While the impact of the COVID19 pandemic continues to reverberate through global economies, it remains difficult to discern when we might return to a semblance of ‘’normality’’. Yet, whether it’s in six months or two years down the line, there will come a day when restaurants, nightclubs, and brick and mortar retailers can reopen.
However, while on the surface things might appear as they were, the change in consumer behaviour we are currently witnessing may not just exist in the short term, rather what we may see is an evolution of behaviours and see the establishment of a new set of norms – redefining our global commercial landscape.
In order to grasp an understanding of what these long term implications might be, we need to look at early signs of shifts in behaviour, understand what consumer behaviour is impacted by, and whether these trends are likely to continue into the future.
What’s for sure is that a change is coming, and businesses ought to be aware of this and adapt their commercial approach accordingly.
What impacts consumer behaviour?
Bringing things back to basics, consumer behaviour is essentially the actions that consumers take in the marketplace and the motives behind these same actions. Consumer behaviour is naturally attributable to things such as personal preferences and the culture we live in which can shape our values and perceptions, which in turn alter consumption patterns.
However it’s also influenced by economic, social, environmental factors, as well as the emergence of new technologies. When we consider the crisis at hand, we notice that each of these named factors are present.
From an environmental perspective, social distancing restrictions, the mass closure of public amenities and non essential businesses on a global scale in response to the crisis have undoubtedly altered our consumption behaviour. Of course, if individuals cannot physically enter stores or restaurants they cannot spend, but it’s also important to note that the fear attached with being in public places is eroding their propensity to spend and consume, and this will likely continue even as countries begin to ease restrictions and gradually reopen economies.
Following from this, in terms of economics, globally we are seeing huge increases in unemployment as some economies in the world come to a virtual standstill. A global recession is inevitable and the chances of a ‘V’ shaped economic recovery look unlikely given that there’s no dead-set timeline for when things can return to normal. A long-term change in behaviours and gradual reopening of economies will be financially challenging on both governments and its citizens, resulting in a general decrease and reticence on discretionary spending.
The consequences of this are crystal clear, consumers are not only going to be spending less, but also they are going to change where they’re spending their money.
What are the early signs indicating?
This year, e-Marketer projected that e-commerce would account for just over 16% of global retail sales, adding up to approximately 4.2 trillion USD. However, this figure looks set to be revised in the coming months. According to Forbes, expect to see e-commerce businesses thrive in the next few months as consumers turn to digital alternatives to circumvent physical shopping environments, but don’t be surprised should this trend continue well into the future.
A number of industries such as restaurants, tourism, and entertainment have been hit hard by the pandemic. While in the case of tourism, there may not be much that can be done but attempt to weather the storm – other hard hit businesses are attempting to adapt. Many restaurants who traditionally operated an eat-in only model have evolved into delivery service providers, there’s even been a pub in northern Ireland who has gotten creative and set up a no-contact pint delivery service.
Conversely, product categories on the up include electronics, health and beauty, books and streaming services. We are also seeing a trend of stock shortages across a number of product categories due to disrupted supply chains. The result of this is that more consumers are going online to search for products, some for the first time. It is in this shift towards digital purchasing that presents both a challenge and opportunity for businesses globally.
E-commerce or selling online aside, companies can no longer hold out on creating a digital presence whether it be via social media accounts, a website or preferably both. With customers and potential customers now restricted in their physical movements the traditional methods of client attraction and retention such as holding events, presenting sales pitches etc. become almost impossible.
As a result of this, it’s high time that businesses across every industry become digitally enabled. These platforms will become an integral part of attracting and engaging with potential clients in the new commercial environment.
While in the short term the current supply chain issues work in opposition to cross-border e-commerce, in the long-run it will have the inverse effect. With more and more shopping online, these behaviours look set to continue in the future. According to eMarketer e-commerce habits ‘’form during periods of intense activity, and when those habits already have momentum, they become even stickier’’.
So, what does this mean? Well, because e-commerce was already on the up, the coronavirus will basically work as a catalyst to it’s widespread adoption. So while in the short term retailers, whether online or not will be focussing on navigating a rocky economy, in the long term a real opportunity presents itself.
For those businesses that are yet to adapt fully to the digital marketplace, now might be the right time to start. Setting up your own website and adapting your business to cater for things like deliveries could mean the difference between sinking or swimming in the next few months. Even traditional brick and mortar brands such as Heinz have recently launched a delivery service in the UK with ‘Heinz to Home’.
Check out here how to set up your own e-commerce website.
If you’re already running an e-commerce platform, strategic focus should be placed on optimizing your offering and giving consumers the most personalized experience possible. With more consumers shopping online and with a lessened purchasing propensity, you’ll want to make sure all the boxes are covered to secure a sale.
An intuitive and visually appealing e-commerce store is a great start, add to this a wide variety of payment options and localized content and you’ve got a winning combination.
A huge part of localization is website translation, and while this may seem premature if you’re only able to operate in the domestic market at the moment, there are a few things you need to consider.
- Where you’re based: Businesses placed in countries where many languages are widely spoken should have their website translated into each of these languages. Take the example of the U.S who have the second largest Spanish speaking population in the world. By failing to cater for these large customer segments you’re missing out on huge commercial potential.
- Target consumers and future aspirations: If you’re a business with international ambition, now is the time to get translating. While more complicated than usual in the current environment, as restrictions diminish cross-border e-commerce will rise and getting ahead of competitors will be key.
What are the likely long term ramifications?
While we could speculate when things could return to ‘’normal’’, it seems pointless given the ever-evolving nature of the crisis. What is clear however, is that the changes in consumer behaviour are likely to dissipate much slower than the pandemic itself.
Expect a long term shift towards ‘’frictionless’’ retail with many more consumers opting for click and collect and delivery options as opposed to physically shopping in stores. We should also expect a rise in not only domestic e-commerce, but also cross-border e-commerce as consumers have shifted their consumption habits online.
Being prepared for this new commercial environment will be a challenge for all, but adapting your online offering for an international audience will be key. By translating your e-commerce store with a multilingual solution like Weglot you’ll be giving yourself the best chance to succeed in what might well be the ‘’new normal’’.
Times are tough, but with the right steps and some forethought you and your business can overcome what lies ahead. We’ll leave you with some quick advice to summarise what we’ve talked about:
Remember to MAP:
→ Monitor: Keep an eye on trends in your own industry, look at what’s working for your competitors and what’s not, analyse your customer data, and don’t hesitate to reach out to clients and customers for insights.
→ Adapt: Be creative and try to think of innovative ways to adapt your commercial offering to the current situation.
→ Plan ahead: Regardless of your industry, consumer behaviour will have likely evolved post pandemic. Plan ahead and stay ahead.
Get started: Why not try out Weglot’s 10 day free trial to make your e-commerce site multilingual