Measuring customer behavior post-lockdown with shopper insights

The pandemic is not fully over for much of the world, but we are able to get a sense of what the "new normal" could look like

In terms of customer trends, during the second quarter of 2020, what would usually take months, years or decades to evolve took only days and weeks. And retail has struggled to adapt and accommodate those sudden shifts. Now, as we strive to navigate a “post-lockdown” world, we have to wonder: what is the new customer? What do they want and how do they want it? What trends stuck and what didn’t? What kind of shopping habits are going to make up the “new norm”?

In this post, I’m going to share some research and insights from aggregated data from European retailers. During stock-up and lock-down phases, we saw similar trends across the globe in terms of customers purchasing similar items and with similar behaviors. I would say, in post-lockdown phase, we cannot say what we see here is what we will see globally, but it gives us an idea of what can stick and what won’t stick long-term.

Examining pre, during and post-lockdown behavior

Sales trends: basket size remains high as frequency and number of households normalize

Overall, we saw reasonable sales growth pre-COVID. During the lock-down, grocery sales remained strong through the shift from larger format stores like hypermarkets, to smaller and local stores and a massive increase in Click & Collect service, allowing people to shop closer to home and avoid human interaction as much as possible.

However, what is impressive is what happened in the post-lockdown phase. I would venture to call it a kind of euphoria really – especially in the first six weeks post-lockdown. What we saw was sales growth upwards of 20% every week for almost six weeks. And that was only grocery, they saw even more in terms of non-food sales.

One of the most interesting, almost strange, trends that we saw had to do with the number of shoppers vs basket size. During lockdown, the number of items per basket grew almost 40%, which is incredible. At the same time, there was loss of customers that should have been alarming. Further, of course, frequency of visits was also down. However, even though there were fewer customers making fewer visits, those that were shopping – in-store or online – bought much more when they did.

Now, after eight weeks, the units per visit remains almost 10% higher than before COVID and what we saw last year. Therefore, this means that increased basket size is a trend that remains even post-lockdown.

Post-lockdown also saw the number of customers return to normal levels. This was accomplished by engaging in a lot of personalized and mass-promotion activity to make sure customers were back in-store and online. While frequency and number of households returned, more or less, to a normal level, the average price increased suddenly. Non-food items became very popular as well as beauty products and alcohol, which are typically more expensive than pantry food items, were primary drivers of this average price increase.

60% of customers who changed behavior during lockdown have sustained or changed again

Next, we looked at customers to determine to what extent their behavior changed before, during and then after lockdown.

What we discovered is that nearly 40% of them didn’t really change their behavior during lockdown. By that I mean they maintained more or less the same basket size and frequency of visits as before lockdown. Then, we found that 51%, dramatically changed their behavior in terms of frequency and basket size. The rest did not shop at all during lockdown and most of those were over the age of 60.

We then looked at that half of customers who really changed their behavior and checked to what extent they came back, post-lockdown, to their normal purchase behavior. The results showed:

  • 35% went directly back to the pre-lockdown behavior
  • 60% kept their lockdown behavior in terms of basket size and frequency or changed again
  • A small group became inactive

So, in a nutshell, we’ll say that one-third of customers changed their behavior longer-term, but everything else comes back to normal. And what was important in terms of going back to normal was personalized and mass-promotion as it encouraged people not only to come back, but also to visit more frequently.

One group of particular focus is the elderly. As I mentioned earlier, people over 60 largely didn’t shop as frequently or shop at all during lockdown, and they are still reluctant to return frequently post lockdown. The 40 – 60 age group has increased frequency the fastest, but the elderly, if they come back, are still not comfortable and are keeping their frequency low.

Customer demand trends post lockdown

We now want to review some of the items that were most in demand during lockdown and what part of that remains post-lockdown.

One of the main trends during lockdown was cooking at home. However, in our post-lockdown analysis, we find that home cooking habits have completely disappeared. Maybe this is because people were forced to do it, not because they liked it. Or because, during lockdown, they were stuck at home without options like restaurants and now they have those options again. Whatever the individual reasons, it’s interesting to see how fast the trend disappeared.

