Shopping Online and One-Stop Shopping: Trends From the Fallout of COVID-19

Oct 19, 2020

As the pandemic took hold around the world earlier this spring, the grocery industry saw a shift in consumer behavior the likes of which had not been seen since the end of the Great Depression. Almost overnight, quarantines and restrictions were put into place, restaurants closed, and our world shifted. In the days and weeks that followed we saw shopper behaviors change radically. Panic buyers stocking up on essentials like hand sanitizer and toilet paper eventually became amateur chefs scouring their grocers’ shelves for inspiration and ingredients to put food on the table three times a day. Through it all, grocers—especially local independents—were given the gift of increased sales.

And while it’s true that the average basket dipped a bit during the summer months, the upcoming winter will bring more restaurant closures as COVID cases rise again and Americans hunker down inside. Now it’s up to retailers to win the continued loyalty of their shoppers this winter and beyond, and understanding the shopper trends of the last eight months is a great way to start. 

The life-changing shifts in human behavior as a result of the pandemic have accelerated underlying shopper trends rather than created new ones, according to Jack Dericks, senior manager of consumer and market insights for Unilever. Since Unilever products are in virtually every category, their shopper data reflects the overall trends in every department. Retailers can use this data and these tips from Dericks to better cater their assortments, merchandising, and advertising to consumers this fall and winter to continue earning shopper loyalty and boost basket size.

For instance, ingredient transparency, green labels and sustainable products, which were big going into 2020, are all still going strong, according to research from Unilever. But what’s most important is making sure your customers feel safe--especially as COVID cases rise. “First and foremost, all of our research shows shoppers want to have a safe environment,” Dericks says. That includes visible signs of sanitation and people wearing masks. “It's just that that visual makes shoppers feel comfortable to return to your store.” 

Dericks recently spoke with IGA's Heidi Huff, senior director of Red Oval partnerships, about shopper behavior in many categories, offering insight for retailers to grow sales while meeting shopper needs. For tips on how to shore up your own shelves and make sure you keep a strong connection with your customers, watch the video below or keep reading for Dericks' ideas on how to pivot in 2020. 

 

Two Kinds of Customers 

As mentioned, grocery sales are high because of a variety of reasons related to the pandemic: restaurant sales have been interrupted, vacations are limited, and people are spending more on creature comforts. That’s a trend that’s going to continue to grow: In the second quarter of this year, in-home meals were up between 8 and 13 percent. 

“Since Americans generally make 80 percent of their meals at home, that’s a lot of meals,” says Dericks.

Unilever behavior data-474w

IGA retailers can expect those sales numbers to continue, but as federal benefits dry up and economic uncertainty continues, cash-strapped shoppers will be shopping on a stricter budget, and value-conscious shoppers will be looking for the best deal. Retailers should adjust their assortments accordingly.

“What we'd recommend is you take a look at the middle—make sure you have low-end products at the opening price point,” says Dericks. “There are definitely going to be shoppers on a budget and on a cash-based budget, which means they only have so much money to outlay each week. So they'll need those low price points.” 

For shoppers looking for value over a low price, offer stock-up-and-save promotions and share digital coupons on your social media channels. “You want larger sizes...because that will appeal to them,” Dericks elaborates. 

Retailer tips:

  1. If you haven't already, sign up for the new National Digital Ad 2.0, which uses rich media, geotarget advertising, and pandemic-focused shopper content to draw shoppers to both your national and local offers. 
  2. For shoppers short on cash and time, offer pre-made and easy-to-make meals that are both affordable and make people’s lives easier. 
Gas on the eCommerce Fire 

eCommerce was basically on fire before COVID-19, Dericks says, and now it’s like someone threw gasoline on that fire. 

  • eCommerce non-edible share is over 36 percent, up from ~29 percent pre-pandemic and the personal care share is 43 percent, up from ~37 percent
  • Online grocery shopping has gone from $1.2 billion to $6.6 billion, an over 450 percent increase, when comparing May 2020 to Aug 2019
  • 30 million more households ordered online during the same period, rising from just 13 million to 43 million

“That's nearly a quarter of the entire U.S. It’s really astronomical what's happened,” he says. “The sales have grown even faster in dollars. It is truly amazing how much has been done in a short period of time.” 

