Everybody needs to rethink both digital and in-store sales.
The reinvention of retail
16.5%
There was a
decline in US retail sales in April alone (the largest ever recorded in a single month)
40%
Meanwhile,
of consumers said they have switched brands or retailers
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Consumer appetite for digital and contactless ways of shopping has radically increased during the shutdowns. In response, retailers have quickly sought to change their priorities and operations.
A new report from Periscope by McKinsey examines the shift in shopper behavior and expectations before and during COVID-19. Based on a survey of 2,500 consumers in the United States, United Kingdom, France, and Germany, the report reveals where the biggest changes in consumer behavior are happening, and how retailers can respond.
By some estimates, we have vaulted ten years ahead in consumer and business digital penetration in less than three months.
The next normal
in customer experience
Planning for the recovery
46%
of US consumers have switched brands or retailers
Rather than sticking to familiar patterns and brands, consumers have embraced change amid great uncertainty. In the four countries surveyed, 40 percent of consumers said they have tried new brands or retailers. Loyalty was particularly vulnerable in the United States, where 46 percent have made a switch.
An end to ‘normal’ shopping decisions
30%
E-commerce spending was up
from the beginning of March through mid-April
E-commerce spending has surged during the shutdowns, as the appetite for digital and contactless ways of shopping has intensified.
Features such as free delivery and returns continue to be important for shoppers, while fast websites and clear product descriptions and images grew in importance. Across four countries, the increase ranged from ten to 23 percentage points since before the shutdowns began.
New e-commerce expectations
50%
At least
30%
want fitting rooms and aisles cleaned frequently
New concerns such as safety and hygiene are now top of mind.
More than 50 percent of consumers want stores to follow guidelines to help keep shoppers and employees safe, while 59 percent say it’s important for stores not to be too crowded.
A frictionless experience is now even more important. The importance of consumers being able to quickly and easily find what they're looking for jumped as much as 14 percentage points from March to June.
Safety and convenience are critical for the in-store experience
Whether it’s digital-screen browsing, easy mobile payments, or ordering online with seamless curbside or in-store pickup, there is a clear disconnect between what consumers desire and what retailers have delivered. More than 35 percent of shoppers had had yet to experience even the most talked-about or basic in-store technologies.
Limited in-store technology features available
Top two technologies consumers want more of
2. Mobile app orders
56%
pickup since shutdowns
1. Mobile payments
80%
Up
in importance post-shutdowns
How should retailers respond?
Stores
Loyalty
Set direction
Omnichannel
Loyalty
3.
1.
Go all in on omnichannel
Understand and leverage your customers’ online and in-store behavior and desires on a granular level.
2.
Stores
Reboot loyalty
Develop a high capacity for tracking what customers value and responding with new or adjusted offerings.
Reimagine stores
Adopt technologies that will empower convenient, useful, and safe experiences.
Have you made it safe to fail?
Download the report
Download the report
The global pandemic has reset the game board. This is a once-in-a-lifetime opportunity for retailers to connect with consumers in new ways by leaning in on digital, omnichannel, and in-store technology ambitions.
Dive deeper
Eric Hazan
Brings extensive knowledge of strategic marketing and digital transformations.
Brian Ruwadi
Advises large-scale performance transformations that drive growth.
Lars Fiedler
Brings innovative marketing solutions and strategies to companies across B2C sectors.
Kelly Ungerman
Drives transformation for sales and marketing organizations by finding the long-term potential.
The authors
2009
10
11
12
13
14
15
16
17
18
19
April 2020
5.6
6.4
7.2
8
8.8
9.7
10.7
11.8
13.2
14.4
16
US e-commerce penetration, %
10 years’ growth in 3 months
Source: Bank of America, U.S. Department of Commerce, ShawSpring Research, Forrester Analytics, McKinsey Retail Practice
50%
want stores to follow safety guidelines
The authors would like to thank Brian Elliott, Sajal Kohli, Kelsey Robinson, and Jamie Wilkie for their contributions to this article.
33
*Change in consumer response from March to June 2020