Consumers want it all: A new shopping journey
In a world of constant change and uncertainty, consumers have shown incredible resilience. They have adapted to challenging circumstances by embracing technology and finding innovative ways to navigate the unknown. As a result, they now expect brands to do the same.
Gone are the days when online and offline shopping were seen as separate experiences. Today’s consumers crave a seamless connection between the two. They want shopping to be fast and efficient when needed, immersive and experiential at other times, and always easy and intuitive. Moreover, consumers expect companies to align with their values by addressing social and environmental responsibilities.
At New World Norm, we understand the evolving needs and expectations of consumers. We recognize the impact of the COVID-19 pandemic on consumer behavior and the emergence of new demands. To gain insights into these changing dynamics, we partnered with the prestigious IBM Institute for Business Value (IBV) and the National Retail Federation (NRF) to conduct a comprehensive global survey. With over 19,000 respondents across 28 countries, we obtained valuable insights into the demands reshaping consumer behaviour.
What is hybrid shopping?
Today, consumers prefer a seamless blend of both, embracing an “all-of-the-above” approach to meet their shopping needs. They enjoy the flexibility of visiting physical stores, shopping online, and utilizing mobile apps interchangeably. This shift in consumer behavior has given rise to what we call “hybrid shopping.”
Hybrid shopping refers to the practice of combining physical and digital channels to create personalized shopping journeys. It grants consumers the freedom to choose the most convenient shopping method for each occasion. Whether it’s purchasing in-store and having items shipped to their doorstep or ordering online and picking up items curbside, hybrid shopping offers flexibility and convenience.
We recognize the growing popularity of hybrid shopping and its impact on consumer behaviour. In fact, it has become the primary buying method for 27% of consumers and an impressive 36% of Generation Z, surpassing other generations in embracing this approach.
The rise of hybrid shopping
Consumers are using a mix of physical and digital channels to create custom experiences.
Retailers and brands must align their capabilities with the consumer expectations
The COVID-19 pandemic has not only reshaped consumer behaviour but also shifted their views on sustainability. Today, consumers of all age groups are seeking brands and retailers that support their desire to shop more sustainably. Purpose-driven consumers, who prioritise brands aligned with their values and lifestyles, now represent the largest segment across all product categories.
In 2022, brands and retailers have a unique opportunity to foster profitable relationships with customers, but they must first demonstrate their value. Today’s consumers are digitally savvy, purpose-driven, and well-informed. They actively seek out brands that align with their values and expect more from companies across the board, setting higher standards for quality and sustainability.
However, meeting these expectations presents significant challenges. Supply chain disruptions and talent shortages have added pressure to the retail and consumer sectors, necessitating increased creativity and efficiency. In response, a majority of retail (58%) and consumer products (55%) executives are focusing on building agility to adapt quickly to changes in demand.
In this dynamic environment, retailers and brands must lead with purpose and utilise technology as a differentiating factor. By enabling customers to craft their own shopping journeys and providing products that align with their values, including sustainable sourcing, manufacturing, and delivery, companies can meet customer expectations and drive loyalty.
Understanding customer desires is key in this endeavour. By gaining insights into customer preferences, retailers and brands can tailor their offerings to meet evolving demands. By prioritising purpose-driven initiatives and leveraging technology, companies can create a meaningful impact and establish stronger connections with their customers.
Consumers exhibit diverse shopping habits, but they share a common expectation: they want retailers and brands to be accessible and responsive wherever they are, both physically and contextually, throughout their entire shopping journey. What started as temporary measures during the pandemic has now become a permanent shift, as consumers have grown accustomed to the speed, convenience, and personalisation offered by various shopping tools.
From researching products to making purchases and receiving them, customers are seamlessly transitioning between different channels, embracing a hybrid approach to shopping. In fact, brick-and-mortar stores play a significant role in this journey, accounting for approximately 72% of customer interactions.
