The potential rise of ‘diversification’ in consumer shopping habits

After an extended period in lockdown one of the impacts of the Covid-19 pandemic has been a marked shift in the nation’s shopping habits. As it’s been widely reported, more people than ever are shopping online, with recent data from analytics company Nielsen finding that 600,000 households tried online shopping for the first time in the first weeks of lockdown. The beginning of lockdown saw major supermarkets struggling with demand for online delivery slots, and trying to deal with a host of technical issues, as people scrambled to do their weekly shopping online. In the face of social distancing rules, business closures and product shortages, consumers have had to look for alternative places to shop, changing the products they buy and the way in which they buy them. Could these changes lead to a rise in consumers ‘diversifying’ where they spend, permanently?

There has been a significant uptick in people spending with their local vendors, evidenced by recent research from finder.com, reporting that 41% of Britons have been shopping at their local stores more frequently since the start of the pandemic. Consumers have been driven to support small businesses and sole traders in their area, ordering everything from fruit and veg to wine. This shift in consumer behaviours has seen independent shops, cafes and restaurants having to adapt to create a ‘new normal’ – embracing online ordering systems (perhaps where they hadn’t before). Frustrated with the high demand and frequently difficult process of ordering via bigger retailers during the crisis, consumers may be developing a preference for these smaller online retailers; this is particularly true when they can access specialist products and luxuries.

However, how likely are consumers to maintain this new way of shopping? Independents may offer fresher produce or artisan products, but these essentials come at a premium when compared with supermarket prices. This is a debate that predates Coronavirus, with consumers weighing up the value of independent shops and suppliers when compared to the relative ease and cost effectiveness of larger retailers. The only difference is, rather than playing out on our high streets, this is a war now being waged online.

People have also been trying other alternatives to supermarkets. Out of necessity, people have been driven to try other new ways of getting their food – as evidenced by the rising demand for meal subscription boxes such as Gousto and Hello Fresh, with both recently announcing they are looking to hire hundreds of new staff following the virus outbreak.

While people might have enjoyed the relative novelty of shopping independently or using meal subscription services, the question remains if this is sustainable, particularly with an economic downturn looming? As an immediate reaction to lockdown conditions people have prioritised spending on essentials, as they have seen other expenses such as travel and entertainment decrease, but this will change as we begin to phase back into some semblance of a life lived outside the home.  It’s likely this, coupled with households starting to feel the pinch of the broader market downturn, will lead families to seek out bargains once again.

Retailers and services that have seen an uplift in customers due to lockdown must deliver on retaining this business in a post-pandemic world, particularly smaller businesses who may have needed this nudge online to finally compete at a local level. They need to leverage the goodwill and customer loyalty, so it remains front of mind for their new customers even when their day-to-day life changes once again; if not, people are likely to return to familiar and more convenient habits.

Business development director, Webloyalty, Richard Piper

FeaturesNewsOp-ed

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