Re-engaging Consumers Amid and After Covid-19
Photo above by Arturo Rey.
Shortly after the pandemic caused retail stores around the country to rapidly adapt their business models to address shutdowns and changes in consumer habits, CodeBroker conducted research to explore how shopping behaviors were changing.
The resulting report, Consumer Shopping Habits During the Covid Pandemic, offers insights into what has changed, which changes are likely to persist even after the pandemic subsides, and what retailers can do to protect their bottom line.
A Retail Apocalypse?
It comes as no surprise that retailers have taken a hit during the pandemic. Not only have shutdowns limited retailers’ ability to provide services as they have traditionally, but consumer spending is down as many have faced layoffs and continued uncertainty over their economic futures. According to CNBC, “The coronavirus pandemic has forever altered the retail landscape.”
Some in fact have not survived. Closures of such iconic retailers as Lord & Taylor and Pier 1 Imports have been widely reported. Of course, many brick-and-mortar retailers were already struggling to compete with online behemoths like Amazon even before the virus hit. Still others have been able to survive—even thrive—in the midst of the pandemic. And, as CodeBroker’s research points out, there are some specific things that retailers can do to remain relevant during and after the pandemic, and even to draw business away from fierce competitors like Amazon.
What Shoppers Tell Us About Their Covid-19 Spending Concerns
It shouldn’t come as a surprise that overall shopping is down significantly at both online and physical stores since the pandemic started. Many respondents’ comments pointed to the fact that they still do not feel safe shopping at physical stores unless it is for an item that they absolutely need. A large number of respondents also indicated that they are limiting their retail spending for financial reasons due to the uncertain economy.
While more than 60% of survey respondents indicate that they expect to continue spending less as the pandemic continues, they do provide some indications that there are some actions retailers can take to maintain revenue, including employing high-value mobile and digital coupons and offering free shipping on returns.
By paying attention to what matters most to today’s consumers and the drivers that will prompt them to purchase from retailers online and off, marketers are finding that real opportunities remain despite the pandemic. The good news for brick-and-mortar retailers is that more than half (53%) of respondents say that now that their favorite stores have reopened, they plan to return to their physical locations.
Using Coupons to Drive Both Online and In-Store Shopping
High-value coupons can get consumers back into stores. In fact, 61% of respondents indicated that a high-value mobile or digital coupon for in-store use would get them to change their mind and visit a store’s physical location. This represents a significant opportunity for retailers to leverage their CRM systems to send personalized coupons and offers to customers based on their shopping history.
Retailers can also take advantage of mobile couponing for online sales—even to compete against retailers like Amazon. In fact, 75% of respondents indicated that mobile or digital coupons from their favorite retailers encouraging them to purchase from their online stores would cause them to shop there rather than with Amazon.
Whether shopping online or in-store, though, mobile coupons are vastly preferred over paper coupons: 77% compared to 23%. That’s an increase from 47% in 2018 and 67% in 2019.
Free Shipping and Free Returns Can Prompt Purchases
While online shopping can be convenient, consumers sometimes face added costs related to shipping—both when making purchases and if needing to make returns. Consequently, offering free shipping and free returns can be a great way to encourage purchases—70% of respondents indicated that free shipping would motivate them to purchase online from their favorite retailers, rather than from Amazon.
With online purchases at their highest levels for many shoppers, combined with tighter budgets for many, free shipping on returns can go a long way.
While shopping levels are down, pent-up consumer demand, combined with the strategic use of digital couponing, high-value offers, and free returns for online orders can help retailers maintain an edge during the pandemic and beyond.
Dan Slavin is CEO and co-founder of CodeBroker.