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Shopping Becomes Personal and On-Demand

Key findings: Consumers reprioritize spending, brand switching redefinds brand loyalty, online shopping needs a personal touch, in-store contactless offers safer experiences, Buy-online-pickup-instore and curbside bridge the physical and digital divide.

Digital retail experiences are far from new for shoppers. E-commerce, mobile and social have played a steady role in the shopping experience – both online and offline – for years. But when a global pandemic disrupted the status quo, the relationship shoppers had with digital changed.

Online shopping became an essential resource during times of uncertainty. Now, as physical locations resume operation, shoppers will continue to expect digital services to play a role, with experiences designed for convenience, connection and safety. For brands, this “new normal” holds opportunity to deepen relationships with shoppers by understanding their wants and creating omnichannel experiences that cater to their needs.

Online spending surges, but priorities shift

Illustration: three-fourths of shoppers

According to our research, nearly three-fourths of shoppers say they have purchased online more than they usually do over the last three months, with 48 percent saying they believe they would continue to shop online in the future. However, priorities have changed amid economic uncertainty. 

Although people say they typically prefer to shop online for apparel, household supplies and electronics, nearly 77 percent of shoppers worldwide plan to delay these discretionary purchases until pandemic conditions improve.

Chart of Products shoppers prefer to buy online
Chart Priorities in delaying discretionary spending varies by region

Sampling online grocery

Though less than half of shoppers say they typically prefer to shop for grocery items like perishable foods, beverages, packaged goods and pantry staples online, there was a 57 percent increase in those who tried online grocery service for the first time during the pandemic, signaling a shift in demand as shoppers reprioritize spending.

Chart of products shoppers prefer to buy online
Graphic 50 percent of shoppers

Our research finds that 50 percent of shoppers who try online grocery say they would be willing to use the service more in the future. However, concerns over buying fresh produce online, high delivery costs and limited availably of product and delivery slots are among the most common sources of dissatisfaction with the service, leaving room for improvement for grocers when managing orders and fulfillment through digital channels.

Chart Reasons to use online grocery less in the future

As shoppers become bolder, brand loyalty takes on new meaning

Graphic of 55% of shoppers purchased from a new-to-them retailer

Along with shifts in spending priority, our research finds that fifty-five percent of shoppers purchased from a new-to-them retailer and 74 percent purchased a product from a brand that they hadn’t bought from previously.

Chart In the past 3 months people have purchased Clothing, Beauty and Packages snacks from brands that they had not purchased from before

Motivation for brand switching largely depends on category. For discretionary items like apparel and home accessories, cost and a willingness to try new things are primary drivers – mirroring hesitancies around discretionary spending and forays into new offline activities. For pantry staples and household goods, availability is a driving factor – mirroring demand trends related to pandemic stock-ups. 

Despite increased brand switching, shoppers still value loyalty programs. According to our research, loyalty programs are among the top three factors influencing choice of brand, followed by the ability to buy direct.

 

Chart: People reported they more likely to buy from a brand that (offers) fast shipping, wide selection of products and a customer loyalty program

Direct online purchasing resonates differently across different categories. Shoppers across all regions and ages express the most interest buying directly from clothing, shoes and accessory brands (42 percent), electronics (41 percent), beauty and skincare companies (34 percent) and home appliances (30 percent), signaling a greater propensity for brand recognition and loyalty among these product groups when compared  to other categories.

With openness to trying new things, the idea of brand loyalty moves beyond just preference. Shoppers don’t just want to be offered new products or services, they want to feel understood by the brands they value and interact with regularly.

Retailers struggle to add the personal touch online

Online shopping continues to grow, but the journey is far from complete when it comes to satisfaction – especially when recreating physical touchpoints digitally. Shoppers note frustration with the ability to try out products, communicate with customer service and process returns online, opting for in-store experiences instead.

Chart Online/In-store preference of journey stages and satisfaction with online ability to accomplish these types of tasks

Since these actions are inherently physical, retailers must consider how to better connect online and offline actions when social distancing measures remain top-of-mind. Technologies like chatbots, in-platform social messaging and video conferencing can spark more efficient real-time customer service interactions, with the ability to automate routine processes while offering opportunities for personalized communications when handling complex inquiries.

