COVID-19 Impact on Consumer Behavioral Changes for Online Shopping
Since the start of the global pandemic Covid-19, the countries have started to enter into a complete lockdown situation, which mean limiting the public outing, public gathering and so on. Due to this very measure taken by the governments around the world we have seen a major shift in the shopping behavior of the consumers, as the shopping mall get closed and people have very limited access or even no access to shops. And due to this very fact the Ecommerce shopping is gaining growth in the sales numbers day by day. People are shifting from bulk buying behavior to online shopping, they are even changing what they’re buying, when they buy, and how they buy. The COVID-19 pandemic has accelerated the significance of online channels. Today, consumers consider online as their primary shopping channel and this will persist in the immediate future. In that digital-first environment, operational agility, flexibility and consumer engagement assume huge significance. According to Capgemini Research Institute, Consumer Behavior Survey, 59% of consumers worldwide said they had high levels of interaction with physical stores before COVID-19, but today less than a quarter i.e. only 24% see themselves in that high-interaction category. Amazon’s website hit 2.54 billion visitors for the entire month of March 2020, representing a 65% jump compared to the same period in 2019. Walmart Grocery app witnessed a record downloads representing 460% growth in average daily downloads amid COVID-19, which is 20% more than Amazon.
As news of COVID-19 spread and as it was officially declared a pandemic by the World Health Organization, people responded by stocking up the items of their needs. Consumers rushed to buy medical supplies like hand sanitizer and masks and household essentials like toilet paper and bread. Soon, both physical and online stores were struggling to keep up with demand, and price gouging for supplies became rampant. According to a survey done in survey of U.S. and U.K. consumers found that 96% of Millennial’s and Gen Zs are concerned about the pandemic and its effects on the economy. This concern is leading them to make change their behavior more dramatically than other generations, which includes cutting back on spending, stocking up on items, and spending less on experiences. During the coronavirus pandemic, online grocery shopping is picking up a lot of converts—at least for now. The change in shopping patterns has caused retailers to adapt quickly and could create long-term challenges as the giant retail sector accelerates its transition to ecommerce and Omni channel fulfillment. According to data from research and polling firm Nielsen and Rakuten Intelligence, U.S. online sales of consumer packaged goods (CPG)—the kinds of items typically sold in grocery stores—grew 56% for the one week ending April 18, compared to the same period a year earlier and for the week ending April 11, online CPG sales grew 59.1% compared to the same period a year earlier.
In-order to match the changing behavior of consumers the retailers across the world have adapted their delivery and returns propositions to ensure customer and staff safety during the COVID-19 crisis, and these changes have led to transform the consumer expectations of online delivery and returns. The contactless delivery was widely introduced in China, setting the bar high for retailers and foodservice providers globally. E-commerce giants Alibaba and JD.com’s food & grocery arms introduced contactless delivery methods, as well as foodservice providers such as Meituan employing this method for takeaways with customers being informed of both the chef and delivery driver’s temperature – a level of detail that has not yet been replicated in other countries. Contactless delivery has been introduced by retailers internationally, including in the UK and US, helping them to keep their online operations open. With online retail sales estimated to reach a great high of $6.5 trillion by 2023, the ecommerce sector was already booming. But since the outbreak, online shopping has been catapulted into complete overdrive. Even the largest retailers on the planet are struggling to keep up with the unprecedented consumer demand. Few of the items which has seen the major hike in purchasing behavior includes Disposable Gloves which has seen as 670% y-o-y increase in purchase from march 2019 to 2020. Similarly the demand for cough & cold medicines have increased to 535% y-o-y in the same period. Among the major declines includes luggage & suitcases which saw a decline of -77% y-o-y.
According to the research it was found that these six product categories have mainly been affected due to COVID-19 and consumer’s buying behavior changes:
- Health and Safety products: It was found that items such as hygienic and medical mask sales are up by more than 300%
- Consumer Packed Goods: Products like shelf-stable milk and milk substitutes are up by more than 300% in dollar growth. Other items which has seeing a major increase in demand are things like dried beans and fruit snacks that have a long shelf life
- Food & Beverages: Since the stores are closed the consumers are mainly focusing on buy online pick up in store option or home delivery. Hence the apps which provides service to home delivery are also facing workforce issue to accommodate all the orders
- Streaming: Since people are locked in their homes and have no longer any options for external entertainments, hence the streaming services like Netflix, Amazon, Hulu, and Disney+ has seen a gain in new subscribers during the first quarter of 2020
- Luxury: The potential expected loss as great as $10 billion for this industry in 2020 due to COVID-19. This is mainly because the luxury goods rely heavily on the Asian market’s purchasing power, where the pandemic has been affecting consumers since January
- Fashion & Apparel: The industry is facing a huge impact due to closure of stores and even the online apparel sales are down as people are putting more of their budgets into daily essentials
While the world is reeling from the effects of the Coronavirus pandemic, user behavior is being forced to change and shoppers are increasingly moving online. Ecommerce sites are in a position to be able to capitalize on this, but only if they are able to be found by customers in the first place. While tactics may be needed to adapt the new environment and the businesses should consider retaining investment in their analytics, online marketing and online content so that they can remain competitive and meet the needs of shoppers.