How is Covid-19 transforming consumer behaviours? And how can retailers adapt?

 

By Anastasia Lloyd-Wallis
Head of Insights, Retail Doctor Group


During the last 18 months, we have seen some big changes in consumer behaviours, but which ones are fleeting trends, and which are here to stay? In this article, we will have a look at some tips retailers can action now and what to plan for the future.

In this new wave of lockdowns, it is important to stay connected with your consumers and use this time to build long lasting emotional connections that will drive loyalty to your brand. It is important to understand what consumers expect from retailers right now and what messaging will gain penetration.

So firstly, we will look at how can you stay connected with your consumers. It is critical to stay visible and keep speaking to your consumers during this period. Whilst your physical stores may be closed, you can still interact with your consumers through a variety of other mediums. Let’s have a think about what they are.

  1. What is your consumer database strategy? What can you tell them about what is happening in your business during these times? and what is new? For example, are there new products or an additional service you can offer during this time? Is there a subscription model where they can stay connected with you for minimal effort? How will you communicate your offer during this time?

Email is the fastest and easiest way to communicate with a database you have built pre-lockdown.

  1. What is your social media strategy during this period, utilizing a number of different platforms to communicate and stay connected with your consumers and really build an emotional relationship? The messaging may just be showing that you care, or it could be information on your products and services.

Consumers are now using social media more than ever to stay connected to the world. We are social beings by nature and a human connection is sought.

Social media gives retailers the chance to build relationships with consumers on a daily basis. These emotional relationships then lead to loyalty and word of mouth (currently the #1 influence on trying a new brand for the first time, RDG Insights)

RDG Insights research into consumer behaviour shows that 28% of consumers are now using YouTube to interact with brands and retailers.

This is even higher for certain retail sectors and demographics. Thus, it is important to understand where your consumers are, what platforms they spend their time on and want to interact with you. It is no longer as simple as having a Facebook page.

The last 18 months has seen the rise of TikTok with almost 1 in 10 of all consumers saying they use it to interact with brands. So even if this is not a platform you would use yourself, you have to put yourself in your consumers’ place, and ask, “What do they want?”.

  1. Then we need to think about the tone of messaging you are going to utilise? Different consumers are going to react to the situation in very different ways, therefore requiring different messaging, tone of voice and imagery to be used to really stay connected with you and really bond with you emotionally during this time. For instance, certain consumer groups will be looking for reassurance, security and reliability. They want you to look after them and the messaging will all be around how you can do that and how they can rely on you. Another group of consumers are looking for what is in it for them – really direct to the point, what the end outcome will be and what they can expect. Finally, we have a group of consumers that are looking for optimism. They want to know what the silver lining is, what they can expect at the end of the tunnel, what they can get from you and what will be the upside of all of this. By really understanding how to talk to your consumers and what messaging and tone of voice used can really make a big difference to how they connect with you and if this messaging gains penetration from them.

We have looked at how to stay connected with consumers right now, but what does the future consumer look like? Will their behaviour return to pre-pandemic?

We have talked to consumers to understand the key trends that will continue into the future, so here are our predictions:

  • Convenience – Consumers have got used to having everything they need at their fingertips, increased online presence and being able to connect with brands 24/7. Even consumers who were typically not digital are now purchasing online e.g., we are seeing older demographics (65+) now purchasing groceries online. These habits have now been built and will continue going forward. We have seen that 1 in 3 consumers have used “click and collect” in the last 12 months. Whilst we expect this to slow in popularity, we would still expect consumers to want convenience and simplicity. Therefore, it is vital to understand your consumer journey, how you can remove friction from their paths and make it easier for them to purchase from you.
  • Loyalty – Consumers are more loyal than ever before to the retailers that have supported them during the pandemic. We are seeing that 89% of all consumers are now members of loyalty schemes and ¾ of those say it influences their behaviour by either visiting stores/ sites more often, spending more or talking about it with friends. The importance of building a connection and having an appealing loyalty offer is paramount. Understand who your consumers are and therefore what relationship they want from you, is transactional. Do they want an experience? Do they want security? And then determine how your loyalty program can offer this.
  • Local – During the lockdowns, consumers have been forced to shop local, and this mindset of local retailers, local produce, Australian owned has become a vital part of our daily life. Consumers now rank local more important than sustainable. Whilst this is an obvious effect of the need for emotional support and human connection, this trend will be set to continue as the economy rebuilds and consumers establish new routines.

The key takeout for retailers is listen to your consumers, determine who they are (not just a number), get to know them on a deeper level to be able to provide the support they need at the moment and in the future, understand the desired customer experience: Is this transactional or emotional? and how you can cater to this.

Acknowledging the emotional drivers of your consumers allows you to not only support them but also predict their future behaviours. This, in turn, opens the way to build differentiated solutions and offers for your brand. Businesses, therefore, cannot afford to not being able to grasp the deep insights into their consumers’ minds, more so in this unprecedented period where retailers need to both survive and thrive.

For assistance with consumer research and journey mapping or accessing our research studies, visit www.retaildoctor.com.au

 All research quoted is from RDG Insights Division’s Consumer and Retailer Sentiments 2021.

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