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Customer Loyalty

How COVID-19 Has Changed Consumer Behaviour

Written by 
Brad Davis
November 3, 2020

Consumer behaviour never stops evolving.

In fact, there are countless professionals all around the word whose full-time job it is to stay on top of these changes, so that the businesses they work for can adapt their marketing accordingly.

Every now and then though, something comes along and completely turns our lives upside-down. When this happens, shopping habits are often the first thing to change.

And so here we are, nearing the end of 2020, and our relationship with the internet has completely changed forever. From working and studying, to shopping and socialising; the internet has become an essential component of our day-to-day lives.

Let’s get specific, so that you can identify the key changes in how COVID-19 has changed consumer mindsets and behaviour. Why? This will help you adapt your marketing strategy, to ensure you continue to appeal to your target audience.

1. Increased social media adoption and use

hand holding smartphone with instagram

While it was already advisable that businesses have a social media presence long before 2020; COVID-19 has transformed social media from “optional” to “essential”.

In order to maintain a social connection with friends, family and colleagues throughout the strict lockdowns that gripped much of the world earlier this year, everyone climbed the “social media use” ladder.

People with no social media presence started to join various platforms, and those who used them occasionally started to use them much more.

A recent study by BazaarVoice revealed that not only has social media use skyrocketed this year, but users are also much more interested in discussing geopolitical, ethical and environmental issues.

From racial injustices in the United States to media censorship in China, a rising number of social media users are choosing to address current affairs around the globe, rather than simply uploading images of their meals...

Wondering how this shift in social media use affects e-commerce and marketing? We’ll get to that shortly.

2. Safety has become a priority when shopping

atm machine out of service due to social distancing

It goes without saying that customers are much more concerned about safety and hygiene when shopping now, than they were 12 months ago. Businesses must install social distancing markers, minimise product handling, and enforce the use of masks and adherence to social distancing measures at all times.

This isn’t just to appease authorities – it’s crucial for retaining customers!

And speaking of customer retention; much like cash vs. contactless payments, the average consumer is far more concerned with contactless loyalty than they were before.

Any business with a loyalty program would be wise to ditch their paper punchcards or plastic membership cards for digital loyalty solutions that allow customers to earn points and redeem rewards without contact.

Thankfully, there is no shortage of digital loyalty app providers that were ahead of the game when it comes to contactless loyalty. Whether your business consists of a brick-and-mortar shop or an online store, a contactless loyalty program is essential to customer retention and brand loyalty in 2020.

3. More people are shopping online

thank you for shopping with us online

This one should come as no surprise to anyone – the pandemic has accelerated the shift towards e-commerce. As mentioned above, the issue of safety and hygiene has played a big role in this shift. However, nationwide lockdowns throughout the world left many consumers with no choice.

To put this into perspective, retail websites generated 16 billion global visits in January 2020. Just six months later, this traffic had increased to 22 billion. Ecommerce has evolved from being a luxury to a necessity, with a sharp rise in consumers placing online orders for groceries and essential provisions.

According to a recent study by the United Nations Conference on Trade & Development, these changes are here to stay. The findings suggest that consumers who are new to ecommerce will continue to shop online, now that they have grown accustomed to it.

4. Less importance on buying branded products

branded clothing

When COVID-19 caught much of the world by surprise earlier this year, a new pandemic quickly took over – panic buying!

Given the shortage of products available on the shelf during this time, many consumers were forced to stray from the brands they usually buy from. As a result, consumer interest in branded products has rapidly declined.

Don’t get me wrong – plenty of people still ran out to get fitness gear from the hottest sports brands, or bought the new Apple iPhone 12.

But generally speaking, consumers are ditching branded products for their “less fashionable” counterparts this year, as people’s priorities shift. And speaking of priorities; there is another reason why consumers are less interested in household name brands post-COVID…

5. Increased demand for sustainable and ethical brands

bamboo toothbrushes in a jar

While this conscientious shift towards sustainability was occurring long before COVID-19 changed the status quo, this pandemic has succeeded in reminding us of just how vulnerable our society really is.

It stands to reason that consumers would take note of this, and make a conscious decision to shop with brands that are taking actions to improve the world we live in.

Capgemini Research Institute’s latest report, Consumer Products and Retail: How sustainability is fundamentally changing consumer preferences, indicates that consumers are more eager to shop with brands that demonstrate strong ethical values than ever before.

To be clear, we're not talking about well-written marketing campaigns… consumers are looking for brands that put their money where their mouth is when it comes to sustainability and ethical practices.

6. A stronger sense of community

community covid

Not since World War II have consumers been so inclined to shop locally, support independent businesses and explore their own backyard.

Foster City in California recognised this growing emphasis on supporting local businesses, and even started incentivising consumers to shop local, with the hugely successful Foster City Loyalty Program. This initiative serves as a remarkable example of how digital loyalty platforms can be used to *cough*foster” customer loyalty in times of trouble.

When times are tough, people start looking inwards. Whether that means choosing the local butcher over the supermarket chain, or the independent coffee shop over the international brand, or vacationing locally instead of getting on a plane; it differs for everyone.

Indeed, consumers have invested heavily in local tourism this year, out of necessity due to border closures and other national lockdown measures.

However, the same United Nations Conference on Trade & Development study I mentioned earlier revealed that consumers are expressing a long-term interest in local tourism over international travel.

Could this trend follow the same pattern as newly-converted online shoppers sticking to their newfound ecommerce habits? Or will consumers start booking international flights the moment they go on sale again? Only time will tell...

Will you adapt your business to accommodate the new norm?

While the six points listed above don’t even begin to outline all the ways in which COVID-19 has changed consumer mindsets and behaviour on a global scale, they should certainly give you an indication of some key changes that your business needs to implement ASAP in order to continue catering for consumers in this “new norm”.

For more information on how a contactless digital loyalty rewards platform can help your business thrive in a post-COVID environment, please don’t hesitate to contact us.

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