Future Insights: Shopping Behavior 2021

What will the future of e-commerce look like? Due to the current pandemic, society became digitalized faster than we ever imagined. E-commerce surged greatly, leaving physical stores with dwindling loyal customers. In this blog post, we delve into the statistics reflecting behavior during the 2020 pandemic and the insights we carry forward into the future of online shopping from an industry perspective.

The pandemic has globally changed our shopping habits, with e-commerce rising sharply as people stayed home. According to ”The Future of Shopping Arrived Early” by Facebook IQ, two categories in retail stand out: 1) essential items and 2) non-essential items. At the pandemic's start, consumer anxiety led to a rapid spike in buying over a short period, which left shelves empty in many grocery stores. In the U.S., the food and beverage category increased by as much as 11.3% throughout the year. These behavioral changes are just the beginning. Understanding new consumer behavior and expectations is critical to align them early in your business model, user experience, and marketing strategy – before competitors catch up. Below, we examine consumer purchasing behavior during the pandemic.

CHAPTER 1

Shopping Redefined: A reassessment of priorities leads to complex purchasing decisions. Previously, consumer purchase decisions were based on what was available in stores. This has shifted in recent years with the rise of e-commerce and paid marketing in digital channels. In 2020, e-commerce purchases via mobile devices increased by 19% globally, accounting for 65% of total e-commerce revenue worldwide. E-commerce has evolved, offering consumers more options. Price is seen as a decisive factor both online and in-store, with 61% saying they actively seek discounts or deals. Many have faced financial strain during the pandemic, leading experts to predict that price will continue to be a critical factor in purchasing decisions. “One shift consumers have realized during COVID-19 is that their shopping preferences have become more significant. It comes from various reasons, not just safety but also payment options, convenience, and purchase pathways. These drive customer loyalty – or disloyalty.” – Nicole Leinback Reyhle, founder of Retail Minded

What do consumers say themselves?

71% say it's very important to feel safe shopping in a physical store. 68% expect retailers always to have products they're interested in stocked. 75% say the price determines where they shop. 68% state reliability is a determining factor in where they shop. 65% consider availability and convenience important. 63% think good customer service is crucial.

With these insights, what should marketers consider in 2021?

Adapt your platforms to your audience's purchasing behavior.
Whether consumers choose to shop in-store or online, both experiences need to feel safe, reliable, and straightforward.

The right message to the right audience.
Whether a consumer makes a purchase is individual. It's important to approach each consumer according to where they are in their buying journey. Our advanced ad tools let us optimize ads where consumers are most receptive.

Values in focus.
Increased consumer awareness requires higher demands. Whether a consumer chooses to shop in-store or online, your brand’s values will be crucial, shaping communication to gain trust from potential customers. What position do you take in the market, and how do you differentiate from competitors?

CHAPTER 2

Navigating Shopping Risks: Consumers face new points of friction both in-store and online

Past research indicates that obstacles or delays in a customer's journey can cause them not to complete a purchase. Additionally, poor customer service or long queues have been other contributors. During the ongoing pandemic, there's been a shift from time and economy-focused consumer behavior to an emphasis on physical and psychological risks affecting purchase power.Consumer buying behavior has identified six types of risks from different perspectives.

Functional: Will this product or experience work as expected?

Physical: Is this product harmful to me?

Social: What will others' experiences with this product be?

Psychological: Will this product or experience trigger emotional reactions?

Economic: Can I afford this product or service?

Time: How much time will I need to spend purchasing this product?

“I think consumers expect companies to make them feel safe. It's part of the customer experience. A good retailer will do everything possible to communicate what they're doing to protect customers and staff.” – Clare Bailey, FOUNDER of The Retail Champion.

What risks do consumers say they faced while shopping in stores during the pandemic?

Time risk.
38% felt they spent a long time in line and had difficulty finding items.

Functional risk.
37% found their products were out of stock or wanted to try before buying.Financial risk.
35% experienced high prices and few discount periods.

Physical risks.
25% didn’t feel safe in crowds.

Social risk.
17% hesitated due to making a discreet purchase.

Psychological risk.
9% felt stressed or irritated while shopping.

Months after the pandemic began, 71% of consumers say safety is a high priority for in-store shopping over online. This will likely continue to be a key factor in consumer purchasing decisions. With these insights, what should marketers consider in 2021?

Develop services to reduce risks in physical stores.

Not needing to walk around grocery stores to shop and being able to pick up pre-packaged goods and have deliveries made consumers feel safer than shopping directly in-store. If your business offers these services or primarily provides smart online shopping experiences, communicate it and get ahead of competitors!

Optimize your digital platforms.

Consumers are increasingly turning to e-commerce and mobile shopping, so ensure your digital platforms are optimized for mobile devices. Ask yourself – what hygienic factors would make you prefer shopping online over a physical store?

Flexible payment methods, fast deliveries, and easy returns.

Building trust with new customers through smoother online payment functions, fast deliveries, and easy returns creates a great customer experience likely to make them want to return to your store.

CHAPTER 3

Role Reversal: “In-Store” Becomes Transaction-Based as Online Becomes Rich in Experience

The pandemic accelerated society's digitalization and drove e-commerce to grow explosively in 2020, largely because fewer people opted to shop in physical stores. But this is likely not a temporary shift but the new normal – 32% plan to spend less time in physical stores even after the pandemic ends. It's next-gen e-commerce. Consumers are looking for more convenient shopping and expect to easily find needed products based on their lifestyle.

