The cataclysmic impact of the COVID-19 pandemic has caused dramatic shifts in the retail world and thus consumer behaviour. These seismic changes in shopper spending have caused market place realignment within each sector of retail and the wider economy. They can be categorised largely as those indicative of the pressures prescribed to individuals in lockdown i.e. an increase of alcohol consumption and groceries. Although others can be prescribed as symptomatic of the significant alterations to retail channels, i.e. an increase in purchasing via Amazon, though the two do bleed into one another.
The pressures of lockdown have altered shopper behaviour and in many ways these are as one would expect. As the populous is confined to their houses, the demand for essentials has skyrocketed - last week seeing another day where this category was nearing +300% on revenue. As one of the few bricks-and-mortar retail marketplaces still available, supermarkets have thrived, both physically and online. This is unsurprising when you factor in the government guidelines to only leave the house for physical exercise once a day, or for essentials, which means people are using walking to the supermarket as a form of escapism in addition to a need for sustenance. This is illustrated by the 50-55% across all generations in the US and UK who want to limit the amount of times they go to the supermarket.
Other essentials have arisen amid this crisis, owing to the struggle to balance working from home and giving our children some form of structured education during the week. This has unsurprisingly led to record users on e-learning sites. Seneca seeing 50,000 new users a day and Atom becoming the largest digital quasi-junior school in the UK. To see which other sectors are succeeding, you needn’t look further than your own weekend plans.
For those with children, staying in means family engagement activities and ways to keep little ones occupied. This has been emulated by the explosion in the games and puzzles industry who saw a 228% increase in the US in recent weeks. The toy sector in the UK has grown by 26%, seeing a particular surge in toys that keep children occupied for at least 45 minutes. Whilst now having the luxury to enjoy more quality time together, activities that can be enjoyed as a family have seen a significant boom. The arts and crafts sector has grown by 70% and digital gaming for the whole family is seeing an unapparelled spike in growth. Discord, a free voice app gamers can use to talk to each other whilst playing, saw their sign-ups rise by 200% in one week and Jackbox has experienced similar levels of success. The gaming industry as a whole saw a 26% increase in China and has demonstrated innovative ways to adapt to their players new habits. A great example being Niantic, who make Pokémon Go and Harry Potter: Wizards Unite, who announced plans to change the rules to make it easier for players to collect points inside the home.
For those of us without children, our enforced confinement with family, friends or a solitary stint alone, has driven us to the extremities of our personal well-being, leading to changes in the health and wellbeing industry among others. Nowhere has this been more apparent than in the US, where unhealthy habits are taking hold. The alcohol industry saw sales increase by 55% in the week ending 21st March, with online alcohol purchases increasing a whopping 243%. Legal marijuana sales saw a 20-25% increase and the big one – overeating. Particularly on the carby, non-perishables like pasta and canned foods that many stocked up on over the last month - meaning sizeable profits for snack companies.
In addition to the poor diet, we are all exercising less, despite a rise in the use of gym apps and increased consumption of Youtube exercise videos. Data from 68,000 fitness trackers showed that Americans are moving less and sleeping more whilst in quarantine, despite the increase in online classes, and fitness apps, which is in part caused by the inability to maintain a gym-like routine whilst juggling child care and working from home.
However, the shopper is not one homogenous mass, so we do also see a huge swath trying to stay healthy, which means that other trends have taken shape, including the rise of the non-alcoholic, or “nolo” drink. This has been a steadily emerging trend in the UK for some time, increasing 30% from 2016 and doubling in size in just four years within the UK market. However in March this year it toppled craft beer as the UK’s top drink of choice, with the help of generation Z. Gen Z and Millenials are also continuing to carry the torch for the healthy lifestyle trends, with 50% of Gen Z-ers and Millenials saying they are eating healthy foods amid the outbreak.
A thread running through many of these changes in sector is the shoppers desire for convenience. In fact convenience is proving to triumph over health or financial benefits when it comes to deliveries. This can be seen in the universal shift online, made by every generation (albeit at different speeds). This has meant titanic increases in traffic for the web, app and social marketplaces. No marketplace however, displays this prioritisation of convenience over health, more than Amazon. The company is due to make an additional $100million this year from increased subscriptions to its Amazon Prime service, due to such rapidly increased demand for its next day delivery service. Though the prime services no longer promises next day delivery, they are still managing to deliver swifter than most. They have hired an additional 100,000 full and part-time employees to meet demand and Google keyword research reveals huge increases in Amazon searches.