Retailers are also turning to augmented reality to bring a physical touch to digital spaces. For example, Sephora allows shoppers to virtually “try-on” beauty products by uploading a photo of themselves to their website or mobile app. In the household goods space, retailers like IKEA give shoppers an opportunity to build virtual “rooms,” with shoppers mixing and matching products to envision an ideal space and video chat with a customer representative to ask questions before committing to a purchase. This convergence of physical and digital can be used online and in-store, giving shoppers options to engage digitally at physical locations, or from the comfort of their homes.

But in-store, shoppers keep their distance

At physical locations, shoppers are looking for an experience that provides safe, socially distant interactions enabled by contactless services. According to our research, three-fourths of shoppers cite health and safety as a top factor influencing choice of retailer.

Of the safety measures noted, limiting the number of people in-store was the most preferred precaution across all generations.

Chart of Health and safety in retail stores by age

Of contactless options, shoppers across generations say self-service checkout and mobile scan-and-go technologies make them feel safer while in-store.

Chart of countless technologies by age

When compared with other retail, shoppers cite a greater need for health precautions and contactless services at grocers. This divergence could play into higher foot traffic at grocery stores, a preference for in-person shopping at these locations, and grocery’s ongoing role as an essential retailer.

Chart of percentage of participants that selected health measures or contactless options in their top three criteria for patronage
Graphic of 39%

People are also dipping into their digital wallets in preference for contactless payments. Sixty-seven percent of shoppers say they’ve used some sort of contactless payment at a physical location, with 39 percent saying they would use contactless payment almost every time if offered. Tap-to-pay enabled credit cards are the top method of contactless payment across all age groups, with mobile payments, like Apple and Google Pay preferred among Millennials and Gen Z.

BOPIS, curbside pickup provide a balance

Buy-online-pickup-in-store (BOPIS) and curbside pickup are both fulfillment methods that connect the dots between online and offline interactions – giving shoppers the ability to continue to research, discover and purchase products online, with the convenience of immediate fulfillment and the ability to interact with store employees in a limited setting.

According to our research, BOPIS/curbside pickup are the most  preferred methods of pickup/delivery, but there are notable preferences by region and age.

For example, Gen Z and Millennial shoppers are more likely to opt for newer methods of online shopping and delivery, like hyper-local, secure product lockers and online marketplaces. Older generations are more likely to favor more traditional 3-5 day ground shipping and they say they’re less likely to rely on services like subscription delivery and online marketplaces for future ordering.

Shipping preferences differ by country

Although shoppers usually prefer using only one method of online delivery, people who use BOPIS and curbside are more open to using other digital fulfillment methods, signaling that shoppers who are more accustomed to using digital fulfillment may be more willing to try new services in the future.

As physical retail adapts to pandemic conditions, brands are accelerating efforts to adapt their storefronts and existing contactless offerings. Walmart Canada, for example, allows shoppers to build shopping lists, schedule pickup and delivery and quickly checkout using their mobile device. Grab-and-go lockers are also available at select locations, providing shoppers with a convenient, touch-free way to pick up online orders in-store.

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The Digital Life of Shoppers

Shoppers have embraced digital channels throughout the pandemic, developing new habits and preferences. To improve experiences, retailers and brands must identify pain points in the shopper journey and build omnichannel solutions that create frictionless experiences both in-store and online.

Create seamless end-to-end shopping experiences

While online shopping is on the rise, brands still have room for improvement when connecting online and offline interactions. Brands must consider how all channels play a role in the shopper journey and how technologies like chatbots, mobile apps, social commerce and AR play a role – no matter where a shopper chooses to make a purchase.

Understand shoppers

In today’s “new normal,” loyalty goes beyond offers and promotion. Brands must use data to understand preferences across every part of the shopper journey and create personalized experiences that meet their needs. Offering paths to purchase through direct-to-consumer services can help brands build those intimate, one-to-one relationships shoppers are looking for.

In-store, focus on safety

As physical locations adapt to ongoing social distancing restrictions, grocers and retailers must put health and safety first, leaning into contactless technology to reduce friction while providing environments where shoppers feel safe.

Provide flexible fulfillment options

With more people shopping online, expanded delivery and pickup options through scheduled delivery slots, BOPIS and curbside pickup give shoppers more options while reducing last-mile costs.

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Methodology

For this initial wave, we surveyed 3,000 people in the United States, United Kingdom, Canada, Australia and Singapore. We supplemented and compared our findings with secondary research across a broader set of ten additional countries including France, Italy, Germany, Sweden, United Arab Emirates, Japan, Denmark, Thailand, China and India using syndicated and publicly available data sources.