The pandemic has changed shopping forever, a global PwC study reveals. So what do businesses need to know about the new consumer trends?
Covid-19 will leave a lasting impact on the retail experience with consumers being more conscientious about who they buy from and why.
In particular, shoppers will weigh up the environmental, social and governance (ESG) implications of their purchases.
“Businesses need to be aware of socially conscious consumerism that will continue to grow as people seek brands that they trust and that align with their values”
According to the PwC study, in the wake of the pandemic consumers across the globe are more likely to pay a premium for more sustainable choices.
A premium on sustainability
More than half of global consumers interact with the top four digital platforms – YouTube, Google, Facebook and Instagram – and more than one-third of those respondents actively click on advertising.
Consumers who now work primarily from home, compared to those who generally work away from home, will spend more online in the next six months.
Younger consumers are more likely to shop online than older consumers and will spend more in the coming months.
In-store shopping remains top choice for consumers shopping daily or weekly, where restrictions allow, even though mobile shopping continues to accelerate.
More people have been shopping online exclusively compared to shopping in-store across most product categories and want fast and reliable delivery.
While the global study of 22 countries did not include Ireland, John Dillon, partner at PwC Ireland’s Retail & Consumer practice said these trends are evident in Ireland.
“Consumers around the world have become far more sophisticated when it comes to sustainable choices,” Dillon said.
“The research shows that no matter where our consumer and retail clients do business, they are and will be serving customers who want to know how they are doing their part to protect our environment and consider how their actions affect our climate. ESG is not a passing fad. Knowing what your consumers now value and changing how you now do business will define your own long term sustainability and growth.”
35pc of Generation Z and 43pc of Millennial shoppers are more likely to shop daily or weekly using their mobile phone than older counterparts. According to PwC’s analysis, Covid-19 has not impacted younger consumers’ spending habits. They are expected to spend more in the coming months than older consumers.
For example, 36pc of Generation Z and 33pc of millennials expect to spend more on fashion over the next 6 months compared to just 4pc for older generations. The survey also reveals that millennials, in particular, are more promiscuous shoppers, meaning they’re not as brand-loyal as their older counterparts. They tend to make less frequent, bigger-basket shopping trips.
Consumers who prioritise health and safety are shopping less frequently in-store than consumers who are not as safety-conscious. 23pc of survey respondents rank “increased health and safety measures” as their top two attributes when shopping in-store. These individuals are shopping in-store less across all product categories.
For example, 37pc of this ‘conscientious’ group say that, where allowed, they are now shopping less for fashion items in physical stores compared to 29pc for all shoppers. 23pc of them say they are shopping less for groceries in physical stores compared to 18pc for all shoppers.
When shopping for groceries, these consumers are also more willing to pay a premium for more environmentally friendly options and this is unlikely to change, even after the safety concerns brought on by COVID-19 subside. For example, 50pc of the conscientious shopper is more willing to pay a premium for eco-friendly/sustainable packaging compared to 46pc for all shoppers; 53pc will pay a premium for locally produced items compared to 50pc for all shoppers.
Pace of change
Owen McFeely, director of PwC Ireland’s Retail & Consumer practice
“The consumer markets industry was experiencing large-scale disruption well before the Covid-19 pandemic, but the virus accelerated the pace of change in consumer behaviour,” said Owen McFeely, director of PwC Ireland’s Retail & Consumer practice.
“As companies move forward, they should take advantage of opportunities the new trends bring. If those consumers primarily working at home do increase their spending, this creates an opportunity for retailers and brands to proactively engage with these consumers in order to win additional share of wallet.
“Both consumer companies and retailers should be prepared with innovations and changes, such as subscription offers, enhanced e-commerce capabilities, and larger, bulk packages for consumers who are at home more and spending more. Other areas of opportunity could be to enhance digital capabilities to improve efficiency. There’s no better time to move forward with bold, decisive actions, even as the sands keeps shifting.”
Speaking with ThinkBusiness, McFeely said businesses need to focus on the following areas to stay on top of the curve: “Consumer insights in order to fully understand those that shop with the brand. Deeper insights allow for stronger and more contextually relevant relationships to be developed.
“Consumer demand for healthier products, along with expectations for greater transparency and sustainability in the food value chain, will increase.
“Businesses need to be aware of socially conscious consumerism that will continue to grow as people seek brands that they trust and that align with their values. Industry leaders need to stay focused on shoppers who seek purpose-driven brands that are responsive to an array of environmental, social and governance (ESG) concerns,” said McFeely.
By John Kennedy (john.kennedy3@boi.com)
Published: 20 April 2021
