The Covid-19 pandemic has spurred on an incredible amount of change when it comes to online shopping habits and trends, with some suggesting ‘a decade in days’. Far exceeding the predictions for the next 10 years, business and customers alike have had their hands forced into adapting to the new normal.
Data from the Office for National Statistics (ONS) shows that 2020 saw the amount spent through online retail rise 46.1% compared with 2019. Some extraordinary examples of this shift include British supermarket Tesco, which went from 600,000 to 1,500,000 customers per week, increasing its eCommerce revenue from £3.3 billion to £5.5 billion. Astoundingly, teleconferencing business Zoom surged during this period and ended up with a market value of £41 billion ($59 billion) — greater than that of the four largest US airlines combined.
However, some businesses have faced significant losses in the same period. Travel brands, high-street retailers and events businesses have been left behind as travel restrictions and lockdowns come into place. It’s estimated that the events and experiences industry has lost £31 billion in visitor spend, while Europe’s largest travel company — Tui —lost around £2.7 billion during this time.
To understand the changes to online customer shopping behaviour we’ll explore how it’s changed, why it’s changed and what businesses can do to survive the uncertainty.
Why has online shopping behaviour changed?
To analyse this further, we asked UK shoppers about their brand perceptions, customer experience and shifts in shopping habits since the pandemic. Our Feefo Brand Perception Report revealed some key insights and consumer trends that businesses should look out for.
Research by Mckinsey has shown that new behaviours are emerging across eight critical areas as a result of the pandemic. The shift in at-home behaviour affects the products and services that customers are able to access, while a shift in priorities, values and perspective is also key to note, as this alters how people approach online shopping. Here are the eight critical areas outlined in the report:
- Rise of unemployment and furlough
- Less on-the-go consumption
- Remote working
Shopping and consumption
- Increase in eCommerce
- A preference for trusted brands
- Larger baskets, less frequency of shopping
- Shift to local businesses (based on values and convenience)
- An increase in remote learning
- A shift in upskilling or change of career direction
Life at home
- Nesting at home
- More time online
- Consideration of DIY, house upgrades etc.
Communications and information
- A shift in media consumption to online platforms
- Fewer in-person conversations
Play and entertainment
- Additional play time
- Entertainment channels shift
- Lack of in-person events
- Increase in online/virtual events
- Digital entertainment shift
Travel and mobility
- Reductions in tourist spend and retail
- Increase in domestic tourism
Health and wellbeing
- A focus on health and hygiene
- A surge in organic, natural and fresh products
- Fitness on demand and at home
- Pharmacies and virtual doctors
Are the changes in online shopping behaviour here for the long-term?
To analyse this further, we asked UK shoppers about their brand perceptions, customer experience and shifts in shopping habits since the pandemic.
Our Feefo Brand Perception Report revealed that, realistically, many of the lifestyle changes and new habits that we’ve picked up during lockdown are here to stay. In fact, almost half (43%) of those surveyed by Feefo said that after lockdown ends, they’ll do the majority of brand purchases online. Of those asked, only 25% said that they wouldn’t.
We’ve also seen shifts in remote and flexible working. With so many businesses buying in to flexible working, or even ditching offices altogether, we’re unlikely to see staff returning to the workplace full-time. In fact, the BBC asked some of the UK’s biggest employers that very thing — and the response it got was that over 50 of them said they don’t plan to bring staff back full-time in the office.
However, when it comes to travel, retail and domestic tourism, the lockdown travel trends aren’t likely to stick around for the long haul. However, it’s important to acknowledge that new variants, anxiety about safe travel and ever-changing restrictions will leave some hesitant to fly abroad as soon as they’re able, meaning an increase in local and domestic tourism for the short term.
Some of our pandemic habits have led to an enormous acceleration in certain fields. With no real end in sight for Covid-19 global restrictions, and an increase in time spent at home, sectors such as medicine, eCommerce, remote learning platforms and at-home fitness brands are likely to continue to thrive for the foreseeable.
How can businesses respond to the new online shopping trends?
In the UK, almost all (99%) adults and young people aged 16 to 44 years say they are recent internet users. And while this isn’t unique to the younger generations, changes are occurring at the upper end of the demographic. The proportion of recent internet users aged 75 or over has almost doubled — from 29% in 2013 to 54% in 2020. As a result, eCommerce has thrived. However, the rise in competition has led to a reduction in brand loyalty for many and, unfortunately, some of the brands that weren’t as quick or as successful in adopting an online presence or digital experience quickly faltered.
John Galpin, Co-Founder of Design by Structure notes: “Online has seen exponential growth driven by the pandemic and lockdown which has accelerated online purchasing behaviours. Those retailers who didn’t adapt quickly have suffered, even the big brands such as Arcadia.”
This shows that it’s more important than ever important for brands to embrace (and to prioritise) their digital experience and their customer experience (CX) to stay competitive online.
Redefine the customer experience
Commenting on the importance of prioritising your CX as a business, Jonathan Emmins, Founder of Amplify says: "It was already a challenging time for retail pre-pandemic. Whether through choice or necessity, the past 12-plus months have pushed brands to be creatively brave and innovative, producing rich yet seamless, omnichannel retail experiences. To be successful, brands need to take into account the entire customer journey: before, during and after purchas. The trick is for retailers to identify how best to use what's in their armoury to deliver that customer experience…and ultimately sales.”
