Consumer Trends Grow Clear as Mandates Lift and Shoppers Emerge From Home
With increasingly more consumers getting vaccinated against COVID-19, retail analysts are expecting an increase in foot traffic during the second half even as shoppers continue to buy goods online. But what do shoppers expect when they visit a physical store?
Michael Renz, global retail technology leader at EY, said consumer expectations will not be consistent but there are a few things retailers will need to do. For example, there will be segments of shoppers who will expect retailers to provide a safe and sanitized environment. And there will be shoppers who will expect a more experiential experience in-store. Here, Renz shares insights into these and other consumer trends heading into the second half of the year.
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WWD: As mask mandates lift, and those vaccinated increase, what are consumers expecting in terms of a retail shopping experience?
Michael Renz: Two things that we’ve learned in the course of the last year and through our own consumer research are that recovery from this pandemic is going to be very uneven, and that different consumer segments will have very different expectations about their shopping experience depending on what they want at any given time. However, it’s worth pointing to three trends in consumer expectation that we see unfolding.
First, expectations are bifurcating between hyper-convenience and experiential shopping. The former of these accelerated and the latter suffered during the pandemic as consumers sought to minimize risk exposure, but both will assert themselves more as consumers grow in confidence. On the one hand, this means that they may expect contactless shopping, curated assortments and auto-replenishment but on the other hand, they may expect high levels of service, more human touch points and things that can help them gamify shopping as a social activity. It’s worth bearing in mind that a year or more of lockdown is likely to have created pent-up demand, not only for products but also for human interaction.
Concerns over safety may be abating, but they won’t disappear. Consumers want a return to normal but they have habitually picked up behaviors over the last year that will become more entrenched. This means we’re adjusting to a new normal. Social distancing, using hand sanitizer and wearing masks have all become second-nature to consumers. They may be relieved about not having to wear masks anymore, but they may balk at going cheek-to-jowl with fellow shoppers in a crowded store space. The frenzied crowds we’ve traditionally seen at shopping events like Black Friday now appear alien and consumers venturing back into malls and shopping centers will need reassurance through creating a sense of space and visible safety measures that builds up their confidence in retail.
The expectation gap between physical and digital channels is narrowing. Retailers could once point to a clear distinction between high-touch physical and high-tech digital retail, but consumers now want the best of both worlds. They want their physical shopping experiences to be augmented by technology to make things easier and they expect the same levels of service and advice in their online shopping experiences. People have talked of omnichannel for over a decade as an aspiration for retail but it’s fast becoming a basic expectation for those who want to thrive in the future.
WWD: What in-store technology should merchants and brands be considering at this time?
M.R.: It’s very easy to talk about all the bells and whistles that retailers should be adding to their in-store offering. But before doing they really need to get the basics right. There’s no point in having smart mirrors, AR overlays and biometric payments if you aren’t selling the right products and can’t keep your shelves stocked. Retailers need to get the boring stuff right first to achieve operational excellence by effectively leveraging data and analytics to understand their customers at the front end of the business and connect this to their suppliers at the back end of the business. However, in terms of meeting expectations over experience, there are plenty of emerging technologies for retailers to consider, depending on how they want to shape their value proposition. They largely align with the identified expectations of their customers:
Frictionless will be table stakes. Contactless and cashless payments are rapidly evolving into biometric payments and checkout-less stores. We’re seeing facial recognition implemented in some countries to enable people to pay with a smile. Consumers craving convenience will increasingly expect to walk in and out of stores without having to queue or pay.
Retail can thrive as entertainment or theater. Much is being made of smartphone applications, AR overlays and smart mirrors to augment and gamify shopping experiences. This can be as simple as using app-based games in-store to unlock discounts or as complex as creating immersive multimedia in-store experiences in concept stores. This needn’t be driven by technology. Some retailers have thrived by building their in-store experience around hosting events, providing education or integrating with local community needs.
In-store personalization can bridge the physical-digital divide. Stores have been held back by their inability to personalize products and engagement in the way that online platforms can — but retailers are increasingly adding elements of personalization into their offering — by using technologies like 3D printing to customize or tailor products in-store. They can also use data to enrich human touch points by giving employees the information they need to provide better service and advice that’s relevant to their customers.
WWD: What role are mobile devices playing in this emerging from the COVID-19 period? Are shoppers using social for shopping?
M.R.: This points back to a point I made earlier about omnichannel becoming a basic expectation. Consumers are buying online more through smartphones but expect consistency of experience between channels. This blurring of the boundaries is a huge opportunity — although it isn’t just led by social. The locational data smartphones provide have huge potential to drive footfall and there’s been a proliferation of app-based platforms that use geo-tagging to point consumers in the right direction to the stores stocking the products they want when they want them. From a social shopping perspective, there are plenty of trends emerging, with China leading the world, but the most prominent I’ve seen are:
The rise of squad shopping. Although shopping online in groups using social media predates COVID-19, it really took off during lockdown and some studies last year estimated that one in five consumers had engaged with squad shopping. Easing restrictions may have put it on the back burner, but the number of apps and brands putting weight behind it is continuing to grow.
Shoppable content/streaming. The ability to buy through livestreamed content by influencers on video and social channels has been accelerating significantly in China, but has started to gain traction as a fast-growing digital channel in western markets with apps and social shopping events organized by platforms growing in prominence.
Social concept stores. We’ve seen retailers increasingly integrating their physical and digital offering and the endgame for this has been the launch of concept stores that blend social media interactions with in-store experiences such as the launch in Shenzhen of a social retail store by a leading luxury brand that enables people to also earn branded social currency.
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