One of the upheavals in our lives over the past two years has been the way we do our shopping. Going in and out of lockdowns with ever evolving measures to keep us safe has changed consumer behaviour – people have been forced to make their purchases online, cook at home, and think domestically when booking their next holiday. As we enter 2022 we will create yet another “new normal” from the habits we adopted to navigate the latest government advice. Whether these habits will stick with us in the long-term will determine whether or not consumer spending reverts to its pre-March 2020 behaviour.
Online vs in-store
As the retail sector has seen throughout the pandemic, consumers are spending more and more online. The ease of shopping from one’s home has been growing in appeal with the percentage of internet sales of total retail sales climbing steeply since the first lockdown in March 2020. Each successive lockdown brought with it spikes in online shopping that raised the floor of online retail sales.
Some consumers are maintaining the shopping habits they’ve developed, and the decline in in-store shopping will continue. Convenience and choice have won out over consumers getting what they want slightly faster, as many retailers and marketplaces offer expedited or even same day delivery on products.
In-store shopping at risk
The negative outlook for in-store shopping is not just about consumers wanting to mitigate risks of contracting the latest variant, it’s about how aspects of the shopping experience have changed as a whole.
Pleasant social interactions is the top reason for which consumers choose to shop in-store, something that compulsory mask wearing impacts.The mouth is paramount for the nonverbal communication of emotional states, and covering one with a mask impacts an individual’s capacity to recognise and interpret these emotions. Studies show that this is particularly true when it comes to recognising happy emotional states. In-store customer facing employees will need to think about how to use their body language and verbal communication to restore effective and pleasant social interactions.
Another way compulsory mask wearing makes in-store shopping less appealing for consumers is that masks are a psychological marker for danger (i.e. disease) and can trigger anxiety-related associations that, in turn, reduce consumers’ appetite for in-store shopping. So while mask wearing is meant to protect those who do choose to shop in-store, in an unintended way it acts as a deterrent for people as well.
Spending on services such as dining out and travelling is likely to remain stagnant, as consumers grapple with uncertainty around restrictions.
In the lead up to Christmas, UK pubs and restaurants are usually bustling with people out celebrating with friends. However, with the arrival of the Omicron variant and the government advising people to work from home and avoid socialising, the hospitality industry took a big hit at peak holiday time – a period essential for optimising takings and remaining a viable enterprise throughout the rest of the winter months. People didn’t want to get caught in a scenario where they would be forced to isolate, particularly if they had had all their vaccinations, and weren’t exhibiting any symptoms ahead of their Christmas plans.
The travel industry experienced a similar scenario and, for the second year in a row, couldn’t capitalise on the peak time for Brits to go abroad during the Christmas break. Questions surrounding testing and quarantine requirements to leave and enter the UK created barriers that many were either unable or unwilling to work around.
What does the future hold?
Even as rules and restrictions are loosened, it will be difficult to determine whether the spending habits consumers have developed over the past two years will stick around in the long-term. That is, will these habits outlast the pandemic, as we’ve been living this way for so long?
This article was written by our Head of Behavioural Research and Insight, Dr. Alexandra Dobra-Kiel and was originally published in Finance Derivative.