LiT: The long-term impact of COVID-19 on eCommerce
The COVID-19 pandemic is forcing many consumers to adjust their spending habits. But will these changes result in a permanent shift in shopping preferences?
However, as countries around the globe begin the slow journey back to normality, thoughts will inevitably turn to how consumer preferences will be impacted in the long term. Will the surge in preference for eCommerce and digital services be sustained after the end of health and safety concerns and social distancing, and if so how can digital businesses capitalise on the growth opportunity created by the new potential market?
A permanent impact on shopping habits
To answer this question, we asked 8,000 consumers from the US, UK, Canada, Germany, Austria, Italy, and Bulgaria about their current and predicted future shopping plans. And as well as confirming that they are shopping more online due to COVID-19, consumers also stated that even when the impact of COVID-19 is no longer influencing their daily lives, its legacy will be a permanent change in the way people spend money.
When asked how their spending habits would be impacted in the future, 38% of consumers said that they plan to do more online shopping next year regardless of the end of social distancing. In the US (49%), Bulgaria (46%), and Italy (46%), almost half of all consumers said that they planned to shop more online in 2021.
Even in countries where the expected increase in eCommerce may be lower, such as Germany (27%) and Austria (20%), there is still a significant opportunity of online businesses to take advantage of a growing potential customer base.
Assuming COVID-19 is no longer having a significant impact, this time next year do you think you will be shopping online more that you have done previously?
How online businesses will win new customers
In order to better understand how businesses can adapt to attract these potential new customers, we also asked consumers why their shopping habits would be changing. We also asked consumers that did not plan to shop online more why this was the case also, to determine how online businesses could reach out to these customers.
Health concerns will remain a factor for consumers even following the conclusion of the pandemic according to our research. 40% of consumers who said that they would be changing their habits permanently to shop more online have long-term concerns about the safety of shopping in stores.
However, a concern for safety was not the most cited factor for a preference for eCommerce. For a greater percentage of consumers, the experience of shopping online during COVID-19 had made them alter their plans for shopping in the future. Two thirds (65%) of consumers that plan to shop online more following the conclusion of the pandemic are doing so because they find eCommerce more convenient, and 42% of consumers that plan to shop online more say that it is more enjoyable.
In every market, consumers said that the convenience of eCommerce was a greater determining factor for switching to online shopping than health concerns about shopping stores. Consumers in Canada (74%), Italy (73%) and Bulgaria (70%) were particularly focused on the convenience of eCommerce compared to shopping in stores; more consumers in Germany (47%) and Austria (50%) found online shopping more enjoyable.
And when consumers that do not currently plan to shop online more are asked about why their shopping habits will not be affected, only 44% say that this is because they prefer to shop in stores. Of the 56% of consumers that do not currently plan to shop online more, 9% say they cannot do so because they already do all of their shopping online, and this rises to 13% in the US.
So for eCommerce businesses, winning in this new environment means an even greater focus on consumer experience. To win and keep these new customers that want to shop online more frequently, merchants must offer a seamless product via both browser and smartphone app. That includes the checkout; if customers are burdened by a slow or arduous checkout process they’ll not only be more likely to abandon the transaction they’re currently making, they’ll also likely take their business permanently to another merchant that offers them the convenient experience and enjoyment they’re seeking to obtain.
In addition to a seamless checkout process, offering consumers more methods to pay is another way that that online businesses can make their checkout more convenient and enjoyable for shoppers. By giving customers a greater choice as to how they make payments, online businesses enable customers to select their preference and not compromise, which may be particularly relevant for those customers that are shopping online for the first time and do not want to share their financial details.
Overall 48% of consumers said that they do not feel comfortable entering their financial data to pay online, and 75% would rather use a payment method where their financial details are not shared with the merchant. By including alternative payment method options at the checkout, merchants can take away these concerns and therefore boost the experience value for customers.
For example, 40% of consumers say that would like to buy products online with cash if it is easy to do so, and 36% of consumers say that they will shop online more regularly if they are able to pay with cash. Integrating a digital cash solution into the checkout not only satisfies existing customers, but attracts new customers as well.
All data referenced is taken from our latest consumer research Lost in Transaction: The impact of COVID-19 on consumer payment trends. To compile this data Paysafe and Sapio Research surveyed 8,000 consumers across the US, UK, Canada, Bulgaria, Italy, Austria, and Germany between 8-15 April 2020.
The key takeaways from the research are available here.