Many retailers are dependent on their online shoppers. And some store-based retailers rely on foot traffic they’re no longer receiving. At Digital Commerce 360, in conjunction with Bizrate Insights, we wanted to explore how shoppers are behaving in this new normal. Timing is everything, however, this research was completed the week of March 16. Of course, this situation is constantly changing and shut-in shopper behavior is fluid.
I’m not feeling much like shopping beyond household items. A new work-from-home outfit or an enticement from a teen-focused retailer to make a purchase for my daughter, who is binging Netflix, have gone by the wayside as coronavirus has trapped us at home.
While 20% of online shoppers surveyed have placed a few more orders online, 69% of online shoppers report that their online ordering has not changed due to the coronavirus. It’s too early to tell if ecommerce sales will grow significantly beyond shoppers’ initial needs, especially given financial concerns and a lack of interest in non-essential purchases.
We can do our part moving beyond toilet paper and disinfectant. 66% of online shoppers have purchased an array of categories online. Shoppers focus their spending on critical needs while also addressing home goods, given shelter at home directives. The following categories are being purchased in at least double digits: food/drug (39%), disease-prevention products (24%), home goods (21%), apparel/accessories (13%) and books/music/video/software (11%).
56% of online shoppers do not anticipate experiencing shortages while under quarantine, which include states like New York, California and my home state of Illinois. Online shoppers continue to experience in-store and online shortages with certain household supplies. Products seen as potentially unavailable during quarantine included household supplies (32%), disinfectant (26%), cleaning products (24%) and food (21%). Retailers should share messages with their shoppers regarding out-of-stocks, as well as limit quantities for purchase on a per-customer basis as many seem to be doing in physical stores.
Online shoppers are placing more orders online, although shipment delays can be expected. Logistics are challenging, causing retailers to move beyond standard options. Under these circumstances, communication will be critical to keep online shoppers in the loop on order status.
Store and delivery activities during COVID-19 find that 23% of online shoppers have seen delays in online order shipments. At the same time, online orders placed due to out-of-stocks in physical stores was a factor for 18% of those surveyed. Messaging from the government, along with visits to the store that find items in stock within a few days, may be keeping online purchasing at bay. This will be an area to watch over time.
Purchasing has declined across channels and out-of-stocks are interrupting the typical shopping journey. Shoppers are delaying online ordering, and this can have severe implications on our economy and the retailers we enjoy buying from. 24% of online shoppers like me have delayed purchases due to finances. 37% of respondents spotted an increase in out-of-stocks online. Retailers must address out-of-stocks early in the customer experience as their frequency and subsequent frustration is increasing and problematic. Online shoppers continue to be price sensitive so product prices and shipping charges should see little or no increase during these unprecedented times. Increased research prior to purchasing (22%), particularly given the time shoppers now have, means shoppers can quickly assess a retailer’s pricing strategy.
Retailers are ready
The good news to report is that more than half of online shoppers rate online retailer performance an 8 or higher during the coronavirus. Challenges with stock status and delivery issues are likely causing retailer performance ratings to dip below their usual high levels. Online retailer performance (1-10 where 10 is best) breaks out as follows:
- 8+: 56%
- 6-7: 21%
- 5: 17%
- Below 5: 6%
Be smart about pricing particularly free shipping
Despite current circumstances, 54% of shoppers aren’t willing to pay more for shipping when purchasing online versus in-store. Only 16% of online shoppers are willing to pay more for shipping of online orders. Retailers need to be conscious of pricing, particularly as personal finances are in peril, especially knowing that “free shipping” is favored among online shoppers. Further store closures and business dynamics may limit shopper ability to secure free shipping. Online shoppers will be on the hunt for deals and in particular, free shipping.
Creatively message to spur shopping
Retailer communication around the coronavirus is losing its impact. Almost all retailers have sent out public service announcements and when asked, “What do you think about the proactive messaging you are receiving from retailers?” 43% indicate they all sound the same. 35%, however, find them comforting. Retailers will need to make choices about how they message shoppers balancing the coronavirus information and more standard marketing offers going forward.
While it’s difficult to see the positive during these trying times, the human spirit prevails. Many shoppers may respond when retailers have a sense of humor. Three email headlines caught my attention recently including:
- Anthropologie: WFH? Wear these, now 40%
- Madewell: In case you want to change into Jeans
- Uncommon Goods: Class is cancelled: Get a Kit
Offer shoppers alternatives to store visits
Curbside pickup is one example of how retailers are creatively making products available to shoppers. Many parents are challenged to keep their kids busy, and arts and crafts are a comforting, creative alternative to kids playing with something on a screen. Last week, I tested both Joann’s and Michaels’ curbside options and both yielded positive results. As retailers known for coupons and discounting, they wisely extended them to bolster usage among their shoppers.
Expectations around future online shopping behavior are in flux with current expectations unclear. It is simply too early to tell what behavior might be under this fluid situation. Projected online shopping behavior change is as follows:
- No change in shopping behavior: 33%
- Place somewhat more orders: 27%
- Place about the same number of orders: 25%
- Place significantly more orders: 10%
- Place a few orders: 5%