Older shoppers and people who were hesitant about shopping online before are now all in, and the acceleration that was expected for the next three to five years happened in just a few short months. “Retailers who are watching this: If you're not, you need to get into the eCommerce space right away,” Dericks says.

Retailer tip:

  1. Get started! While the eCommerce wave is clearly well underway, it's not too late for you to get up and running. Check with your wholesaler to see what eCommerce solutions are available to you, or look into IGA's new eCommerce platform, a best-in-class solution designed with Freshop to create a unique eCommerce experience that combines shopper education with online ordering. Learn more about the program and fast, easy onboarding process here. Be sure to join us for the IGA Global Rally Virtual Conference to learn more. 
Sell Solutions in Health and Beauty 

Opportunities for increased sales don't stop with food. Health and beauty is having a moment as well, but its important to review your assortment. 

"As an overarching theme, this whole at-home beauty and, more importantly now, affordable at-home beauty, are solutions that the shopper's looking for,” Dericks says. “It's a good thing to bring some of these products that they're looking for and build out your assortment in these areas.” 

For example, deodorant and hair styling aren't growing as much in COVID, so pivot your assortment to hygiene products like soap, hand sanitizer, and even other household cleaners like dishwashing and laundry detergent. 

“People are washing their hands much, much more frequently,” Dericks says. “They’re also doing some other things like taking more showers or washing dishes more; they’re doing things more in the house.” 

Shoppers need reminders to buy personal care in-store, because they forget they can purchase it at the grocery store. Products that are making a splash include: 

  • Bath additives 
  • Hair color and hair implements 
  • Personal health, immunity boosting products, and vitamins
  • Hand hygiene products like soap for hand washing, hand sanitizer, and hand lotion. ” 

Retailer tips: 

  1. Review your assortment to make sure you're focusing on the products that are moving best during COVID.
  2. Ladder up solutions—don’t just sell products, sell solutions. Create an endcap with health and beauty solutions for shoppers. This approach will help shoppers think of your store as a one-stop-shop.
Sustainable, Natural, and Transparent Trends

Natural and sustainable products are also high on the customer's list right now, whether you're dealing with food or health and beauty. Regardless of the category, Dericks sees three themes that keep products moving: sustainable products, ingredient transparency, and clean labels. 

Sustainable products have grown in market share, owning about 16 percent of the market right now, but if you look at 2015-2019, they generated almost 55 percent of the growth, according to Dericks. Natural products also continue to grow faster than conventional, he says. “That continues to be something that folks are demanding and they want to see—not just around natural foods but also their own personal health.” 

Popular items include immunity boosting products like vitamins, because people are trying to take proactive care of their health, and sustainable products, which held and even grew slightly from that 16 percent market share.

“There’s kind of a dynamic between natural and clean labels and health and wellness,” he says. “Throughout the pandemic, we still see that it's not like folks are abandoning their values or the health aspect of our planet. These are important things.” 

Shoppers also want clear-cut descriptions of what they’re buying, what they’re putting in and on their bodies, and what chemicals they’re using around their house. 

Retailer tips:

  1. Keep your health and wellness department stocked with natural, sustainable products to cater to shopper interest. 
  2. Single out local products with Local Equals Fresh signage to support local makers and provide ingredient transparency for shoppers. 
  3. Continue offering recycling services, like plastic bag drop-off, as shoppers still care about the environment.
Final Tip: Keep Up on Advertising 

Statistically companies that maintain their advertising and marketing efforts during a recession actually win overall, Dericks says. Big chains aren’t that nimble; it’s regional chains that are able to remain relevant during recessions, like switching quickly to a sign-of-the-times niche like hand hygiene.

“You want to make sure you're offering different products and assortments for today's shopper, who may be using deodorant less but using more hand sanitizer,” he says. “You want to make sure you pivot your product mix to current times.” 

Keep up on advertising, promotion, and communication with shoppers. Shoppers want to see stores that push through recessions and come out stronger afterward. 

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