Consumers gather information about products from multiple sources, including digital platforms, mobile apps, and in-person experiences. However, the channels where they acquire product knowledge may differ from where they ultimately make their purchases. Retailers that can effectively engage customers with accurate product information and reviews through channels they control have a higher chance of retaining customers and closing sales.
By meeting consumers at their preferred touchpoints and providing consistent and reliable information, retailers can enhance customer journeys and drive conversions. This requires a strategic approach that leverages owned channels to deliver targeted messaging and personalised experiences, aligning product discovery with the shopping experience. By doing so, retailers can maximize their impact and increase customer loyalty.
Where consumers learn about products is not the same as where they buy
Shopping preferences vary among different demographic groups and product categories. Digital natives, such as Millennials and Gen Z consumers, tend to shop outside of physical stores more frequently compared to older generations. They rely on mobile apps and web browsers for approximately 58% of their shopping activities. On the other hand, Gen X and Baby Boomer consumers are more inclined to shop in-store, with 71% and 78% respectively favouring this method.
Regardless of age, consumers desire a seamless shopping experience that combines the advantages of physical stores and the convenience of digital channels. Hybrid shopping, which involves a blend of online and offline interactions, has become the primary buying method for approximately 36% of Gen Z consumers, surpassing other age groups.
In response to evolving consumer expectations, the usage of digital shopping tools and services has significantly increased across all age groups in 2021. Consumers now expect online purchasing for in-store or curb side pickup to be as effortless as selecting products from physical shelves. This shift towards hybrid shopping is evident, with over 27% of consumers overall now considering it their primary buying method.
By understanding these changing consumer behaviours and preferences, retailers and brands can tailor their strategies to meet the needs of different demographics. They can optimise the shopping experience by offering a seamless blend of online and offline options, providing convenience, choice, and accessibility across various channels.
Hybrid shopping has emerged as a permanent and essential aspect of the consumer experience. It has become a standard expectation for customers, and retailers must adapt by designing buying journeys that seamlessly accommodate different paths.
To meet these evolving demands, companies need to streamline and digitise the in-store experience while integrating it with digital channels. Although stores are no longer the default mode of shopping, they remain a crucial touchpoint in the customer journey. In fact, nearly half (45%) of consumers still consider in-store shopping as their primary method of purchasing.
To stay competitive, retailers must optimise their physical stores to provide a frictionless and engaging experience. This may involve implementing digital technologies, such as mobile apps, self-checkout options, and personalised recommendations, to enhance the in-store journey. Additionally, integrating online and offline experiences is crucial to creating a seamless and consistent brand experience across all touchpoints.
By embracing hybrid shopping and investing in the integration of digital and in-store capabilities, retailers can cater to the diverse preferences of their customers. This strategic approach enables them to deliver exceptional experiences, build customer loyalty, and drive business growth in an increasingly digital and omnichannel retail landscape.
Digital tools have become integral to delivering the in-store experience that customers expect and demand. These tools provide convenience, efficiency, and personalisation, enhancing the overall shopping journey. For instance, a significant majority of consumers, 71%, either already use or express a desire to use self-checkout services. Similarly, 64% of consumers express interest in ordering online and picking up their purchases in-store.
What initially began as a response to social distancing measures has now evolved into a preferred and practical choice for many customers. The adoption of these digital tools reflects consumers’ desire for a seamless and efficient shopping experience that combines the convenience of online browsing and purchasing with the immediacy of in-store pickup.
By implementing and expanding the availability of these digital tools, retailers can cater to the evolving preferences of their customers. Self-checkout options and buy online, pick up in-store services provide a faster and more convenient way to complete transactions while minimizing contact and wait times. These tools not only meet the demands of the current retail landscape but also offer a glimpse into the future of retail where technology seamlessly integrates with the in-store experience.
Retailers that prioritise the integration of digital tools into their in-store operations can enhance customer satisfaction, drive operational efficiency, and differentiate themselves in a highly competitive market. The ongoing evolution and adoption of these digital tools demonstrate their importance in meeting the expectations of today’s tech-savvy and convenience-driven consumers.
