The COVID-19 (Coronavirus) pandemic has quickly altered the way we live and work on a daily basis. Global travel restrictions are being put in place, social distancing policies are beginning to take effect, and non-essential businesses are being forced to close their doors or go digital—these are just a few of the changes we’ve seen over the past few months. Another major shift? Consumer shopping behaviors.
You don’t have to keep up with the news to notice the sudden changes in the retail world. Consumers have quickly adjusted their shopping habits in response to the pandemic, and brands are undoubtedly taking notice—from free shipping offers to curbside pickup options and more, retailers are racing to accommodate the increasing demand for supplies while remaining in compliance with social distancing regulations.
Below, we’re breaking down everything we know about current shopping behaviors, so you can make informed decisions for your business, now and well into the future. Let’s take a look!
How Age and Gender Affects Shopping Behaviors
Although a majority of U.S. citizens have been affected by the pandemic to some capacity, not all consumers are responding in the same ways. Specifically, age appears to have an effect on current shopping habits. For example, a recent study found that 54 percent of Millennials and 49 percent of Gen Zs have adjusted their purchase decisions due to the virus. Meanwhile, only 33 percent of Baby Boomers and 42 percent of Gen Xs reported making changes to the way they shop.
Gender is another factor that’s affecting shopping habits. Surveys show that, while women are more concerned about the effects of the virus, men are more likely to adjust their purchase decisions in response. In fact, 33 percent of men reported that the pandemic has affected how much they spend on products, compared to 25 percent of women. Men are also more likely to avoid in-store shopping, opting for online retailers instead.
What’s the Deal with Bulk Buying?
In times of crises—especially those that are unexpected and unprecedented—people respond in many ways. One common behavior is bulk buying (also known as panic buying), where consumers over-prepare by purchasing unnecessarily large quantities of supplies. Bulk buying has been rampant during the COVID-19 outbreak, with a variety of supplies (TP, anyone?) going completely out of stock both online and in-store.
There are several reasons why people panic buy during crises. First, many consumers seek a sense of control during times of uncertainty. By having all of the necessary supplies (in excess), people feel that they are prepared. This provides a much-needed sense of stability amidst all of the unpredictability. Bulk-buyers are also often swayed by other consumers. Think peer pressure, but on a much larger scale. With so much conflicting advice (and so many people buying out the stores), it’s only natural that consumers will opt to over-prepare.
What Are People Buying?
The products consumers choose to purchase have also changed since the onset of the COVID-19 pandemic. Naturally, health and safety products have become necessities—so much so, that many items (such as hand sanitizer and aerosol disinfectants) are nearly impossible to find. According to a study by Nielsen, medical mask sales were up more than 300 percent at the end of February.
Non-perishable food products are also being purchased with much higher frequency—a clear indicator that many consumers are planning for long-term social distancing policies. Beans, fruit snacks, pretzels, and other shelf-stable items saw nine to 12 percent dollar growth increases from February 15th to February 22nd.
On the other end of the spectrum are the luxury goods and apparel industries, both of which have seen significant losses. This change is not unexpected, as fewer people are shopping in-person, and other product categories are beginning to take precedence in terms of essentiality. Clothing retailers with physical storefronts have also had to shift to rely on eCommerce revenue to get by. However, even online sales appear to be decreasing, with one eCommerce fulfillment service reporting a 20 percent decrease in sales for their 3,000+ merchants from January 26th to March 23rd.
Is Online Shopping Safe?
As brick-and-mortar businesses across the country begin to shut down, many consumers are turning to eCommerce retailers. However, there’s still a lot of concern surrounding online shopping and its safety during the COVID-19 pandemic. Many shoppers are worried that they will come in contact with the virus from packages they’ve received in the mail. These fears are only heightened by recent news that the Coronavirus can live on certain surfaces for up to three days. Keep in mind, however, that these findings aren’t conclusive—the numbers may change as researchers learn more about the virus.
Despite COVID-19’s ability to live on surfaces for more than a few hours, you’re unlikely to contract it by handling packages from your recent online shopping spree. According to the World Health Organization, “The risk of catching the virus that causes COVID-19 from a package that has been moved, traveled, and exposed to different conditions and temperatures is … low.” In other words, you’re free to continue your retail therapy habits as needed.
eCommerce Revenue Changes
As a whole, eCommerce has not seen as big of an increase as many would expect, but it’s not all negative. Some retailers, such as those in the grocery or home goods industries, have experienced significant revenue boosts in the past few weeks. In fact, grocery eCommerce spending was up almost 36 percent year-over-year from March 12th to March 15th.
Subscription services have also seen increases in revenue in response to social distancing policies. Recent trends reveal about a 200 percent increase in revenue since March 7th. That’s a lot of Netflix bingeing.
At CAKE, we analyzed data from one of our major eCommerce accounts and found that they experienced a 29 percent increase in revenue from March 13th to March 25th. Their transactions were down 30 percent, but average order value (AOV) was up, which contributed to the increase in revenue (and hints at bulk-buying behaviors). Plus, their return on ad spend (ROAS) remained even while spend increased by 32 percent. This is all to say, now is still a great time for eCommerce, as long as you utilize the right tools and strategies.
The Bottom Line
The COVID-19 pandemic has undeniably changed the way people shop (and what they shop for). And as consumers adapt to changing conditions across the globe, brands should, too. From offering payment solutions to shifting your paid media strategy to highlight more relevant products, there are a variety of ways to pivot your operations and increase your eCommerce revenue.
This all might seem overwhelming, but there’s a silver lining: You don’t have to go it alone. CAKE is here and ready to help you adjust your media mix and add a dash of something new. Our team can develop and execute effective digital marketing strategies that boost your business—even during these difficult times.
Get in touch with us today to schedule a strategy call with one of our marketing experts!