For many worldwide economies, the pandemic shows no sign of easing, with the UK under its third national lockdown and having significant impacts on consumer spending and confidence.
Overall, consumer spending fell in December at the fastest rate in six months as the lockdown began to hit hard, while Barclaycard revealed that investment has contracted by 2.3% year-on-year.
With this in mind, we’ll use this article to explore changing consumer behavior against the backdrop of the pandemic, as we ask what entrepreneurs should be aware of through 2021?
1. The Rise and Rise of Ecommerce
While total consumer spending may have declined since March 2020, this has much to do with the restrictions placed on pubs, bars, and restaurants nationwide.
However, there’s no doubt that the pandemic has driven a sharp increase in global online sales, as shifting consumer behavior accelerates the trends towards eCommerce.
Overall, it’s thought that Covid-19 added an estimated £5.3 billion to UK eCommerce in 2020, with the market’s performance forecasts upgraded from £73.6 billion to £78.9 billion as a result.
Amazon alone was expected to add £2 billion following the surge in online shopping, and there’s no doubt that the demand for eCommerce will continue to increase sharply in the near term.
2. The Rise of Impulse Buying Online
Over time, consumers have become increasingly enticed by so-called “rewards systems”, which seek to place a viable value on loyal customers and help to incentivize impulse purchases.
From a psychological perspective, customers in this instance are typically driven by ‘FOMO’ (the fear of missing out), while the mere activation of reward system structures is proven to trigger various neurons and stimulate genuinely pleasant feelings.
Even the use of single words such as “sale” or “deal” can trigger such neurons and make rewards programs effective, and they represent an excellent way of optimizing sales during periods of economic austerity.
So, now is the ideal time to create a tailored and rewarding loyalty program for your customers, as this will have the dual benefit of boosting your coffers and stimulating the wider economy.
3. Creating an Immersive Omni-channel Experience
Historically, larger eCommerce players have sought to separate online and offline consumer experiences, instead choosing to create more integrated marketing campaigns that drive a higher prevalence of assisted conversions.
This type of campaign creates an immersive, omnichannel experience for customers, while it also taps into wider trends such as rising e-commerce and the growing influence of smartphones as purchasing tools.
This trend will only gather pace in the near term, with even brick-and-mortar stores being redesigned with mobile purchase points as part of wider social distancing measures.
Make no mistake; as customers continue to research and purchase products while they’re on the move, omnichannel campaigns will become increasingly effective and commonplace across the board.