The Digitized Future Is Here

The COVID-19 crisis has upended lives and livelihoods.

The initial lockdowns, together with an ongoing reluctance to engage fully in out-of-home activities, has also disrupted even the most common of consumer routines.

One result of this disruption is that the COVID-19 pandemic has catapulted us into a digitized future. It's one where consumers unbundled from previously ingrained habits and where new shopping formats have been adopted at scale -- and now marketers are asking: “What does the next normal look like?” For one thing, it will be distinctly digital. 

Our latest US Consumer Sentiment Research shows that even as vaccination dissemination increases and Americans slowly return to their out-of-home activities, consumers plan to continue with many digital behaviors.



For example, the use of digital health-and-wellness tools and “low touch” shopping habits such as buy-online-pickup-in-store (BOPIS) will likely continue well into the future.

Looking across retail shopping, we saw this sustained digital shift as consumers entered 2021.Categories with higher internet penetration pre-COVID-19, such as apparel, software/electronics, and cosmetics saw a dramatic increase in online penetration during April’s shelter-in-place rules -- growing from 37% penetration before COVID-19 to over 80%

While penetration went down during the second half of 2020, it has remained at a level higher than before COVID-19, reaching 48% in January 2021.

With the rise in digital, brand switching doubled

Of the three-quarters of American consumers who changed their shopping behavior since COVID-19 began, around 40% say they have changed brands.

To put this into context, the level of brand switching doubled in 2020 compared with 2019. That's a big shock to brand loyalty. These switching behaviors are more prevalent among Gen Z and Millennial consumers than with Baby Boomers (44% of Gen Z and Millennials have tried a new brand compared to 35% of Baby Boomers).

Convenience and value have been the main drivers of shopping behavior change. However, quality and brands that match with consumer values can also inspire change for about 40% of younger consumers.

Omnichannel became omnipotent

Consumers redefined convenience during the pandemic. They increasingly began to choose when, where, and how they want to shop across a growing set of online and offline options. Now that many more consumers have experienced a range of new digital shopping methods, 81% tell us they intend to continue even in a post COVID-19 world.

Consumers expect a seamless experience across channels, with interactions personalized for them in particular.

Online-to-offline offerings have experienced a huge surge over the last year, with grocery delivery up 57% year-over-year, and consumers expect to continue to use these offerings. In addition, the stakes will likely be higher both for online and in-store experiences – with expectations around ease of use and convenience.

As retailers and brands look toward store traffic returns, it will be key to communicate the benefit of going in-person to the store vs. shopping online. This could include differentiated store experiences, assortment, service, and more.

Omnichannel personalization is becoming table stakes

Successful retailers personalize consumers' online journeys -- for example, behavioral triggers and personalized product recommendations are key drivers of engagement and revenue.

When personalization is done well, it can create an uplift of 10% to 15% in revenue and retention together with increased efficiency in marketing. In the future, successful retailers could personalize the in-store experience as well -- greeting known customers when they arrive, quickly adapting to the needs or occasions for a shopper's trip, and making steps like checkout or returns as seamless as possible for loyal customers.

The pandemic has compelled businesses to reinvent themselves and reimagine the consumer experience. In doing so, it has created potential growth opportunities and key competitive advantages for brands that can successfully activate a personalized and seamless omnichannel consumer experience.

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