CEO at Bazaarvoice, the leading provider of product reviews and user-generated content (UGC) solutions.
As a key driver of transformation in retail over the last decade, e-commerce was already growing rapidly. Then the Covid-19 pandemic happened, which aggressively fueled company digitalization and the flight to e-commerce and triggered major shifts in consumer shopping behaviors — changes that I think are here to stay.
My company saw a massive increase in demand for our services. With more and more consumers online, brands and retailers that didn’t already prioritize e-commerce before the pandemic had to rush to do so, and many of those who already had a solid online presence saw great success.
Had the pandemic lasted just six weeks, we might have made temporary changes to our behavior and then returned to our old familiar ways. But it’s been going on for almost a year and a half, and because our brains and our behaviors have become accustomed to the new world, I think those behavioral changes have become permanent.
According to data from IBM, the pandemic accelerated the shift to e-commerce by about five years. Two years ago, online purchases represented just under 14% of all retail sales. In 2021 that figure is expected to be just under 20%. That’s almost a 50% increase in just a couple of years. The impact of this is huge, with companies pivoting rapidly to meet the growing needs and expectations of consumers and their e-commerce experience.
In a move that reflects the shift in consumer shopping behavior — less in-store, more online — many of the big retailers have transformed the layouts of their stores, converting shop floor space into fulfillment centers. For example, you can order a product online and pick it up within a few hours at Target, Walmart, Best Buy and more.
Consumer behaviors are really driving this transformation of retail. When people were confined to their homes or the immediate area during the pandemic, with little else to do, they spent more time online and more time on social media. Social media platforms such as Instagram and TikTok increasingly became the places to be, which led to more consumers discovering products online. Social media is increasingly where consumers go to discover new brands and retailers, according to research by the NPD Group.
The pandemic also created a shift in consumer loyalty. The supply chain issues and shortages that affected many brands and products during the pandemic meant that consumers who couldn’t get hold of a specific, familiar brand were forced to try an alternative. Through our “Behavior That Sticks” research, we found that 83% of the shoppers we surveyed intend to continue to shop for the brands that they recently discovered.
After a year of hardship and uncertainty when social justice issues were thrust into the spotlight, shoppers want to put their money where their mouths, and their beliefs, are. As a result of this, another trend that shows no signs of being reversed is the consumer focus on brand values. As brands and retailers compete for consumer loyalty, consumers are demanding to know their stances on socio-political issues. Whether it’s climate change or Black Lives Matter, consumers are increasingly showing loyalty based on what a brand stands for. Brands that want to engage with a consumer to increase lifetime value have to listen and respond to that consumer passion.
Another potentially permanent outcome of the shift to e-commerce is heightened consumer expectation. People expect more from brands and retailers than ever before — not just great products, but exceptional customer service, convenience and an amazing customer experience.
The message from the consumer is clear: “If you want to succeed in winning me as a customer, you have to figure out how to inspire me wherever I am. And unlike in physical retail, I can bounce around from a search engine, to Instagram, to your product site and to a competitor’s site, very, very quickly.”
Our “Behavior That Sticks” research, which echoes research from Google, shows that consumers aren’t going back to their old ways but are readily embracing these new ways. If you’re to engage with customers, you need to continually adapt to the rapidly changing demands in the new normal.
How can you do that?
• Stay connected to your customers to increase their brand loyalty. People want to feel that they matter, especially when they’re existing customers, so personalize your communication and your marketing; personalize everything.
• Know where your customers are. People can be seen and heard on social media, and that provides a great opportunity to connect and interact with them — for example, liking, responding to and sharing posts where they’ve mentioned your business.
• Make customers feel connected to your brand and show them that they share the same values. Communicate your values and what you stand for as much as possible through your communications, marketing and website. Customers who share your values are more likely to become loyal ambassadors of your brand. Your values can influence new customers to choose your brand over that of a competitor.
And lastly, get comfortable in this new normal, but not too comfortable. If there’s anything the last year-plus has taught us, it’s how agile retail needs to, and can be. Consumers are no longer satisfied with the status quo and expect you to be pliable to their ever-changing needs. Go to them; don’t make them come to you. And make their shopping experience as simple and as enjoyable as scrolling social media.