verde consumer behavior report - august 5, 2020

The top consumer behavior trends impacting specialty brands today.

Since the beginning of COVID-19, Verde has been following and reporting on how the pandemic has affected trends in consumer behavior. Our hope is to provide the most up-to-date information on the consumer behavior trends - resulting from COVID-19 - that are impacting how specialty brands do business and connect with their consumers today.

COVID-19 has accelerated a number of consumer behavior trends. McKinsey & Company report that the U.S. has seen a 10-year growth in e-commerce in three months thanks to COVID-19. This weeks report dives into how the surge in e-commerce affects brand loyalty, and the latest data on consumer sentiment - concern about health and the economy began to level out in July, but consumers are still expressing anxiety over the future.

First, let’s look at 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%

THE TAKEAWAY: While these numbers are pointing to uncertainty, we have been navigating uncertainty since March. This is nothing new. The best thing you can do, be empathetic. Make consumers 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.

Next up, 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. This has been a shock to brand loyalty. McKinsey & Company report 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.

THE TAKEAWAY: Why do consumers return to your store, or continue to buy from your brand? Because you are “indispensable.” They feel a sense of loyalty and your brand is a part of their personal identity. The best way to create this connection is to be human, and work to offer that human-to-human connection. 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.

Verde will be publishing consumer behavior reports bi-weekly on Verde Voice. Consider joining our newsletter bellow to be notified when the next report is published.

 
 
Covid-19, Consumer Behavior ReportBecca Katz