August is usually the time we’re dropping the clutch in our specialty businesses – we’re working to maximize the current year, working hard to have that strong finish with Black Friday, Cyber Monday and Holiday. Let’s not forget strategic planning and budgeting for the new year. Looks like we’re all about to stand in the proverbial canoe yet again as the backdrop of COVID-19 continues to blur our usual markers that we calculate risk with.
Thankfully we’ve been training for this time since March of this year. We know how to feel uncomfortable and continue to take steps forward.
It’s impossible to know what the trends in consumer behavior and retail will impart on our businesses as we head into the fourth quarter of 2020. Our saving grace is the fact that consumer demand for getting outdoors is still there – and it’s not weakening.
This week, we’re diving into a consumer behavior report by Resonate, a consumer data and analysis platform. The firm’s recent webinar, Stronger Consumer Relations, shares trends over five waves of research measuring the wake of the evolving pandemic, racial inequality and the impacts on the consumer psyche. In this wave of reporting, Resonate captures U.S. consumer sentiment in June and early-July, including: travel, transportation, retail, media and more.
During this time, concern about health and the economy began to level out and consumers were settling into their new normal, but are still expressing concern and anxiety over the future. Surveyed consumers:
- Are still worried about the health impacts of COVID-19 – 58%
- Are still not comfortable attending large gatherings, like church – 63%
- Believe leisure travel will not return to normal until 2021 – 65%
- Are still increasing their consumption of streaming TV – 62%
- Are increasingly going to be buying products online this summer – 54%
- Are concerned about the economy to a large extent – 69%
- And believe it will take seven-plus months to return to normal – 74%
SIA Take: While this is all pointing to uncertainty, none of this is new. What’s changing is the backdrop of our business calendar. Keep it simple: Consumers need to feel safe, comfortable and connected. At the end of the day, they are humans, and the brands and retailers that can connect with them on that level are going to win over their trust and dollars.
Retail TouchPoints released its 2020 Consumer Loyalty Benchmark Report this week. The report, based on responses from 109 retail executives surveyed in June and July, dives into how COVID-19 has impacted customer loyalty – which they represent as a BIG challenge for retailers moving forward.
“Earning — and keeping — customers’ loyalty represents a big challenge even at the best of times, and these are certainly not the best of times.” – Adam Blair, the reports editor
The surge in e-commerce resulting from stay-at-home orders has proven to be the biggest impact, as well as the closure of many brick-and-mortar stores. According to a recent report by McKinsey & Company, the U.S. has seen a 10-year growth in e-commerce in three months thanks to COVID-19. This has been a shock to brand loyalty. McKinsey reports that 75% of U.S. consumers have tried different stores, websites or brands during COVID; and 60% expect to integrate the new brands and stores into their post-COVID lives.
The Consumer Loyalty Benchmark Report shows that 68% of retailers gained new online customers due to the pandemic, with 46% saying their e-commerce customers were making more frequent/larger purchases. Consumers are not only increasingly purchasing goods and services online, but they are “trying on” new brands and websites. Additional insight from the Benchmark Report includes:
- 83% of surveyed retailers use social media to acquire customers, 65% use email and 59% use paid online search.
- Marketers have noted consumers’ move to mobile — another trend given extra fuel by COVID-19.
- Contactless shopping experiences have increased, coinciding with a 20% year-over-year increase in the time consumers spend in mobile apps.
- Retailers have turned to proven resources to battle customer defection: discounts and free services. Just over half (52%) of retailers now offer free shipping, up from 44% in 2019 — a mark of how vital the delivery experience has become.
- This year’s survey indicates that retailers operating loyalty programs are becoming more adept at garnering additional revenue from their members.
SIA Take: Retailers and brands will benefit from having customer acquisition and retention tools in place, but most important? Being human and working to offer that human-to-human connection. That’s what invites people into your community and enables them to emotionally connect with you. Why do consumers return to your store or continue to buy from your brand? Because they feel a sense of connection, loyalty. Go out of your way to communicate with your community, connect with them and reassure them that your business is here to serve. In addition, consider how you can encourage online shoppers to visit your physical location, and think about membership and subscription programs. This allows you to connect with, learn from and serve your consumers at an entirely new level.
More to come soon. Please let us know if there’s something specific you’d like for us to include in a future Consumer Behavior Pulse – email [email protected] to send your request. Thanks!