The customer experience as we know it has changed drastically in the past months. Since the recent outbreak of COVID-19, we've been adjusting to a new normal and have seen the world around us change. Customers are shopping differently - they are adjusting their preferences and engaging with brands from the safety of their own homes, behind the screens of their phones, laptops and tablets. According to the Coresight Research U.S. Online Grocery Survey 2020, online grocery sales in the U.S. grew 22% in 2019 and, due to high demand from COVID-19 lockdowns and stay-at-home orders, online grocery sales will likely surge about 40% in 2020. Grocers and Retailers must rethink their approach going forward in order to continue engaging with customers.
Changing Customer Preferences
Based on recent research, there is a possibility that COVID-19 could re-emerge in waves until a vaccine and proper treatments are found. Faced with this new reality, consumers are changing the way they shop entirely. Many are more germ-cautious than ever before. Contactless pickup and delivery have, and will continue to become the new normal. Consumers will likely be opposed to perks such as in-store food sampling and they will be more hesitant to use touch screens or keypads, especially as in-store shopping becomes less popular among consumers. We cannot expect customer preferences to remain the same as the world around them changes.
In fact, some research points to a permanent shift to online shopping and delivery across customer segments. While this type of shopping was previously popularized by younger shoppers, we have seen a surge of older, first-time users taking advantage of online grocery and delivery; a shift that will likely persist post-pandemic as they become accustomed to this frictionless way to shop.
COVID-19 is also pushing consumers to purchase goods from different brands and stores. Gone are the days when customers could walk into a store and purchase the exact product they wanted from the brand they usually purchase it from. With supply chain issues, hoarding of certain products, and limited staffing, it has never been so difficult for customers to find specific products on the shelves. Many of these consumers could emerge from the pandemic with entirely new brand preferences or lower overall brand loyalty. In order to get ahead of these changing preferences, Retailers should use artificial intelligence (AI) and machine learning (ML) technologies to continue to personalize member experiences based on their evolving needs and behaviors.
As unemployment rises and consumers look to reduce their overall spending, many will become more financially conservative. They may switch over to discount retailers and value-oriented brands as they choose to spend their money on need-based categories and their discretionary spending declines. Grocery stores will always be essential to consumers but should continue to optimize their internal processes and provide incentives to customers to ensure their continued loyalty.
The Digital Disruption of Commerce
Many of the behaviors and routines formed during the outbreak will continue once the pandemic eventually subsides. Shopping habits tend to change as consumers’ lifestyles change, and often they will begin to favor these new habits. For example, if consumers switched from shopping at their local supermarket to using Instacart during the outbreak, they are more likely to stick to what they are now more comfortable with post-pandemic. Until stay-at-home orders are lifted, e-commerce will be the primary channel of business for many retail categories, with some categories supplemented by ‘buy online pickup in store’ and other similar offerings. Consumers will eventually resume shopping in physical stores, but it’s likely that e-commerce will retain a substantial portion of the market share it has gained throughout this time.
Thus, the coronavirus outbreak is propelling an inevitable digital disruption of commerce. Following the outbreak, e-commerce will remain a critical part of consumer life. Retail and Grocery will look and feel very different, likely becoming more digital than ever before, but this is by no means a bad thing, especially for those who are implementing changes and improvements now. By being proactive during these times and making the most of loyalty programs, Grocers and Retailers can reestablish customer loyalty and ensure post-crisis success.
Implement a more dynamic retail loyalty program and strategy to account for our new normal. Comarch helps companies face the challenges posed by digital disruption. With over 20 years of experience running successful loyalty projects all around the world, Comarch’s loyalty experts can assist in strengthening and further developing loyalty strategies to account for the new normal. To learn more about Comarch’s Loyalty Consulting services, click here.
To learn more about adapting your loyalty program and strategy to reestablish customer loyalty during these troubling times, check out our on-demand webinar, The New Normal: Reinventing Grocery Retail Programs.