Tanya Long, COO Argility Technology Group

Lockdown leads to long-term retail trend changes

Tanya Long, COO Argility Technology Group

By Tanya Long, chief operating officer, Argility Technology Group

As people embrace technology more than ever before to support all aspects and consequences of isolation, there are bound to be new buying behaviours.

I’m sure you would agree that the ‘new normal’ is now so clichéd, I think we are all tired of hearing about it. But certainly, there are new buying behaviours being observed, and of course, strong indications that while people are afraid of getting sick, they are more fearful for their economic stability and future.

Research variously indicates that priorities, certainly at the beginning of the pandemic, centred on basic needs, sending demand for hygiene, cleaning and staple products through the roof. On the other hand, as lockdown continued and people were confined to their homes, there was an increase in searches for luxury, non-essential items or attempts to at least think about planning a travel for leisure trip, showing that people are increasingly in need of a means by which to spoil themselves.

Apparently, the factors that influence brand decisions are also changing, with a penchant for home-grown products being seen to escalate. One trend that is very likely to continue post-pandemic is the move to digital commerce for grocery shopping.

People are said to be embracing technology more than ever to support all aspects and consequences of isolation. The ways in which people spend their leisure time are changing with related social distancing measures, and again, these habits are likely to be sustained.

Surveys indicate that 61% plan to continue watching news channels post-COVID-19, with 55% prioritising family time. Entertainment, learning and DIY are also said to have risen. These trends are reflected in the types of apps that consumers are downloading, related to entertainment, news, healthcare and education.

Essentially, technology is playing a major role in how these interactions occur. Consumer packaged goods companies are urged to increase their focus on digital over traditional tools if they are to engage with consumers and improve experiences.

Calculating what kind of consumer is emerging from the current scenario may well become the difference between survival and growth, or closure.

The EY Future Consumer Index on behaviour across five key markets shows how the pandemic is creating new consumer segments.

While it is acknowledged that the global consumer was already evolving at speed pre-COVID-19, the process now appears to have become exponential. Calculating what kind of consumer is emerging from the current scenario may well become the difference between survival and growth, or closure.

It is emerging that there are key issues for retailers to consider if they are to remain competitive.

The EY index advises retailers to invest greater effort in distributing personalised content that engages potential customers and offers information that attracts their attention. Investment in better online and in-store experiences that address consumers’ interests are also recommended. E-commerce offers the potential to attract recurring purchases, as do well-structured loyalty programmes.

The EY report identifies four segments of consumer behaviour as follows:

  • Save and stockpile – 35% of those surveyed
  • Cut deep – 27%
  • Stay calm, carry on – 26%
  • Hibernate and spend – only 11%

Consumers in this last category − hibernate and spend – are said to be mostly aged 18-44 and are the ones identified to be most concerned about the impact of the pandemic. But only 40% of them say they are shopping less frequently.

While 42% say the products they buy have changed significantly, 46% say brands are now more important to them. However, it is well-established that brands need to realign with these changes in consumer spending behaviour.

The ones who deliver seamless authentic solutions and excellent customer experiences will undoubtedly emerge winners in a crowded marketplace.

What’s happening in SA?

Retail is the third-largest sector of our economy and is a labour-intensive industry in South Africa.

Statistics SA data shows the last time quarterly retail sales grew more than 3% was in the first three months of 2018, with consumer confidence slumping deep into negative territory in the third quarter of 2019 and consumer inflation at a 10-year low – this is all pre-COVID-19, of course.

An Investec report highlights the sectors of South African industry that have been hardest hit by closures and lockdown restrictions. Obviously, the restaurant industry and hospitality generally are the hardest hit.

In terms of retailers that will emerge relatively unscathed, the food sector is cited to be fairly untouched, with drug and pharmacy retailers being in pretty much the same position. Both are said to have retained a dynamic market share.

Of course, job losses appear to be an inevitable outcome of lockdown strategies, which in turn has a ripple effect as the fewer the jobs, the less the spending power and the more the damage to the economy.

However, as has been stated in the foregoing, the smart retailer that invests in targeted marketing will emerge triumphant. But to do that it will need to acquire the right technology that can take data and turn it into business advantage and get the retailer closer to the customer.

This is where data analytics has a major role to play. It is about extracting trends and patterns and using those insights to make better decisions and influence future outcomes, which ultimately leads to the ability to understand changing behaviours and satisfy new consumer demands.

Source: IT Web

Tanya Long, COO Argility Technology Group

Tanya Long, COO Argility Technology Group

Tanya Long, chief operating officer, Argility Technology Group.
Long has 30 years of industry experience. Her career in the IT sector started in 1988 in IT support for point-of-sale solutions. She moved formally into software development with UCS/Argility in 1989 as a developer and progressed through to team leader, account management, project and development management roles, which led her into various industries and corporations.

In 2017, Long returned to Argility (having previously worked at the company in a technical capacity) as human capital executive, where she reunited her retail, IT, leadership and HR knowledge to drive her zeal for transformation.

