The economic and supply chain disruptions from the global pandemic have intensified pressure on retailers to perform during the key Holiday timeframe, even as they are adapting to rapidly changing consumer behavior. To prepare for an unprecedented fourth quarter, retailers must evolve their approaches by embracing new technologies that meet consumers’ needs by making it easier for people to shop where and how they want.
The New Norm – How consumer behavior is changing
The pandemic ushered in a transformation of shopping, for retailers and consumers. In 2019, despite the rise in both mobile and online shopping, nine in ten retail sales still took place in store. By the Summer of 2020, that changed almost instantaneously as three in five people reported limiting time spent in stores as a result of the Covid-19 pandemic (Mintel, 2020).
From a retailer perspective, this has driven significant changes in distribution and fulfilment. As safety concerns intensified and store openings fluctuated, more people turned to ecommerce to find the essentials they needed, driving the largest share increase in ecomm sales ever in a single year at +18%. (eMarketer, July 2020) Beyond standard ecomm, retailers introduced more choice in fulfillment options, such as “Buy Online and Pick up In Store” (BOPIS) and contactless curbside pickup. Consumers rapidly adopted these services, resulting in 208% YOY growth in BOPIS orders in the US (Adobe Analytics, April 2020).
From a consumer perspective, people spent more time on mobile devices, particularly for shopping. 76% of global consumers say they’re spending more time on their smartphone since the start of the COVID-19 outbreak. Globally, 85% of people are now shopping online due to COVID-19. This holds true across generations, with Gen Xers and Boomers respectively spending 44% and 30% more time shopping online compared to prior to the outbreak (GWI, April 2020).
These trends aren’t new, but 2020 accelerated their adoption at an exponential pace. We expect that these shifts will be long-lasting, as 80% of Americans who tried new shopping methods plan to continue to use them even after the crisis. (McKinsey, 2020) With these new habits, retailers face an urgent need to embrace digital transformation. All aspects of in-person shopping — from discovering new brands to convenient checkout– must be translated to their comparable digital alternative. Businesses need to seize opportunities to test and refine ideas to bring the in-store experience online. Here are three consumer needs that can be met through leveraging technology and creative innovation.
1) Frictionless Shopping – More convenience, faster communication
Shoppers now expect every brand interaction to be quick and seamless, no matter where it happens.
COVID-19 created new ‘friction’ for in-store shopping, as people focused on social distancing and were wary of spending too much time inside physical stores. They embraced BOPIS and curb-side pickup, driving 3-5 years of growth in just 3-5 months. And it is expected to have lasting power, with 60% of consumers intending to continue this behavior through the remainder of 2020. (McKinsey & Co., Aug 2020).
This holiday season, retailers can gain advantage by removing friction for shoppers by dynamically informing them when the store is quiet for pickup, or by targeting ads to drive BOPIS conversions – not only to accommodate safety concerns, but also for last-minute shoppers who have missed accelerated shipping cutoff dates.
Leveraging a hyper-local strategy to connect with customers is another way to eliminate friction and create advantage. As businesses right size inventory and clear goods from stores, Dynamic Ads provide maximum flexibility and efficiency. This technology automatically reaches people based on their locations and displays the products that are in-stock in their local store. Brands can regionalize their offering by filtering for local inventory, and reflecting local pricing and offers in creative. Retailers with an omni-view of inventory and fulfillment will win both short term sales and long-term loyalty because they will serve customers where they are and how they want to shop, with as little friction as possible.
As the realities of the pandemic and of local conditions continue to change throughout the fourth quarter, shoppers will need real-time information about their stores. Facebook recognized the importance of this type of communication to remove friction, and enables retailers to indicate a ‘temporary service change’ on their Facebook page to update business hours, temporary store closures, or availability of pick-up services. The service change information is surfaced organically via search, or when people visit a retailer’s page.
All of these options to address shifting consumer behavior aren’t just convenient and personalized, they also help keep staff and shoppers safe.
Shifting the benefits of in-store, online
Store shopping remained popular for so long because of the visceral experience inside a store. It is hard to imagine some of these experiences translating online: seeing, touching and trying merchandise, receiving guidance from a salesperson, seem to beg for in-person interactions.
Retailers have demonstrated extraordinary ingenuity to deliver online shopping experiences that mimic the in-store experience. Instead of customers scrolling through reviews of a lipstick shade or squinting at mobile screens to see the color on a model, Augmented Reality Ads let them try it on virtually. Instead of trying to imagine what a new desk would look like in their homes, these same ad experiences allow them to see it in their home office. If a customer has questions about the color or size of an item, they can reach out directly to sales associates on Messenger. Once they are confident in their purchase decisions, they can book an appointment for curbside pickup. The key for retailers is to continually consider how to bring the personal and delightful aspects of in-store shopping into the digital realm.
The delight of discovering new products
People have always loved to discover new products and brands — and that has not slowed down. 60% of global consumers say they’ve tried a new store site or brand during the pandemic, and most plan to stick with it. (McKinsey, July 2020)
This idea of ‘discovery commerce’, or finding new products through the power of machine learning and data, is all about connecting the right product to the right person — before they even start looking for it. For consumers, it feels serendipitous. For businesses, it is an essential tool to stay competitive and drive demand. This is one of the most fundamentally joyful elements of shopping, and as we looked at the reinvention of shopping, we wanted to elevate that joy on our platforms.
People were engaging in discovery commerce across Facebook and Instagram long before we made it a feature on our platforms. Brands and creators were finding workarounds to link to products featured in the beautiful images of their Instagram posts, helping their followers more easily buy. So we created Instagram Shopping to make it easier for people to shop in the moment of discovery.
Instagram has a set of features that allows people to shop photos and videos across Instagram. Shopping tags allow businesses and creators to highlight products from their shop in both Stories and Feed. Checkout on Instagram allows eligible businesses in the U.S. to sell their products directly on Instagram without having to leave the app. People can now discover new products in the place where they are spending their time and finding inspiration, then seamlessly purchase those products without the friction of leaving the app.
Additionally, we’ve recently rolled out Live Shopping to select check-out enabled businesses in the US. Sellers, brands and creators are able to tag products before going live, and those products will be shown at the bottom of the video so people can easily tap to learn more and then ultimately purchase while continuing to watch the live stream. Dragun Beauty, a cosmetics company, recently leveraged Live Shopping through creator Nikita Dragun’s avid Instagram community to launch her new beauty product. The experience drove 43,000 unique viewers and 33,000 product page impressions. Viewers added 5,000 products to their shopping bags, getting further down the purchase funnel.
This holiday season, it is imperative that retailers ask, Where are my customers now?, and Am I evolving to meet the new normal? The world is changing rapidly, and we want to partner with you to find your customers where they are, help them discover products they love, and buy where and how they want – safely and securely.
Through innovations in technology, creativity and imagination, I’m confident that even during an unusual holiday season, retailers can reach new customers and build long and short-term loyalty and sales.