Creating a customer journey map is a great place to start to understand your customer experience. Analyse all of your customer’s touchpoints with your business and use it to build a comprehensive picture of how their brand perceptions are formed.
As Damien Fisher, Managing Director of Fishtank Agency points out: “The digital experience is scrutinised more than ever before, and depending on the sector, various touchpoints require consideration.”
When creating a customer journey map, don’t forget to include any touchpoints where customers self-serve and aren’t in direct contact with a representative of your business. These include:
- Online advertising including images and copy.
- Your online presence — review websites, company social media presence and third-party listings.
- The look and feel of your website — does this reinforce their expectations/view of your business?
- The experience with your website, such as finding information, ease of use and ease of converting — include lead generation, newsletter subscriptions and purchases.
Once you have your map, take a look at the customer experience at each point — this may help you to identify both areas for improvement and areas that aren’t aligning with your brand, the latter of which can be off-putting to customers and may mean you lose them from your funnel. Remember that even with the best plan in the world, your customers may have a different experience using your brand. Ultimately, it’s their perception of your business that matters.
On this note, John Galpin, Co-Founder of Design by Structure, says: “Customer perception is based on the customers’ own experiences of a brand, how it aligns with their own beliefs and values, their interaction with it at every touchpoint, from the awareness, through to purchase-decision to having it in their home.
“Brands don’t hold the reins completely. Consumers hold power in their ability to vote with their feet. If they don’t like what a brand does, represents or aligns with (influencers/ambassadors) they simply won’t purchase, or more importantly repeat purchase — that’s real power.”
Meet the needs of the new customer
As part of your sales funnel, you’ll be aware that there is often a consideration or research stage for online shoppers. Brands can tackle this by working on their CX strategy, and considering any external factors that might influence search-engine-savvy customers.
Our Brand Perception Report showed that online reviews are the top influencer when it comes to making purchasing decisions about a product/service online (55%). Interestingly, 38% of consumers said their decisions were influenced by website and digital experience. Alarmingly, 41% of consumers mentioned that their online shopping experiences were often inconsistent. This is a significant percentage of customers that could be lost without the consistent and comprehensive implementation of a CX strategy.
The new shifts in online shopping trends have bought with them a large increase in customer expectations. With big brands leading the way in customer service, smaller brands have struggled to keep up with the demands of the customer. As well as a distinctive rise in live chat, 21% of consumers value brands more if they offer customer service via their social media platforms.
Other reported brand turn-offs include:
- Slow response to inquiries (29%)
- Spam email marketing (29%)
- Annoying advertising (23%)
Damien Fisher, Managing Director at Fishtank Agency notes: “When selling online, everyone is time-sensitive and with cyber-crime at an all-time high, visible trust recognition indicator such as Feefo are key validators to consumer perception and loyalty. Having chatbots visible 24/7 to answer any consumer queries without moving from page to page, as well as trigger points such as email/sales numbers, helps deliver buyer confidence as it suggests the online retailer is happy to take calls and values customer satisfaction.”
Another ‘new’ customer expectation that’s set to increase is a shift in customer values: with a renewed focus on sustainability, responsible sourcing and reducing the impact on the environment. Our findings showed that 57% of consumers think that companies should be socially and environmentally responsible, while almost three-quarters (74%) of consumers always consider a brand’s values before purchasing from them.
This is a key opportunity for businesses to review their operations and practises, as well as their communications strategy around their brand values, mission and purpose. Those that don’t do this could be missing out on a significant amount of revenue — with our research showing that 61% of consumers spend more money with socially responsible brands. This is critical for long-term business success, as our findings also revealed that if disappointed by a company's words or actions on a social or political issue, 74% would be less likely to purchase from that brand.
Other significant factors that consumers take into account when making online shopping decisions include:
- Brands being passionate about the products or services they sell (34%)
- Sustainability ethics (33%)
- Transparency (33%)
To tackle this properly, Vic Heyward, Brand Marketing and Communications Manager at Bright makes a suggestion for brands: “This newer focus on brand accountability for sustainable initiatives can feel daunting for some, especially if you're not at the forefront of an environmental revolution. For brands like this, taking a step back to reflect on your brand purpose, code of ethics or CSR policy can be an enlightening experience and a way to further engage prospects and employees.”
To stand out from the competition during the pandemic and beyond, it’s important for brands to keep on top of their digital experiences, consumer trends and customer expectations.
The results from our Feefo Brand Perception Report 2021 have shown the importance of putting the needs of the customer first. After all, shoppers are more likely to vote with their ‘feet’ (and their money!) than ever before. With much of the new online shopping behaviour set to last for the long-haul, happy online customers are truly the key to long-term success.
Commenting on the findings of the Brand Perception Report, Feefo CEO Tony Wheble, says: “It’s been an incredibly volatile 12 months for businesses, which has seen a seismic shift in consumer behaviour, some aspects of which will have a long-lasting effect on how buyers think, act and spend. That said, our research shows that for those businesses that are agile and realign their marketing strategies, there are many opportunities to improve brand awareness, perception and loyalty. Those that respond and act with the medium to long term in mind will see greater returns over the next few years than those that see this period as nothing more than a dip, due to external circumstances.”