The supercharged shift to online - four important trends for consumer firms
The COVID-19 pandemic has led to significant changes in consumer behavior. Online shopping has reached a new plateau in the Nordics, people shop online instead of in stores and they will continue to do so when communities re-open. By looking at the consumer trends, we have identified four areas where it is crucial for companies on the consumer market to respond to the new conditions and audiences.
Strategy& and Norstat have conducted an extensive survey of more than 5.500 consumers in the Nordics to understand and help firms navigate the emerging trends shaping the future for consumer markets. Uncertainty and an online shift presents growth opportunities, but also stresses the need for strategies responding to the increased complexity. Here are four survey highlights where firms should respond by updating their strategies to the new playing field.
Consumers are holding back spending, but expect a speedy recovery
21% of consumers in Sweden have already been negatively impacted by the COVID-19 pandemic. Younger generations have been disproportionately impacted with 36% reporting a decline in income. Although older generations have been less financially impacted, their consumption has decreased more. 26% of the respondents age 56 to 74 claim they have spent less since the pandemic broke out, and only 18% of the 24 to 39 year olds claim the same. This points towards a speedy recovery, with older generations potentially resuming normal spending as societies reopen.
How to Respond
Navigate the crisis and position for the future.
Supercharged and permanent shift to online
27% of online shoppers in Sweden state that their shift to shopping online is permanent. The shift is particularly evident for older customer groups and for certain sectors. 29% of online grocery shoppers are shopping online for the first time. These new customer groups have different expectations of their shopping which creates new opportunities as well as challenges for consumer firms.
How to Respond
Capture profitable volumes and manage the increased complexity.
The physical store as a standalone sales channel is no longer relevant
With the exception of grocery retail, no retail segments saw a majority of consumers saying the closeness to physical stores is important for them. Responses ranged from 49% of consumers stating that it is important with a physical store close by for beauty and health while only 13% said the same for children’s articles and toys. With location in itself becoming less important, retailers will need to rethink the way the store network fits with the broader omnichannel strategy.
How to Respond
Accept the role of physical stores primarily as a support to the omnichannel strategy.
Openness to digital services and new forms of engagement is increasing
Nordic consumers have been eager to try new digital services during the pandemic, with several categories seeing more than a 100% increase in new users. This shows that consumers have been fast to try new digital services offered by firms like Kry, SATS and various musical artists. However, the data shows that an overwhelming majority of consumers still prefer physical services. House showings, training classes and workouts have a more promising digital future with many consumers preferring the digital service over a physical service.
How to Respond
Leverage new ways of engaging digitally and personally with consumers.
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