There is nothing that could have prepared the world for the life-altering disruption that came to be in early 2020. Covid -19 lead to many tragedies over the past year, one of which is the economic impact it had worldwide. Many businesses shut their doors, never to open them again, while others are still having difficulty devising a plan to simply stay afloat.
The Covid-19 pandemic has changed consumer behavior for good and one of the industries most affected by this shift is the retail industry. With fewer in-store customers and a drop in overall spending, businesses have had to come up with new and innovative ideas to adjust to the new normal. The effect of Covid on retail stores has forever changed how the industry functions.
The Effects on Consumer Behavior
Fear of Covid
- With Covid restrictions being lifted across the globe, consumers reportedly are persistently nervous about in-store shopping. According to a study done in Britain by Ipsos MORI, most consumers are still uncomfortable returning to stores for in-store retail shopping.
- Since 2019 the contribution from e-commerce retail sales has grown from 14.1% to 21.3% in February 2021. What is also interesting to note is that 68% of new online shoppers report that they are likely to continue shopping online instead of in-store.
- The online evolution has changed how consumers operate when shopping. It also provides many benefits other than customer safety. Online shopping means consumers can now easily research and compare the price and quality of products.
- This does not, however, satisfy the need for instant gratification that shoppers have grown used to. Covid restrictions have prolonged the wait for goods to be delivered, which is one of the top reasons customers are still willing to visit their favorite local retail stores.
- Retail stores, such as grocery stores and pharmacies also noted a change in consumer behavior in line with the lockdown and quarantine protocols. Where many stores have had a severe drop in demand for their products, these stores have experienced uncontrollable spikes in demand to the point where they find it difficult to keep up.
- Consumers are panic buying essentials, as well as focusing on home improvement, entertainment, and DIY products to cope with the frustrations of constantly staying at home. The sudden shift in what is considered essential during the pandemic has caused supply and demand fluctuations that stores were unprepared for.
The Effects on Industry Behavior
- Considering the developments above, it can be expected that the way the industry operates has also taken a drastic turn. Retailers who have navigated these disruptions most successfully are factory-style stores – who have been able to console consumers with the safety of their large big-box type stores – and stores which either already had an online presence or have successfully created their online brand since the pandemic started.
- Smaller businesses have often found it difficult to keep up with the online transformation, as there was, in most cases, no business model for the transition to online sales. Many businesses have had to redistribute their employees to different departments where more assistance was needed to fill and deliver online or curb-side orders.
- The transition to e-commerce has also presented businesses with challenges when it comes to their digital presence. 48% of consumers reported that they follow their preferred retailer on social media sites such as Facebook, Instagram, Twitter, and even Tik Tok, and over 81% of online shoppers feel uncomfortable purchasing from brands and companies they are not familiar with.
- Trust between retailer and consumer is now more important than ever, and having an online presence seems to be the way to achieve this.
- In-store shopping now looks different. Retailers introduced many new safety measures to ensure the safety of both employees and customers by implementing mask-wearing mandates, social distancing markers, limited customers in-store, hand sanitation stations, etc.
- Many owners of smaller stores have also introduced appointment-only shopping in order to avoid lines outside stores, further assuring their customers of safety. The initiative of supporting local businesses has also been pushed by these smaller stores, in order to sustain a continuous customer base.
Innovative Solutions from Retailers
- Retailers are catering to the consumers’ new behaviors by changing what and how they sell to their customers. Clothing brands have shifted their marketing strategies to include more relaxed, at-home apparel, while other stores have changed the layout of stores to promote home improvement items, entertainment, and other products that aim to help consumers adapt to their new daily routines. Work-from-home accessories have also been placed in the foreground of many stores as a marketing strategy.
- In-store shopping has also been made safer, by implementing contactless shopping, and self-assist pay points. Another innovative solution used is to sell branded PPE which then serves as marketing for retailers.
- Perhaps most importantly, businesses have switched their focus to free online marketing resources such as Facebook, Instagram, Twitter, LinkedIn, etc. Retailers have taken advantage of these resources to ensure they build a strong online presence and promote brand awareness, all to ensure consumers feel comfortable enough to make use of their online
The Road Ahead
It is unrealistic to expect the world to return to normal any time soon. It would be more prudent for businesses to accept and adapt to this new normal. The importance of addressing the difficulties that still face the retail industry, as well as embracing the new opportunities brought about within the pandemic is greater than ever. Catering what and how you sell to the new needs of consumers is extremely important in these unsure and nervous times. Take advantage of the digital transformation by building your business’ brand and thereby gaining the trust of consumers. Increase your digital impact by getting to know your customer, and using digital marketing tools to boost your brand’s awareness and thereby solidifying your business in the post-Covid world.
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About the Author: Cally is a 26-year-old digital marketer, researcher, and blogger. She enjoys innovation, learning, and taking on new challenges. You’ll either find her with her nose in a book or being creative. You can follow her on Twitter: @debeercally
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