6 ways the pandemic is changing consumer shopping habits.

Nov 30 2020 | PayPal Editorial Staff

Just as you've probably changed the way you do business recently, consumers have also shifted the way they shop – from the products they're buying to the way they're paying for them. And these changes are expected to last even after the crisis ends. According to a June 2020 study from McKinsey & Company, 68% of U.S. consumers say their routines will be affected for four or more months, and 52% say the same about their finances1.

Here's a closer look at how consumer shopping habits are changing – and how your business can adapt to keep those sales coming in.

1. Support for local retailers is increasing.

Community spirit is high. People are shopping more with local brands, both for convenience and to support their community: 46% are shopping in closer neighborhood stores and 80% feel more or as connected to their communities. Meanwhile, 88% expect these connections to remain long after the crisis is over.2

Takeaway: Tap into that growing community spirit by promoting special offers for local residents, which can help you attract new customers. You could start a blog or email newsletter highlighting your business's local outreach efforts and initiatives, while also spotlighting other local businesses to help foster that "we're all in it together" feeling.

2. E-commerce is thriving.

Online shopping increased by 53% as more people self-isolated and worked from home. Over 45% of consumers also used home delivery and a whopping 92% used click-and-collect options that let them pay online and pick up their purchases in-store or curbside.3

 Meet the growing need for e-commerce purchases by building out your presence on digital marketplaces like Shopify or BigCommerce. Providing consumers with convenient home delivery and click-and-collect options can help entice them to keep shopping with you from the comfort of their sofa.

3. Shoppers prefer touch-free payments.

Nearly 40% of consumers are likely to use touch-free payments via mobile devices or credit cards, avoiding cash and person-to-person exchanges and opting for more hygienic methods.Consumers across the globe also plan to continue using low-touch services like self-checkout.5

Takeaway: Help customers feel safe and comfortable by building out your capabilities for low- (or no-) touch payment methods like QR codes. With these digitally shareable and printable codes, consumers can simply scan and pay from their mobile devices.

Get started now by creating your own unique QR code with the PayPal app. We're even waiving transaction fees on QR code transactions until December 31, 2020.6 Follow the step-by-step instructions to generate a QR code here.

4. Consumers value cost-conscious shopping.

A lot of people are feeling a financial impact from the pandemic: 78% of consumers say they've been economically affected by the crisisand 39% of U.S. consumers have experienced a decrease in income in the past two weeks. That means they'll likely be looking for opportunities to save money on their essential purchases.8

 Show that you're sensitive to consumers' difficult financial situations by offering special deals and coupons when possible. This will help them continue to buy the products and services they need without breaking the bank. You could also consider offering a consumer financing option to accommodate people's economic needs and build loyalty, even during hard times.

5. Health and hygiene are new priorities.

Consumers are prioritizing health, hygiene, and cleanliness – and it shows in what they buy:
  • 59% of consumers say they're shopping more health consciously. 9
  • Consumer-health companies have seen an increase in illness prevention and immunity-enhancing products, such as multivitamins, which have seen a 40% year-over-year increase in sales.10
  • 48% of consumers intend to maintain new health and wellness habits they've adopted during the pandemic. 11
Takeaway for small businesses: Help drive sales by promoting health and wellness products in your marketing campaigns. Then prove you're even more committed to keeping consumers healthy by sharing information about how they can maintain healthy hygiene habits, while shopping and in their day-to-day lives. This can help build trust in your brand and make customers feel peace of mind when shopping with you.

6. People are trying new brands and products.

Consumers are trying new brands and products for accessibility and curiosity. Almost 30% have reported picking up new hobbies during quarantine,12 prompting them to discover new brands they will continue to shop with in the future. In China, studies showed 28% of consumers switched to a new store for convenience and stock availability, and 47% of them do not intend to switch back after the pandemic.13

Tap into people's curiosity and willingness to try new products by launching targeted campaigns towards new customer segments. Hook those prospects and stand out from the competition by advertising convenient services like curbside pickup, same-day delivery, and touch-free payments. The PayPal Commerce Platform makes it easy for people to sign up for subscription memberships and recurring payments, so you can turn those fresh leads into loyal and returning customers.

How to meet shoppers where they are.

The future of the economy and retail market may be unpredictable, but data indicates these new consumer values are here to stay. So take this opportunity to adjust your strategies and show consumers you're tuned into the way they want to shop.

Meet customers where they are – whether that's on their computer at home, in-store with touch-free payments and discounted items, or curbside with health and hygiene products. And, most importantly, prove your willingness to work with new customers as they try new brands and seek safety and comfort in these unpredictable times.

The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

1 Consumer sentiment is evolving as countries around the world begin to reopen, McKinsey & Company study of consumer sentiment across 42 countries, June 2020.
2 COVID-19 will permanently change consumer behavior, Accenture, April 2020.
3 How Americans are shopping during COVID-19, Nielsen, May 2020.
4 COVID-19 Is Significantly Altering U.S. Consumer Behavior and Plans Post-Crisis, IBM survey of 25,000 U.S. adults, May 2020.
5 Consumer sentiment is evolving as countries around the world begin to reopen, McKinsey & Company study of consumer sentiment across 42 countries, June 2020.
6 After September 30, 2020, your fee is just 1.90% + $0.10 per transaction when your customers pay you.
7 Evolving priorities: COVID-19 rapidly reshapes consumer behavior, PwC survey of over 1,600 adult consumers, May 2020.
8 Consumer sentiment is evolving as countries around the world begin to reopen, McKinsey & Company study of consumer sentiment across 42 countries, June 2020.
9 COVID-19 will permanently change consumer behavior, Accenture, April 2020.
10 At the heart of a crisis: How consumer-health companies can lead in the time of coronavirus, McKinsey & Company, March 2020.
11-12 Evolving priorities: COVID-19 rapidly reshapes consumer behavior, PwC survey of over 1,600 adult consumers, May 2020.
13 How Chinese consumers are changing shopping habits in response to COVID-19, McKinsey & Company study of 31,000 stores and 500 million+ transactions from 100 million+ shoppers across 150+ cities, May 2020.

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