So what does the future after Covid look like? For Amazon at least the future looks bright. Amazon’s e-commerce competitors: Walmart.com, Google Shopping and eBay pale in comparison to its holding, particularly on consumer trust. It’s true competition would be the indoor marketplace, which is likely to be financially shaky and frail over the next twelve months, even with an anticipated influx of a certain demographic of shoppers post crisis.
This period has forced many to try new things, be that digital socialising through multi-function platforms like Zoom or apps like House Party (despite the press surrounding their security), or purchasing something using social media, which 18% of people tried for the first time during this period, most notably within the baby boomer age group. Therefore we can expect to see more people than ever purchasing through web/app and social marketplaces, including Amazon, making retailers offering in these areas more vital than ever.
Some industries that have enjoyed success, most notably online entertainment which has risen by 12%, will undoubtedly see a decline when other pressures on the income like commuting and the option of indulgences like eating out, take their place. The luxury industry is also likely to see a decline, as the few currently experiencing success are filling the hole in people’s disposable income normally filled by visits to coffee shops, dinners out and the physical entertainment sector.
However, there is huge potential for the industries that have been particularly effected by the lockdown to bounce back and then some. If we look at a report by Kantar which details what people are most looking forward to doing when lockdown ends, 65% of people said going out for a meal, 58% said out-of-home shopping, and over 50% said out-of-home entertainment and exercise/sport. Other categories mentioned were travel, hairdressers/manicures, massage/sauna, group exercise classes and medical beauty. Proving that should businesses make prudent decisions during this period, a boost in business could be awaiting them on the other side – particularly in the hospitality, fitness and entertainment industries.
How about the trends we’ve seen in campaigns like the McDonalds logo separation? What will happen to the philanthropy, sensitivity to consumer needs and the increased community outreach? Many brands have accelerated good initiatives, hotels opening their doors to the homeless; giving proceeds to charities and food bands; sustainability pledges etc. but some may be hoping to reduce if not stop these initiatives once we’re out of the other side. Experts suggest, however, that consumers will be expecting such actions to continue after the coronavirus, with 54% of shoppers expecting retailers to provide specialised hours for vulnerable people to shop and provide added assistance. These initiatives have increased our trust and any brand who flip flops back to the bygone days of insensitivity will be in for a rude awakening.
The digital trend will also prevail. Many did not use certain methods of e-commerce previously because they felt uncomfortable doing so, however as the average consumer upped their time spent on their mobile to 7.3 hours on mobile, many have taken the plunge – nearly 40% trying online grocery shopping for the first time in March according to SmartCommerce. The ease and convenience many will have experienced will be expected still, so brands should focus on strengthening their e-commerce channels across web, app, social and Amazon and look to ease consumer access and strengthen their digital offering.
Self-reliance and frugality (in many cases as a concept as opposed to a fiscal undertaking) will likely see a boom, as people realise their saving potential and react to the mad panic buying period orchestrated by corona. Millenials and Gen Z-ers are 8 and 17% respectively, more likely to want to vacation in their own country than abroad, post outbreak.
Globally we will arise a drastically altered society, but a kinder, more conscious and closer knit one too. Any brand worth its salt should be looking to retain, but more importantly embrace this new found humanity, which will obtain or maintain shopper trust. This pandemic has touched all the corners of the globe, and as we embrace the digital era across emerging and enlarging market places, it is easier than ever for retailers and brands to connect to those on the other side of the world. Focusing on harnessing the potential of Amazon, social media and strengthening e-commerce channels through web and app, will become a fundamental step in remaining relevant and profitable in the months to come. An in-store strategy will also be vital for those with physical stores, with increased emphasis on experience, convenience and an in-depth awareness of shopper expectation. Of the shopper as an individual, not a collective.
 Global Web Index
 Kantar, BrandZ Webinar 20th March
 Kantar, BrandZ Webinar 20th March
Global Web Index