The Supply Side: Retail consumers will feel pandemic’s impact into 2023
The ongoing COVID-19 pandemic has dramatically reshaped how consumers think and shop. As retailers try to transition from a place of fear to hope with a vaccine rollout, it will be vital for them to navigate around a few sentiment shifts, according to Andrea Bell, director of insight at trend forecasting firm WGSN.
During a speech at the recent National Retail Federation “Big Show” virtual event, Bell shared consumer sentiments and new shopping cohorts expected to have a global impact into 2023. She said time perception and numbness are two massive consumer sentiment shifts during the pandemic, and they will not likely soon go away. Bell said the uncertainty altered consumers’ grasp of time, changing memories and promoting a renewed focus on an idealized past.
“Time has become elastic and seemingly nonexistent,” she said “Days seemed to drag on, while months seemed to pass in the blink of an eye.”
Bell said consumers have focused on passing the time, making the most of it, and how to endure it. She said nostalgia served as an anchor, and consumers have returned to products and experiences that feel comfortable and familiar. That was seen as retailers like Walmart said they could not keep board games, bread makers or adult bicycles in-stock as consumers spent more time at home.
Bell said as the nation moves beyond the pandemic, consumers will not likely abandon brands they clung to during the pandemic, including canned soup, macaroni and cheese, salty snacks and other consumer packaged goods products. Bell said it will be necessary for retailers and consumer brands to follow consumers through the next phase of recovery using social media ad targeting and thoughtful packaging and displays to remind consumers of their shared connection.
Bell said consumers also felt numbness with emotional turmoil amid the pandemic. Bell said the numbness sentiment gave rise to unique coping mechanisms as people looked for ways to feel and heal.
“2020 brought intense emotional clutter from fear to outrage to joy and grief,” Bell said. “That drove a sense of fear of finding out and apprehension of what’s to come.”
She said numbness is a psychological response, and so is compassion fatigue when consumers feel they have given so much there is nothing left. Bell said warped time perception and numbness are real consumer sentiments that retailers and brands will need to consider as they plan for the recovery phase.
While 2020 had its challenges for consumers and brands, Bell said there is still hope and belief things will get better. That was evidenced by how consumers spent more this holiday season, growing sales 8.3% from last year. The increased spending took place before eligible Americans received their second federal stimulus of $600 per person. Bell said consumers are cautiously motivated to get out more. She said this “cautious motivation” sentiment would likely continue through 2023 as they adopt ways to return to normalcy carefully. Consumers may continue to do most grocery shopping online to be picked up at the store. The significant shift in online grocery will likely continue.
Walmart President and CEO Doug McMillon has said the retailer saw three-years’ of growth in online sales in just a few months. He said this forced the retailer to invest heavily in additional capacity and hiring 500,000 people to work in stores and the supply chain. McMillon said the biggest challenge for Walmart is ensuring shelves are stocked. He said supply chain hiccups and unprecedented consumer demand for certain products left shelves empty too long.
Bell said the future is not all gloom and doom. She said by 2023, the new coping mechanisms will be in place. One example she gave was “structured caring,” which she said is consumers learning to step back and objectively examine every piece of information and determine appropriate responses instead of having a knee-jerk reaction. She said structured caring results from increased patience during the pandemic among consumers. She said preserving emotional reserves will be essential to one shopper group she dubbed “the predictors.”
Bell said predictors seek stability and security. This group is also adopting a recessionary mindset and will likely proceed with caution on spending, regardless of whether they have the disposable income. Bell said a widening attention divide would also challenge the cohort. For this group, Bell said the future is auto-refill or auto-replenishment, subscriptions, preorder and seamless savings such as offerings that check for and apply discounts. She said retailers and brands will need to court this shopping cohort or risk losing their business.
Bell said another shopper group that has emerged amid the pandemic is the “new romantics.” This group is focused on reconnecting with emotions, community and work/life balance.
Bell said increased workloads and a deep need to reconnect with their feelings fuel this shopping cohort. She said this group has an interest in sustainability and diversity. Connecting with the new romantics will require helping them create stronger emotional ties with their days and surroundings. Bell said this shopper group would look for solutions such as CBD offerings and mind-elevating food and supplements in addition to emotional hygiene products that focus on stress management, anxiety and other mental health challenges. She said retailers that align with whole health will be in a strong position to service this shopper segment.
Bell’s research also tagged two other future shopper groups, the “impossibles” and the “conductors.” She said the two groups will demand more from retailers and brands, and companies should not ignore them. She said the anger of 2020 and a lack of institutional government assistance fuels the impossibles. This cohort has relied on technology to connect with others to create a future where anything is possible. Brands and retailers can win affection from this shopping cohort by making their social and diversity stances publicly known.
Bell described the conductors as multidimensional, multitalented and always multitasking. She said brands and retailers can win affection from the cohort by offering new experiences during their shopping journey. That can be digital interaction from brands before the shopping trip, such as providing coupons and other pertinent data on company philanthropy and social awareness. During the shopping trip, retailers and brands can also create a personalized experience this group expects.
Pushing messages, offering special discounts and taking friction out of the experience through touch pay are examples of how retailers and brands can align with essential consumer groups.
EDITOR’S NOTE: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.