by We must be creatures of habit. I say that because while most of us agree the pandemic pretty much turned most businesses upside down, it looks as if most home furnishings retailers have gone back to running their shops the way they did before the pandemic.
And while that may be comfortable — and by extension, good for those who are — is that meeting the needs of consumers, who clearly have changed up their buying patterns since Covid-19 came to town?
When shelter-in-place mandates came along, consumers who found themselves stuck at home had few options other than to shop online, regardless of whether they had done so in the past.
As homebound consumers found themselves forced to try new brands, another curious thing happened. Almost in the blink of an eye — actually in a click of a keyboard — brand loyalty fell by the wayside.
That observation is supported by a recent study by McKinsey & Co. that found 40% of consumers they polled saying they switched brands during the pandemic.
In fact, a report from McKinsey’s identified five retail paradigm shifts that have occurred as a result of the pandemic.
Consumers do a deep-dive into digital: Digital adoption across sectors has increased dramatically in the past few months. Remote working, learning and shopping likewise have surged. Reliance on digital was growing before the pandemic began, and a meaningful amount of this online penetration is expected to persist after the pandemic is over.
Focus on value/necessities: According to McKinsey, the hike in dollars spent on shopping digitally has not been able to make up for the drop in overall consumer spending. One-third of Americans have reported a decrease in their household income during the crisis, and 40% reported that they are also spending more carefully and allocating more of their spend to groceries and household supplies instead of higher-ticket, discretionary items such as cars, travel and furniture.
Much less loyal: Since the crisis began, 75% of American shoppers say they have changed something about the way they shop. More than 30% say they have tried a different retailer with price and value being the key reason for switching
Spending on home-related goods: With some 80% of those polled indicating concern about leaving home, their spending reflects that shift, as more shoppers allocate spending to in- or at-home activities.
Not so jolly holiday outlook: With only about 20% of Americans saying they are optimistic about the prospect of a quick rebound in the United States, it’s not a surprise that over 40% report planning to spend less on holiday shopping this year.
We all are familiar with this definition of insanity: Insanity is doing the same thing over and over again and expecting a different result.
Assuming we can agree to use that definition, we would be insane not to present a new face, a new proposition or a new message to keep our existing customers as well as attract new ones.
Retailers outside our sector are finding success in a stagnant market using a host of strategies including switching to digital signage, livestreaming, embracing “shoppertainment” and setting up loyalty kiosks, and a growing number of retailers are attracting attention and sales with the use of holograms in their stores and window displays.
Business is likely to remain flat in the foreseeable future, so we have two choices. We can wait for it to get better or we can up our sales by upping our individual games.
Great article by Ray Allegrezza. He nailed it on the spot