing what they’re buying, when, and how. With non-essentials businesses being shut down and people avoiding public places, it is becoming a challenge for such businesses to sustain during these unprecedented times and brands are having to adapt and be flexible to meet changing needs.
- Panic Buying and Coronavirus – Humans react differently to crisis. When faced with an uncertain, risky situation over which we have no control over we tend to try whatever we can to feel like we have some control. Just when Coronavirus was declared as a global pandemic, people responded by bulk buying and stocking up on essentials and soon both physical stores and online stores started struggling to keep up with the demand. For many people, it’s their instinct to over-prepared rather than under in times of such crisis and panic buying is just a way of being over-prepared for many people, in case things get worse.
- Men VS Women – A survey conducted by Forbes, unearthed some interesting facts about the shopping behavior of men and women during the COVID-19 pandemic. The data shows that women are more likely to be concerned about the effects of COVID-1 and it also shows that men are more likely to have it impact their shopping behaviors. 36% of men reported it affecting how much they are spending on experiences (travel, restaurants, entertainment, etc.) as compared to 28% of women.
Changes in Revenue Across Different E-commerce channels
- Omni-channel – Omni-channel businesses that have both an online presence and a retail-store front shows the revenue and conversation rate going down.
- Pure-play e-commerce – Unlike omnichannel, pure-play e-commerce businesses only have an online presence and no store-front. For example Amazon and now many other direct-to-customer online shopping businesses. However, just like omnichannel pure-play is also seeing a downfall but has the potential to recover.
- Subscription services – Even though online shopping also might not seem like a good idea for many and the sales aren’t skyrocketing, surprisingly subscription services have seen significant upward trends in both revenue and conversion.
Consumer Behaviour Affecting Product Categories During Coronavirus
- Health and safety products – If you have searched for health and safety products online or in stores, you would have witnessed the empty shelves or a rise in the prices of those products. Safety products like sanitizers, disinfectants, etc are the top priority on people’s lists. Data from Nielsen shows that items like hygienic and medical mask sales are up by more than 300%.
- Shelf-stable goods – Another category of consumer packaged goods that is booming is shelf-stable items. Products like milk substitutes are also up by more than 300%. Products that have a high shelf life like packaged or frozen food is also selling like hotcakes.
- Digital streaming – Since people are stuck inside their homes and they do not have anything to do, there is an increase in digital streaming services like Netflix, Hulu, Amazon Prime, etc. Production houses are even releasing shows/movies earlier than the projected release date as the consumption is really high at the moment.
- Luxury goods – While the above products and services are increasing in sales due to the current situation, other industries are not doing as well. Since people can’t get out of their houses, it’s obvious that restaurants, travel, and entertainment businesses are taking a huge hit but Luxury goods is another industry that is facing significant losses during this time. Vogue Business projects a potential loss as great as $10 billion for this industry in 2020 due to COVID-19. With all the major fashion shows getting canceled and the luxury industry relying heavily on the Asian market, it has taken a major hit and luxury goods businesses will definitely need a strategy to rise from this global pandemic.
- Apparel Industry – As we know, omnichannel sellers are also facing major setbacks because of Coronavirus because they have to shut down their retail stores. With many cities being on a strict lockdown, it is obvious that shoppers will not be walking in stores like Macy’s or JCPenney to shop. Many DTC brands with some storefronts like Rothys and Everlane are all closing their physical stores and experiencing major losses. Some stores like Patagonia are halting even their online stores to protect all workers in their supply chain.
The outbreak of Coronavirus has definitely changed the game for many online retailers. We all are currently living in flux. Retailers are trying to support the needs of both the customers and themselves whereas consumers are trying their best to adapt this shift in the market. We are all together in this and keeping a united front is the only way forward. Rest, a retailer knows its customer the best and hopefully, this was insightful enough to understand how the consumer is reacting to this change.