The Covid-19 Outbreak has Accelerated the Digitisation of How We Work, Live, and Shop

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By: Wise Marketer Staff |

Posted on November 3, 2020

But How Will Today’s Habits Shape How People Exist in a Post COVID-19 World?

Editor's Note: You've heard the expression "blink and you've missed it". Well, content comes at us so quickly today that it's not a matter of blinking and missing anymore. We just can't keep up and absorb all the content available to us. The game today is to find shortcuts to absorbing good content and Sarah Richardson, Founder and Chairman of the Australian Loyalty Association, has given us a great tool to do just that. Sarah has created a series she names "Blinx" in which she provides a summary of highlights from important research and white papers from a variety of sources. What follows is "Blinx #1", a concise and very useful summary of a MasterCard Recovery Insights paper titled "The Shift to Digital". Sarah not only saves you time but adds her own insights into her review of this informative report from MasterCard covering transformation to digital before and during Covid-19. We hope you enjoy it.

Since the outbreak of Covid-19 we have seen work, school, exercise, doctors, entertainment, legal services, and retail shift from physical to online. Consumers have quickly developed a baseline expectation for an omni-channel shopping experience. For those that haven’t been able to keep up with the transformation to digital, and didn’t have good capability prior to Covid-19, it has been hard to catch up.

By: Sarah Richardson, CLMP

Digital transformation has been immediate due to Covid-19, and we have all had to bolster our digital presence in order to survive.

In the full month of May 2020, US e-commerce spending grew by 93% year on year and during the same month, e-commerce as a share of total retail sales reached 33% in the United Kingdom — an unprecedented high.

U.S E-Commerce Sales Growth in May 2020 compared to the prior 12 month average saw footwear, apparel, electronics, sporting goods, toys, hardware, and auto parts thrive in the digital environment.

Groceries has seen the biggest surge, but spending on interior furnishings and home improvements has seen the most profound shift to digital with roughly $9 billion spent in May. Restaurants have of course had to shift quickly to digital, a trend that had already began to accelerate prior to the crisis.

Spending growth was bolstered after stimulus funds were dispersed (89.5 million Americans received a stimulus cheque during first 3 weeks of program) and unemployment insurance, which kicked in around the end of March, was a great boost.

Consumers are focusing more on staples versus spending on luxury. In May e-commerce luxury decreased by 14% year on year, showing that the digital shift has not been seen in all sectors; furniture, department store sales and jewellery have been negatively impacted.

What trends are likely to continue post Covid-19?

Activities consumers miss the most are ones that experts predict they will likely want to return to first, however the safety of these activities will be a primary consideration. 

28% of consumers most missed eating out, 19% missed travelling, and 19% missed out of home leisure activities. 

Consumers expect long term changes to their lives including 69% think we will be using more contactless payments, 60% that the shift to working from home will persist, 47% that consumers will shop less in store, and 50% think that we will go to fewer movies, concerts, museums and sporting events.

Some profound changes can be seen in the shifts to retail radius. In the past it was defined by distance from other retail stores. But now, favourite coffee shops, shopping malls, and barbers positioned around the shopper’s home, are the new retail radius. As personal movement and comfort levels pick up, there will be a focus on neighbourhood shopping. 

Companies in the past focused on fewer, larger stores but data-driven insights from HEMA, which operates more than 750 variety stores in three continents is showing that smaller stores are doing better than larger ones. Sales are shifting to smaller stores, located in more residential areas, as people choose to stay home and shop more locally. This shift inwards has also led to an opportunity. While small businesses traditionally lagged behind larger ones in omnichannel presence, the trends of both shopping at local physical stores and online shopping from home converted to ignite a need for them to go online.

Customer loyalty has also changed dramatically as traditionally brands spent more time, love and attention on their high value customers. More ’touch’ lavished on high-priority customers meant a higher quality experience — higher loyalty. Enter Covid-19, and the model has been turned on its head. Now fewer attendants, less interaction, and NO touch wherever possible signifies quality. For brands’ loyalty programs, that also means a shift to digital engagement and carving our unique niches that help them stand out.

Sarah Richardson is Chair of Australian Loyalty Association and Director of Sciensa Loyalty.