Changes in shopping behaviour
Grocery retail saw a massive spike in sales through March due to people stocking up on store cupboard essentials. Most consumers bought in the region of 10% more than usual on essential items due to fears of shops closing, being restricted or supplies not getting through. This purchasing trend has steadied as consumers develop a new pattern of shopping. These new patterns include fewer trips, weekday trips, and larger baskets plus a shift to larger pack sizes.
A big winner in all of this is of course e-commerce. All the major supermarkets are inundated with online orders, and more of the smaller independent retailers are offering online orders and home delivery. Increased online shopping and click and collect services is predicted to be a long lasting fundamental shift in shopping behaviour for the duration of lock down and beyond, and the development of online infrastructure should be an absolute priority for retailers who want to take advantage of that trend.
Where there have been gaps in supply, various parts of the supply chain have sought to fill these. Many wholesalers and manufacturers have switched to offering direct to consumer sales. Most of these are short-term, quick wins, capitalizing on the low or non-existent customer acquisition costs. When retailers’ product and home delivery slot availability normalises, many of these operations suddenly become inconvenient and expensive.
In addition, the trend towards grocery and takeaway aggregators such as Just Eat is accelerating, and there may be some more interesting collaborations. For example, partnering with entertainment providers to offer everything for a Friday night in; food, drink, entertainment all in one package.
These could be just short-term trends depending on how innovative suppliers can be in terms of product offering, plus the value for money they can offer and how sustainable it will be in the longer term.
With advances in virtual and augmented reality, will there be some innovation in online retailing to create meaningful shopping experiences? In a similar way to visitor experiences such as museums and art galleries offering online virtual tours.
Changes in purchasing habits
We learned from the last economic crisis in 2008 that consumers changed purchasing habits in a number of ways.
- Switching from branded goods to own brand
- Buying less premium and organic products
- Cut back on non-essentials
- Buying less individual serving packs
- Buying less prepared meals
- Buying less fresh produce and fewer healthy products
All of this was very much economically driven.
There are some differences from this in the current crisis, due to health-driven purchasing such as products to boost immune systems including functional food, and purchasing more trusted branded products rather than own brand, especially in over the counter medicines.
Consumers have been buying fresh fruit and veg. This is partly for health reasons, and indicates an inclination to prepare meals from scratch. A recent Mintel survey recently reported over half of UK adults doing more cooking at homeduring lockdown, and there has been a rise in the provision and use of online recipe sites.
This is also borne out in the rush on flour, eggs and sugar: baking has become part of the UK DNA due in part to the popularity of TV shows such as Bake Off. Time on our hands, small children to entertain, and fewer trips to the shops for convenient treats give rise to more baking activity at home.
We are also more conscious of the climate emergency and there are changing consumer habits associated with this that will not recede in the current crisis. For example, eating a more plant based diet, and seeking alternative sources of protein. The vegan, ethical, and organic movements all lost out in the 2008 economic crisis, but are likely to be more resilient in 2020. Notably though, not in terms of packaging as we revert to more disposables in response to potential infection.
Another difference compared with the previous crisis is the decline on the convenience sector. Snacking and lunchtime purchases decline as consumers are not going about their daily lives. Soft drinks sales are down, along with single serve confectionery. However, consumers are turning to convenience stores for essential items due to supply issues in large format supermarkets. This presents an opportunity for these stores. This is also evident in local independent retailers and foodservice outlets selling essentials such as fresh bread, milk, eggs, fruit and veg. Moreover, much of this is sourced locally, another trend that may accelerate as we steer away from the exotic and stick with local produce, focusing on provenance and food safety.
In terms of non-food, there was an even bigger spike in essentials such as paper products (loo roll), homecare (household cleaning detergents) and over-the-counter healthcare in March as these items are easily stockpiled and will not deteriorate. Self-care products such as vitamins and minerals, functional foods and homeopathic medicines have also seen an increase. Self-care is set to be a trend for some time to come.
Future consumer trends include ‘cocooning’. On the one hand, this describes the need for the elderly and vulnerable to shield from society to prevent infection. However, this can also mean the practice of staying at home with some luxury items and a decent box set on Netflix. Households with more disposable income will indulge in treats such as confectionery, salty snacks, alcohol, entertainment, potentially extending to more expensive equipment, such as games consoles and other electronics.
A further trend is one of living more ‘off-grid' and having less reliance on the ready availability of food and other essential items. Instead, people are trying to be more self-sufficient, growing fruit and veg and keeping livestock such as chickens. This is evident in the growth in the sales of seeds, compost and gardening equipment.
In terms of the beauty and fashion industry, the trend towards ‘clean beauty’ is accelerating. The ‘clean beauty’ movement is about natural ingredients, and awareness of ingredients in beauty products and their impact on both health and the environment. Currently, there is a focus on safety of products, and safe synthetic ingredients may be favoured over natural, which tend to have a shorter shelf life and are more at risk of contamination. ‘Touchless’ beauty products such as spray and stick formats will also be popular to avoid the need to touch your face.
Brands and businesses successfully emerging out of this pandemic will most likely be those that are prepared for the “new normal” of digital consumer engagement, e-commerce, and at-home consumption. Products and services that help us to look after ourselves, and keep us entertained whilst we are socially restricted will be the winners in the current crisis.