Bricks & mortar retailers have an opportunity with store associates to differentiate them from online-only competitors.
While consumers continue to utilise physical stores for their shopping needs, there is still room for improvement in the in-store experience. According to the data, 37% of consumers desire a greater variety of products, and nearly 1 in 3 (31%) express the need for faster checkout processes. Additionally, 26% of consumers desire a range of self-service options in stores, such as touchscreens and self-checkout facilities.
Consumers also value interactions with informed and knowledgeable store associates, with 27% expressing a desire for more helpful assistance. A notable example is Target, which addresses this demand by providing specialised education to its employees in certain product categories. For instance, the company staffs its Apple-dedicated kiosks with “Target Tech Consultants” who receive training directly from Apple.
By prioritising the training and knowledge of their employees, retailers have the opportunity to cultivate a loyal customer base. However, it is worth noting that only 13% of consumers selected store associates as a primary reason for choosing to shop in-store. This finding suggests that brick-and-mortar retailers have the potential to differentiate themselves from their online-only counterparts by exploring innovative ways to utilise their store employees.
In a retail landscape increasingly shaped by digital channels, retailers can leverage the expertise and assistance of their store associates to provide unique and personalised experiences for customers. This strategic approach allows retailers to combine the convenience of online shopping with the added value of face-to-face interactions, creating a competitive edge in the market.
62% of consumers say they’re willing to change their purchasing habits to reduce environmental impact.
This shift in consumer mindset is a response to the increasing threat of extreme weather events and rising global temperatures. People are now considering the “cost” of products and services in a broader sense, taking into account their environmental impact. This mindset extends beyond just shopping and influences their choices in transportation, investments, employment, and more.
According to the survey, a significant majority of consumers (82%) are willing to choose a more environmentally friendly transportation option, even if it comes at a higher cost. The survey also reveals that companies with a sustainability focus have an advantage in attracting talent, as 68% of employees are more likely to apply for jobs with environmentally responsible organisations, with nearly half (48%) willing to accept a lower salary for such positions.
In their daily lives, consumers are actively engaging in sustainable practices. Reusing and recycling are among the most common behaviours, with 72% of respondents carrying reusable shopping bags and 62% sorting items for recycling at home. Gen Z and Millennials are particularly active in supporting sustainability, with around half of them using greener transportation options and modifying their daily habits to reduce their environmental impact.
Research shows that 62% of consumers are willing to change their purchasing habits to reduce their environmental impact, indicating an increase from 57% two years ago. Brands can empower consumers to make these changes by offering trade-offs between cost, service, and environmental impact. For example, incentivising customers to choose slower delivery options for non-urgent items can help reduce their carbon footprint.
However, it is important to note that while many consumers express these aspirations, there is often a gap between their intentions and their actual spending habits. Less than one-third (31%) report that sustainable or environmentally responsible products made up the majority or all of their recent purchases.
Overall summary
Diverse Shopping Experiences: Today’s consumers are adopting a blend of digital and in-person channels to create personalised shopping journeys. This trend is particularly prominent among Gen Z, with over one-third of them embracing hybrid shopping as their preferred method.
The Continued Importance of Stores: While online shopping has grown in popularity, stores remain a crucial part of the consumer experience. In fact, 72% of consumers still incorporate physical stores into their primary buying method, dispelling the notion that stores have become irrelevant.
Purpose-Driven Consumers: A significant segment of consumers, representing 44% of the population, prioritise products and brands that align with their values. These purpose-driven consumers are actively seeking out ethical and sustainable options when making purchasing decisions.
Growing Focus on Sustainability: Sustainability is top of mind for many consumers, with 50% expressing a willingness to pay a premium for sustainable products. However, there is still a gap between intention and action, as less than one-third of consumers report that sustainable products constituted a significant portion of their recent purchases.
Overall, these insights emphasise the need for retailers and brands to cater to the evolving preferences of consumers. By offering a seamless blend of digital and physical experiences, aligning with consumer values, and providing sustainable options, businesses can better connect with their target audience and drive customer loyalty.