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Businesses seek to gauge how much pandemic has changed consumers

A sign reminding shoppers of the need for social distancing, a ubiquitous sight in retail shops during the pandemic. (AP File Photo/Mark Humphrey)

A sign reminding shoppers of the need for social distancing, a ubiquitous sight in retail shops during the pandemic. (AP File Photo/Mark Humphrey)

Making a quick trip to the store to pick up a product like wrapping paper, laundry detergent or toothpaste was a typical part of everyday life until the COVID-19 pandemic changed everything. Nonessential businesses were shut down to in-person visits for several months, and many residents did not want to risk exposure to the disease by leaving their homes.

Consumers had to alter their spending habits due to the restrictions with many turning to online shopping, contactless pay options and curbside pickup. Now 14 months into the pandemic, a growing portion of the population has received vaccinations and a majority of businesses are seeing sales rising.

“I am very optimistic about the outlook for recovery but, having said that, the pandemic has brought about profound change in consumer purchase behavior and therefore businesses need to be mindful and cognizant about those changes and be prepared to better cater to those changes, especially those that are going to stay for the long term,” said Jie Zhang, University of Maryland Robert H. Smith School of Business marketing professor and consumer behavior expert.

Cailey Locklair, president of the Maryland Retailers Association, Maryland Chain Drug Store Association, Maryland Food Industry Council and Tri State Jewelers Association, understands consumer behavior has changed but notes the question is — are these changes permanent?

“All these things people used to pop into a nameless store and buy, they are not doing that anymore,” she said. “They realized you can get it online. It is going to show up at your house tomorrow and you didn’t have to go anywhere.”

Locklair said there are some items like groceries including meats, seafood and fresh produce that folks will want to pick out themselves. But in the other areas, there are questions about whether these purchasing behaviors are temporary or permanent.

“For many businesses to survive in the future, if they don’t have a website built out where people can look online and see what they have, order it and pick it up, (it will be hard),” Locklair said. “… (Click-and-pick is) the main way brick-and-mortar can compete with online. Even with Amazon, typically you cannot get things the same day. You have to wait at least one day if you are lucky and it is on Prime.

“A way a brick-and-mortar competes is this whole click-and-pick concept. But either way, online shopping is significantly up, and paying attention to what people are buying and having that in your store is probably going to help you as well.”

Over the pandemic Locklair has also noticed consumers are trying out new brands, picking up new hobbies, including health and wellness, and spending more time watching entertainment and interacting on social media. Businesses need to be thinking about what they are selling and what consumers are interested in. “These are things you need to know,” she said.

Zhang noted that many businesses have beefed up their e-commerce capabilities, including shifting some employees to focus on online orders and fulfillment. Stores have also begun focusing more on store operations to cater to consumers’ new needs, such as concern over safety measures and working with a third party to deliver items.

Some pre-pandemic consumer behavior is making a comeback.

“There is certainly a pent-up demand for in-person shopping or in-store shopping, especially for making purchases that are fun, that have a social aspect or an entertainment aspect,” Zhang said.

Online shopping "is a non-stoppable trend,” says consumer behavior expert Jie Zhang of the University of Maryland. "You need to embrace this trend instead of just seeing it as a threat because it will become more prevalent. It will continue to take on more significance in the retail landscape."(Submitted Photo)

Online shopping “is a non-stoppable trend,” says consumer behavior expert Jie Zhang of the University of Maryland. “You need to embrace this trend instead of just seeing it as a threat because it will become more prevalent. It will continue to take on more significance in the retail landscape.”(Submitted Photo)

The pandemic saw millions lose their jobs and suffer economic hardships. However, others scaled back their spending because they had to cut down on travel, entertainment and dining out.

“Some have more savings in their pocket,” Zhang said. “They are ready to spend and there is a pent-up demand for going out to restaurants, to get together with family and friends and do fun shopping.”

Some necessary, utilitarian product purchases that shifted to online orders last year will most likely remain, according to Zhang. These product purchases don’t need to be enjoyed by the consumer and many like the convenience.

While cash payments were seeing a reduction before the pandemic, Zhang believes they will continue to decrease as more merchants invest in contactless payment options.

The only consumer behavior Locklair sees as potentially changing is how much time people are spending at home along with distancing from friends and family. With daily increases in vaccination rates, more people may feel more comfortable going back into the office, taking public transportation and returning to a sense of normalcy.

Small businesses should consider recalibrating their in-person experiences. Locklair said Main Streets across the state have made some headway in this area by creating experiences for consumers, such as having events, live music and special sales.

“The longer you can keep a consumer at or around a location, the more money people are going to spend,” she said. “… All these ways to draw people out, to get them walking around, to get them to spend hours in an area where ultimately they are going to spend their money is the future, and how stores interact with consumers and create these experiences to keep them there longer again is going to become very important.”

Zhang said the personal touch while in-store with employees will always be valued “but it is the way you deliver it and the focus on the benefits customers are looking for.” Some in-person services will continue to be important but some like technology consultations could be done virtually.

“I do think businesses need to reconsider the way they interact with consumers and think about what is the best way to deliver value through the face-to-face personal contact while (contemplating) what other services can be shifted more easily and conveniently to virtual means,” she said.

In this new era, experts believe businesses must embrace the online experience.

“This is a non-stoppable trend,” Zhang said. “… You need to embrace this trend instead of just seeing it as a threat because it will become more prevalent. It will continue to take on more significance in the retail landscape.”

Locklair said businesses do not have a choice anymore over whether to go online. “You cannot embrace it, and your business is going to be gone in a year,” she said. “We don’t have a choice anymore. The world has changed. We were moving toward more and more online. Businesses that want to survive have to embrace online. You have to embrace digital, social media. You have to have a platform. You have to have some force of e-commerce or you are not going to survive.”

 

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