On the other hand, one trend that stayed and even accelerated is the demand for alcohol products. Alcohol demand was already very, very strong during lockdown and it even accelerated post lockdown. The focus on healthy products, which was quite important during lockdown, remains important. So, concerns around health and safety have certainly made people more health-conscious than they were before.

Another issue of great focus during lockdown was the occurrence of out of stocks. While we don’t have any direct data that addresses these changes, we have had feedback from store owners. What we’ve heard from them is that, during lockdown, customers were fine. If products were out of stock, they understood, they switched to different products, they bought what was available. Anything was better than nothing. However, immediately after lockdown, the feedback we received was that customers are much less compromising, and expectations returned to their normal, high level.

Click & Collect: A recent necessity remains strong

When we look at channels and store formats, Click & Collect, no surprise, was outstanding during lockdown.

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Increases in customers using Click & Collect remains a key contributor to growth

This is the trend we see so far. In green, we see growth from number of households and, in orange, increased visits per household. As we see, post-lockdown, there are more customers shopping online than pre-COVD and they are also shopping more frequently, and this continues post-lockdown.

What is important is that we saw three times more customers during lockdown versus the same period last year.

If we look at the contribution of each channel post-lockdown, we see that stores are coming back but Click & Collect remains very strong with more than 40% sales growth. So, the combination of both, working together, is creating an acceleration in growth.

So, how many new online customers are still shopping online, post-lockdown? It’s 45%.

In short, this means that almost one customer out of two, who were new online during lockdown, remained online after and there is also evidence that some customers have even switched to online as their preferred channel for groceries.

When we look at the customers who use Click & Collect as their preferred channel, they have a specific profile. They are much more choice-sensitive, premium shoppers and were more difficult to attract to the online channel previously. Why? Because those like to buy fresh and go select meats and produce, and that’s something that they were reluctant to do online. But, during lockdown, they tried it and they liked it. So, it’s an interesting story: if you have the right quality in terms of fresh, you can retain those customers online, even if it’s not necessarily the channel they would have tried by themselves.

Conversely, many retailers also have a hard time engaging more price-sensitive customers in online shopping. If they don’t have private label or entry price products online, they’re cutting out those that have a high preferred item score. Those are very important products for some specific customers. If you don’t have them in your assortment, you’re losing the customer. Making sure you have the right online assortment, quality and level of service remain key for retailers to win in the post-lockdown phase.

Putting it all together

What we’ve learned

In summary, what we see as longer-term trends:

  • Increased basket size remains as well as the need for one-stop shopping
  • Elderly shoppers are back in the stores but are still reluctant to return frequently
  • Personalized and mass-promotion is key to driving traffic and increasing frequency
  • Fresh, healthy products are still very important after lockdown
  • Online growth remains very strong

Customers want to be able to get everything they need at once without having to look elsewhere or spend more time than needed shopping. If you’re not there, if you don’t have the right presence, the right assortment and the right products available, you’re going to struggle more than even before COVID.

What should retailers and CPGs do from here?

  • Encourage the basket size through assortment and promotion such as healthy products and non-food offers
  • Ensure that you are offering the right assortment and services to the elderly because they are the slowest to return with frequency
  • Retain customers across all channels by making sure that you have the right online assortment and the ability to fulfill all those customers’ needs longer-term

I think the interesting thing is going to be what trends flatten out and what continues. Even with lockdowns being re-embraced in some areas of the world, everyone is still interested in people’s habits from a long-term perspective. But, from what we’re seeing so far, it appears people’s habits are changing permanently.

I think it will be an interesting survey of ourselves – how our shopping habits have changed – because we are a cross-mix of people across the world and very diverse markets. So, it will be interesting to understand, as a group, how we have and continue to change our shopping habits.

Learn more about the key factors that retailers need to successfully meet omnichannel shoppers’ needs in the viewpoint paper, Omnichannel Imperative: Meeting the need of a new consumer.

 

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