“People shop with purpose. They've probably done a lot of research, they know exactly what they want, they enter, do it, and leave. They spend more per visit; their visits are focused. It suggests an immense amount of research online before the store visit, knowing exactly what to head for and achieving it.” – Clare Bailey, founder of The Retail Champion.

What do consumers say about the shift from spontaneous to planned buying globally?

Food/drink: 68% plan what type of food and drinks they buy, while 32% make spontaneous purchases.

Household items: 68% plan their household purchases; 32% make impulsive buys.

Furniture: 66% plan their furniture purchases; 34% buy spontaneously.

Electronics: 67% plan their electronics purchases; 33% buy impulsively.

Beauty: 64% plan which beauty products they buy, while 36% make spontaneous purchases.

Personal items: 65% plan personal goods purchases; 35% buy spontaneously.

Clothing: 58% plan their clothing purchases; 42% buy impulsively.

What do consumers say about how they want to discover brands and products in the future?

38% want to categorize products by current trends.37% want to categorize products by different lifestyles.

36% want to get short questionnaires that then tailor products to the customer’s unique needs.

35% want to take a photo of a product and get search results for that product or similar ones.

34% want dynamic lists based on previous purchases and needs.

33% want suggestions on trending products among their friends or network.

29% want suggestions for products that assist in reaching specific goals. (For instance: Furnishing a children's room or marathon running gear)

29% want their smart home features (like Alexa or Google Home) to inform them of useful products.

24% want to discover products through influencer live streaming using and reviewing those products.

23% want more brand-organized live streams with company reps recommending the right products for the individual.

With these insights, what should marketers consider in 2021?

Streamline your physical store.
Consumers are getting used to timely efficient shopping and see that physical stores should make purchases easy with simple store navigation and fast checkout. Are you at the forefront of these factors affecting the customer's in-store experience? Then communicate your physical USPs!

Try new ways to reach your audience.
Live shopping surfaced as a rising trend during the pandemic and is an effective way to engage and reach customers when physical interaction isn't possible.

Experiment with Discovery commerce
Discovery commerce on Facebook allows for collecting data about your audience’s purchasing interests, viewing interactions, and facilitating easier exploration of your range and matching products likely to interest them.

Personal customer service.
Consumers seek reassurance while shopping online, and through active customer service via social media, offering quick responses and advice, there’s a significant opportunity to build unique trust, often naturally in physical stores.

CHAPTER 4

Across the Street and Around the World: Cultural baskets become “glocal”. Consumption and shopping behaviors have taken on new significance during the pandemic, fostering a stronger community between local and global enterprises. The pandemic has encouraged more local shopping, with consumers wanting to support small businesses struggling amidst current challenges.

“What’s really interesting is how customer presence moved away from town centers back into local communities, aligning with those working from home. Those home working or on furlough purchased more locally, engaging more with communities and smaller shops.” – Clare Bailey, founder of The Retail Champion.

So, what did consumers say they did to support their local businesses?33% – Purchased from a local/small business.

32% – Recommended a local/small business to family or friends.

30% – Followed or liked the social media page of a local/small business.

23% – Wrote a positive comment or review on the social media page of a local/small business.

20% – Recommended a local/small business to a company group

20 % – Shared or reposted offers or content from a small/local business on social media.

Given these insights about local engagement, what should marketers focus on in 2021?

Support local businesses.
With uncertain pandemic duration and people spending more time at home, local small businesses find it hard to survive. Supporting them is crucial; engaging on social media serves as a vital channel to spread the message. Could your company, for example, position itself stronger in the market by forming new collaborations with small businesses aligned with your operations?

Digital presence for small business owners.
Whether owning a large or small business, the pandemic has buoyed growth, demanding small business owners to become active on social media. Opportunities abound, worth seizing! Review your media budget and actual ROI. If you had been advertising in the local newspaper, consider investing in geographical ads instead, or why not launch your web store via Facebook Shops and spend on quality photo productions for attractive product images.

CHAPTER 5

The New Loyalty Equation: How Empathy, Transparency, and Value Spell Loyalty. Changes in consumer purchasing behavior occurred during the pandemic. Over 60% say they adjusted their behavior by trying new brands. It unsettled consumer loyalty to pre-pandemic stores. Purchases have become more complex and challenging, driven by price and offer since loyalty and personal relationships cannot be built in the same manner.

“Customers have greater expectations from retailers to deliver strong customer care, which influences brand loyalty. With utilities for price and retailer comparisons increasing, retailers must consider how this impacts their business.”– Nicole Leinback Reyhle, FOUNDER of Retail Minded

What encourages consumers to increase repeat purchases on an e-commerce platform?

Price: 49 %

Quality products: 39%

Ease of finding products they’re looking for: 37%

Reliable website: 37 %

Wide product selection: 34%

Different delivery options/delivery policies: 34%

Reliable payment methods: 29 % With these insights, what should marketers consider in 2021?

Review your customer retention strategy
With numerous offers and price alternatives, retail remains competitive. Review the points mentioned to explore how your brand delivers communications to foster loyalty within your target audience segment.

Communicate with your customers.
Consumers often choose brand loyalty when they feel a sense of community. Communicating with customers is key to building loyalty and relationships, exchanging important information or sparking dialogues offering feedback or questions. 87% express interest in communicating with brands and e-commerce platforms.

Summary

The digital shift witnessed during the pandemic likely would’ve progressed regardless, but Covid-19 hastened the process. We can’t yet foresee post-pandemic society, but we have to stay informed and ready for change. Traditional businesses not adapting or receptive to change may struggle to survive long-term. The shift now signifies the new normal. In this new normal, we must act and seize the fantastic opportunities presented by the digital landscape!

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This blog post summarizes: ”The future of shopping” .