COVID-19: Shifting Consumer Shopping Behaviours
COVID-19 is a pandemic we have never experienced in our lifetime and one I pray to God each day we will never experience again. It has taken its toll on the economy. The Conference Board of Canada has predicted real GDP is projected to contract by 4.0% this year, down from a gain of 1.7% anticipated in the winter, before the outbreak.[i] When we can anticipate getting back to normal life will in most part rely on when a vaccine will be available as noted by a guest speaker on 640am radio (4/23/2020). In the meantime, as noted by BC’s Health Officer, Dr. Bonnie Henry, some of their COVID-19 restrictions will most likely remain in place for at least a year, as that province starts to open up their economy.
Though grocery stores have stayed open, consumers’ shopping habits are changing. Brands of all stripes, especially new brand entrants must adjust if they wish to remain on their radar screen. For instance, before COVID-19, 47% of Canadians took more than 1 shopping trip per week to the grocery store. During this period that figure has dropped to 11%.[ii]
“Welcome to COVID-19: Shifting Consumer Shopping Behaviours”!
COVID-19 has changed the way we shop today and maybe into the foreseeable future as evident by 3 separate studies that revealed:
- Nearly half of Canadians (47%) said they are increasing their deliberate planning to get everything at once.[iii]
- Angus Read: 52% of Canadians now avoid going to the grocery store.[iv]
- Dalhousie University: only 24% of Canadians feel comfortable with the idea of grocery shopping. In other words, more than three-quarters of Canadians view the grocery store as an inherent risk.[v]
Has COVID-19 changed our perception of grocery stores? As noted by Mr. Mark Singleton, VP of Sales and Marketing at Rudolph Foods,
“I think store visits are permanently down forever” – Food Business News, April 2019
In response, consumers have turned to online shopping which is significant given pre-COVID-19, the online market share for grocery for the 52-week period ending June 2019 was only 1.2%[vi]. In just 4 weeks there has been a reported 58% increase in online grocery shoppers with close to one in three Canadians are now shopping this way to purchase groceries.[vii] Per Diane Brisebois, CEO, Retail Council of Canada,
“One new normal from the pandemic will be that Canadian consumers and retailers alike will embrace online grocery shopping in a way they haven’t before. “I expect that we’ll see us catch up to the U.S. and to Europe.” CTV News, April 2020
Shop Kick, a trax Company surveyed 25,000 US consumers to help brands and retailers understand shifting consumer behaviours. Their key findings:
- 76% are adjusting shopping habits due to concerns about COVID-19.
- 26% of consumers are spending less per shopping trip.
- 85% of consumers say brand names do not matter in times like these.[viii]
Nielsen Canada in their weekly COVID-19 up-date finds:[ix]
- March 2020, consumers have shifted more of their spending to conventional retail.
- Shift to private label from branded: +42% vs. +31%, 4-week period ending March 28, 2020.
- Centre of store departments is now outperforming perimeter as consumers’ needs change with prepared foods leading the growth.
When COV19-19 eases down the road, the key question that will arise, what brands are most likely to survive this extremely challenging economic environment? As noted by John Torella, Advisor, JC Williams Group,
“I think it is a time for reflection and a time to look ahead and a time to act versus react”. One of the things to look at, particularly if you are a small to medium-sized retailer, is how are you different, how are you unique, how are you special? Because if you’re not, you’re a commodity. You’re interchangeable and you won’t make it through this.” – Retailer In-Sider, April 2020
Mr. Torella’s statement is right on cue regardless of the industry sector. Brands more than ever will have to offer a unique selling proposition and a shopping experience that brings pleasure to the consumer. During this epidemic stay engaged with your target audience, address them in their tone, relay to them how your brand is stretching their budget, and in the process, giving back to society. We will get through this together and become stronger due to this experience.
[ii] COV19: Navigating a Crisis, How Grocery is Adapting to a new Reality, Canadian Grocer, April 21, 2020
[vi] ACV% Channel Development, Nielsen, Period Ending June, 2019
[viii] Navigating Shifting Consumer Behaviours During the COVID-19 Out Break, Shop Kick, April 2020
[ix] COVID-19 Weekly Up-Date, Navigating the Impact on Canadian FMCG, Nielsen, March 2020