COVID Vaccine to Change Retail Buying Patterns?
There are a lot of unanswered questions revolving around the forthcoming COVID-19 vaccine, from who will be the first to receive it to the required safety measures and beyond. Amidst all these questions, retailers everywhere have one big question: will a COVID-19 vaccine bring the shopping world back to normal? Once there’s a vaccine, will we return to our pre-coronavirus economy, buying patterns, and lifestyles?
The answer is, of course, neither simple nor straightforward.
While we’re all on the edges of our seats waiting for the approval and release of an effective COVID-19 vaccine, it’s possible—even probable—that things will not revert back to the era before coronavirus. COVID-19 has changed our society, our values, and our buying patterns; and while some things will “go back to the way they were before,” this global pandemic may have changed our lives for the foreseeable future—regardless of a vaccine introduction.
What retail buying patterns can we expect to change after a COVID-19 vaccine has become widespread?
Purchasing demand may spike temporarily
People want life to return to normal. They’re eager to leave their homes, see their friends, go to restaurants, and shop in stores. Once a vaccine has been effectively distributed to enough people and restrictions are lifted, we will likely see consumers dive head-first right back into the in-person shopping experience. What was once a weekly treat pre-2020, like eating out or seeing a movie, will now feel like a novelty that consumers just can’t get enough of.
This spending increase will happen quickly, and retailers should begin preparing now for this influx of heavy demand almost instantaneously. You can get a head start by learning how successful supply chains deal with volatile demand.
Discretionary spending may decrease
Ultimately, though, while we may see a temporary spike in purchases, we should anticipate a lower “free spend” overall following that initial surge. Things are going to level off quickly. During the COVID-19 era, there was a dramatic reduction in discretionary spending amongst consumers. While a small population was still spending regularly through ecommerce amidst a shutdown economy, most consumers became more price-sensitive and leveled off their purchasing habits as unemployment rates and job uncertainty skyrocketed.
Even when employment again becomes stable, which will likely occur after a vaccine has been implemented, we anticipate that consumers will still be mindful of their spending habits—at least for the next few years. Just like any recession or major impact on the economy, most people choose to save. Then, in a few years’ time, when the vaccine is consistent and this year is just the punchline to a joke, overall spending will likely again increase. For now, many people are treating it like a recession and these saving habits are likely to persist.
This ongoing price sensitivity will create a marketing obstacle for retailers. Companies will need to find novel ways to interact with and encourage consumers to make purchases. A key to this success will be transparency and trust, as we’ve seen a significant shift in consumers purchasing primarily from trusted brands, rather than trying out new independent retailers or small businesses (McKinsey & Co.).
Omnichannel is no longer an option
Ecommerce has grabbed an overpowering share of the retail market since COVID-19 hit, especially for the holiday 2020 season. Lockdowns forced non-online shoppers to begin online purchasing, while also forcing infrequent ecommerce buyers to purchase almost all of their goods online. Most experts believe that ecommerce will continue to be the dominant avenue for purchases, but now there will be no separation between online and offline customers.
Starting with the introduction of curbside pickup and BOPIS, retailers have been working diligently to smoothen the processes between online and in-store experiences. These sort of omnichannel offerings and experiences aren’t going to be a competitive advantage for stores as they once were. Being omnichannel is likely going to be the only way for big box stores and independent retailers alike to connect with clients and cater to the new normal of retail buying patterns.
“Experience” will reign supreme
Several experiences may be shut down for a while, if not forever, like play areas in McDonald’s or open buffet meals. However, this doesn’t mean “experiences” are gone forever. In fact, quite the contrary. Retail stores are likely to become less about shopping, due to the swell in ecommerce, and more about the experience of the store itself.
While people have shifted to online entertainment during COVID-19, they’re going to want to get back to in-person entertainment options soon. And they will be expecting novel, unique experiences from some of their favorite retailers. The idea is that if they’re going to venture into a store and “risk” their health, it better be worth their trouble. This means that retailers will need to emphasize the ease of omnichannel shopping, in-store aesthetics, unique marketing campaigns, and experiential retail that drives both in-person and online purchases.
Health will continue to be a priority
There’s a beacon of hope amidst all this. Consumers are focusing more on health and hygiene than ever before, both in terms of the products they purchase, the stores from which they purchase, as well as how they live their lifestyles. If stores, travel agencies, and other organizations can prove health and safety to their consumers, things might be able to “go back to normal” after a vaccine. For a lot of customers, it’s about layering their safety. If there is a vaccine available and the consumers believe a store or hotel has top-tier cleanliness procedures, that company will become one of their go-to, trusted brands.
Ultimately, this means it’s possible purchases will increase, it will just be that those purchases will shift to retailers that can prove that they prioritize health and hold the same values as their consumers.
Change in buying patterns isn’t happening soon
49% of consumers say they won’t return to pre-COVID levels of activity until a vaccine becomes available, but we’re now seeing that fewer and fewer people trust the vaccine. Even if a vaccine were introduced tomorrow, we wouldn’t see pre-COVID levels of activity for several months after the vaccine has been entirely rolled out (and proven effective). There are a lot of ways for COVID restrictions to end, and there are even more ways for these restrictions to impact retail buying patterns moving forward. Ultimately, though, a lot of the changes that have happened since March 2020 are unlikely to shift all that much within the next few months.
It may not be the news you want to hear. But it’s the news you need to hear for the future of your business and transportation, so you can continuously innovate and stay ahead of the game.
Want to ensure that you can keep up with the changing buying patterns of your customers? Contact us today to schedule your free consultation and let us show you how you can keep up with the newly changing retail buying patterns.