When I first set out to write this, the U.S. was a very different place. We are now at a moment that calls to mind the opening lines of Charles Dickens’ A Tale of Two Cities. “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness …”
Clients have begun to ask us what it all means and how to plan for the future. While this may be a very different crisis, history does provide insight into how people have dealt, and can deal, with a dramatic situation such as this health pandemic.
Looking Back to Look Forward
In our How America Shops research we have studied shoppers and retail as they confronted crises from 9/11 to the global economic crisis to recent political, social and economic turmoil. In the last year alone, retail has dealt with trade wars, the opioid crisis and climate issues that wracked communities around the country. So with that context …
Five Things We Can Predict Now … Yes, Already
It may seem a little foolish as we sit in the midst of the COVID-19 pandemic to predict the future, but there are things that are evident, that will stick because they were already ingrained in shoppers’ thinking and shopping culture.
• Online Retail Will Move Into Its Third Wave — Already online shopping has surged, especially for groceries and health products, two categories that had lagged behind. Until now, the vast majority of Americans still purchased these everyday essentials in physical stores. However, in our latest How America Shops research (fielded March 18 to March 20 and April 3 to April 5) over half of our national sample said they had ordered groceries and health products online for delivery or pickup. And, more important, 50% of those did so for the first time.
WSL Prediction: This will stick and become the third growth wave. The first wave was in the 1990s when people bought books, videos, music and travel services online. The 2008 recession drove the second wave. It was a time when eight out of 10 shoppers said it was “important to get the lowest price on most things I buy.” The internet became the go-to place for low prices, and also for greater selection as shoppers looked to trade down to lower-priced brands. Categories like clothing, baby furniture, beauty products and home decor were added to their online shopping list.
Over the next decade, two-thirds of Americans regularly bought a wide range of categories online. However, groceries and health care products were only occasionally on the list for the broader population. But no longer. In our recent research, 43% of households with annual incomes under $50,000 said they purchased groceries and health care products online for the first time, as did 52% with incomes above $100,000.
This raises the issue of how well prepared retailers (and suppliers) that sell these categories are. While most offer online shopping, with some click-and-collect and delivery options, they have not been pushed to the extent they are now to deliver from store to curb or store to home, fast. That’s not only what shoppers expect and need now but will continue to expect in a post-COVID-19 world. Now retail will need to step up, and fast.
• Health and Well-Being Will Become the Driving Growth Force for All Retail — For several years, we’ve noted the growing passion of many to improve their health and well-being. Since 2014 in our research it has been evident that Americans were on a quest to be well, to take stress out of their lives, to eat a little healthier, to find more affordable ways to proactively care for their family’s health, and to care for the health of their communities and the environment at large.
All this is dramatically heightened by COVID-19. It was important to people before this. It will be priority No. 1 as we emerge. We already see it in our research results: 28% say they are eating healthier more than before the crisis; 28% are taking more vitamins and supplements now; 30% are exercising more at home now; 40% are findings ways to be calm more now.
WSL Prediction: Consumers’ drive to take control of their own health and well-being will grow significantly. This is where they will choose to spend their money as the crisis wanes. Categories, services, technologies and retail will know no boundaries. We will also see the next big wave of sustainable practices, and local manufacturing will be reborn.
• “Caring” Will Become the Critical KPI for Retailers and Brands — This was made clear in 2018 when we created our WSL Caring Score to measure how consumers felt the stores they shopped cared about their health and wellness. Now that Caring Score is being put to the test in ways never predicted.
In 2018, the highest score was 54 out of 100. Of the 13 retailers we tested, almost all scored under 50, including chain drug stores. The score measured how shoppers rated retailers on nine attributes, from “helps me keep my family healthy” to “cares about the community.”
We are already seeing this playing out in our new How America Shops research. When we asked, “Who do you think is showing they care about people during in the COVID-19 crisis?” at the top of the list of those who “care a lot” were medical professionals and public service workers (60%), followed by family and friends (55%), employers (53%) and the local pharmacist (50%). At retail, one-half said supermarkets and drug stores care a lot, two-fifths said mass merchants and one-third said online retailers.
WSL Prediction: While shoppers may respond to acts of generosity with pleasant surprise today, those reactions are transitioning rapidly to expectations. By tomorrow, retailers and brands that are not putting their workers and shoppers before profit will be viewed as the bad guys.
• Social Media Will Save Us All … Really — In 2018, one-in-four people told us that in order to maintain good health they wanted to reduce the time they spent on social media. However, as we move through this crisis, we are already finding that social media and digital connectivity have actually become life savers. Already they helped us stay connected to family and friends; enabled us to get answers to questions from experts on everything from virus symptoms and testing locations to how to color hair, do a manicure, exercise at home and figure out what to cook for dinner; and helped us remotely educate children and even find something to laugh at.
WSL Prediction: By the time the crisis is over, many will be grateful for the connection social media has enabled. Retailers and manufacturers will recognize its power to connect with shoppers in meaningful ways — beyond coupons and sales. The urgency to deliver relevant personalized messaging will grow.
• Economic Challenges Remain for the Long Haul — Already in our How America Shops research we see financial insecurity and pessimism growing. In November 2019, seven out of 10 people said they felt financially secure or optimistic. Five months later, that number has declined by 10 percentage points, with 40% of the population now pessimistic about their financial future. That number will only grow over the coming weeks and months.
WSL Prediction: We know that financial insecurity and pessimism will continue to grow. What we also know is, based on our crisis reporting in 2008, how shoppers reacted. Shoppers traded down brands and retailers, used up what they had from beauty to clothes, cut back on categories and services. It took a long time for them to bounce back. And when they did, they had different values. They moved from accumulating “stuff” to wanting to “buy happiness.” That quest for happiness and well-being was ingrained before this crisis. And it will be the guiding principle as we move out of it.
We already know that Shopping Life will change. We know those in health care — retailers, manufacturers and service companies — are more critical to Americans than ever before. This is a moment not to be squandered. It is a moment to show you care, and how you care, for your employees, your customers and the community. It’s an opportunity to turn “the worst of times” into the “best of times.”
Wendy Liebmann is chief executive officer and chief shopper of WSL Strategic Retail, a New York-based consultancy that helps global clients anticipate and build the future through a shopper-centric lens.