Consumer Behavior And The Ever Evolving Retail Landscape

Technological advances have already been making major strides in altering the retail landscape, the changes brought on by the pandemic further impacted the retail industry as we know it. Today, convenience and safety are at the forefront of driving consumer shopping decisions.

According to a report by MRI-Simmons, consumer habits and lifestyles are changing drastically, and along with that, so are their priorities, which directly impacts how and where they shop, their channel preferences, and payment methods.

With all these changes, authenticity matters more than ever before. “Over the past few years, all of us went through personal and professional reckonings. Working at home, spending time with loved ones, and prioritizing what matters are top of mind for many. This translates into a great desire for authenticity in day-to-day life, and also shapes consumers’ relationships with brands. Consumers form emotional connections with brands that exemplify that value – that demonstrate authenticity, are honest, do the right thing, and admit when they are wrong,” says Jen Wan, Co-founder of Soteri Skin, a pH-correcting skincare company.

Increase In Digital Touchpoints

The pandemic drove all shoppers away from brick-and-mortar stores and straight to e-commerce, out of sheer necessity.

Digital solutions were the answer when people no longer felt comfortable leaving their homes, interacting with the general public, or even simply touching products. And that took many forms, such as strictly online shopping, buying online and picking up in store, or touch-less mobile payments. For example, back in March of 2021, only 6% of consumers said they used QR codes to help them shop, but today, 23% have used QR codes in the past six months.

But this drastic digital transformation doesn’t come without its issues.

“Ultimately, consumers want to shop where they are, when they are there, which has empowered a dominating world of reactive discovery,” says Jenna Sereni, CEO and Founder of HandsDown, a shopping platform designed and built for communities and friends. She shared that this has led to 74% of people becoming tired of social media ads and the chaos of being marketed to on these platforms, the issue of fake product reviews written by bots – an issue that Amazon and Facebook are currently battling, and up to 100% paid influencer saturation (sponsored ads) on platforms like Instagram and Tiktok.

“This leaves a massive opportunity for retail media networks to disrupt the world of social commerce and build something more trustworthy, smart, and authentic. What retail consumers crave is to shop somewhere between the worlds of proactive search, such as google or wirecutter, and reactive discovery such as Instagram, LTK, or tiktok – somewhere that cares about trust, authenticity and personal connection,” she adds.

Rise Of Social Media Shopping

Social media shopping has become a norm – it includes anything from in-app purchases on social media platforms to shopping on an influencer’s livestream shopping event.

However, Marianna Sachse, Founder of Jackalo, a sustainable children’s wear brand, reminds us that it’s important to remain in control of your sales drivers. “Don’t rely solely on something that you have no control over. Social media is great, but algorithms change all the time leaving businesses scrambling to find what works again, Sachse says. “Focus on social media as top of funnel, but drive people to email and SMS where you can own the contact information.”

Direct-To-Consumer Brands Are Starting To Gain Traction

While direct-to-consumer (DTC) brands have a tough time gaining brand recognition, they are starting to gain traction. In fact, 46% of consumers say they plan to buy more DTC brands in the future. And 40% think that products from DTC brands tend to be better priced than traditional brands.

Amidst all of this, there is one thing that has not changed. “Despite all of the new ways to communicate with customers and potential customers, people are still most likely to purchase something if they hear about it from a friend. Delight and exceed the expectations of your current customers, and they will be your best resource for new customers. There is no substitution for effective product and excellent customer service. If customers love you (or don’t) they will amplify their message through word of mouth and social media, which holds incredible power,” says Carrie Sporer, Founder of Swair, a haircare company for people who workout.

In fact, 38% of consumers say they still discover new brands through recommendations from friends or family.