In her capacity as COO, Long is responsible for overseeing operations, with a specific focus on human capital, sales and marketing, and ensuring the company culture and vision shows up daily for customers through an engaged technical team of experts.

Tanya Long, COO Argility Technology Group

Changing behaviours post-COVID-19: A retail challenge

By Tanya Long, Chief Operating Officer, Argility Technology Group

The virus is reshaping the consumer goods industry in real-time, rapidly accelerating long-term underlying trends in the space of mere weeks and months.

Let me begin by saying that like many of you, I’m feeling a tad COVID’d out. The retail sector must be so tired of reading about what to do to survive COVID-19: go online, be more diverse, etc.

What has struck me in the past three to four weeks is the need to endorse a spirit of hope. I feel many of us are tired of looking to essentials and are seeking to look to the future for ways to spoil ourselves – maybe poring over travel brochures, or splurges on non-essential leisure goods as opposed to necessities.

It is just five months since the World Health Organisation declared the COVID-19 outbreak a global pandemic, which in turn has impacted every country on earth and hailed an era of uncertainty on both the economic and social fronts.

The retail and hospitality sectors took the brunt of the initial shutdowns. The retail sector has always been one of the biggest barometers of change – due to the adapt, or die, competitive aspect of this arena.

The closure of many brick-and-mortar outlets in favour of online offerings is just one example of how consumer purchasing patterns are changing the entire fabric of the industry. Therefore, retail has always had to evolve and to do it rapidly.

Consumer behaviour has changed dramatically, posing challenges for retailers that need to keep pace with the change or risk loss of trade and/or customer loyalty simply because they have not anticipated or made hasty preparations to satisfy new consumer demands.

I decided to do some homework and see what research surveys are revealing on this topic.

Research by Bazaarvoice − which boasts a network of over 6 200 brand and retail sites as its client base − reveals high demand for leisure goods during lockdown and not just basic necessities. It analysed different patterns and changes in behaviour, from increases and decreases in product page views, to orders placed, reviews submitted and questions asked. It reviewed this data globally across more than 20 product categories and compared it to the same period in 2019, as well as the earlier months in 2020.

People are responding in a variety of ways that are being manifested in behaviours and purchasing patterns, as they attempt to get to grips with a new normal.

Results reveal how people were shopping in March 2020 at the beginning of the lockdown and showed that customers started to really embrace online shopping, setting themselves up for what appeared to hail a long period spent at home.

The statistics showed a 21% increase in online orders in March 2020 versus March 2019, and in a survey conducted with over 3 000 members of the Influenster community, 41% of respondents said they were currently shopping online for things they would normally shop for in-store.

This would seem to confirm we are having to change our normal shopping habits and look to purchase more items online than normal. A comparison between March 2020 and the same period in 2019 saw a 25% increase in page views. This is said to be possibly because consumers must now search for new products because they are housebound. It is also possible they are purchasing brands they are not familiar with due to anticipated limited product availability.

An Accenture report notes COVID-19 will permanently change consumer behaviour, attitudes and purchasing habits, and predicts many of these new ways will remain even in post-pandemic times.

This survey reports that while purchases are currently centred on the most basic needs, people are shopping more consciously, embracing digital commerce and buying local. This latter trend, if reflected in the South African market, could be good for business here.

The report also notes that to manage isolation, consumers are using digital to connect, learn and play, and anticipates they will continue to do so.

One pattern reportedly being endorsed across the globe is the move to a virtual workforce as more people work from home and are enjoying doing so.

Consumers view products through changed eyes

So, in so far as we are all now living differently, buying differently and in many ways thinking differently – the pandemic’s economic and social impacts have been immense. Patterns include supply chain disruption and retailers closing their physical doors only to strengthen their online presence.

The virus is said to be reshaping the consumer goods industry in real-time, rapidly accelerating long-term underlying trends in the space of mere weeks and months. Accenture research is indicating that new habits formed now will endure beyond the crisis, permanently changing what we value, how and where we shop, and how we live and work.

Perhaps the next question in the evolution of retail specifically is for the sector to determine what consumer goods businesses should offer if they are to be prepared for what comes next.

Fear certainly fuelled the initial panic buying of staple goods – hence the shortages of items like toilet paper that ended up leading the social media memes.

Obviously, consumers are deeply concerned about the impact of COVID-19, from all perspectives, be it health, economic, continued availability of necessity goods, etc.

People are responding in a variety of ways that are being manifested in behaviours and purchasing patterns, as they attempt to get to grips with a new normal.

It is likely there will be a greater reliance on retail technologies incorporating artificial intelligence and machine learning capabilities, becoming the order of the day as companies attempt to familiarise themselves with their consumers’ reactions and develop personalised strategies to cope and retain the trade.

Albeit the days of one size fits all marketing have long been over – the need for strategies that reach out and capture the attention of this new complex consumer is now greater than ever.

* In my second Industry Insight in this series of two, I will have a look at what may be new and everlasting shopping habits.

Source: IT Web