Young Asian woman with protective face mask holding shopping basket and using smartphone while grocery shopping in a supermarket

The outbreak of the Covid-19 pandemic saw a shift in consumer behaviour overnight

Retail moved almost entirely online whilst non-essential shops closed and shifted to a digital-first model.

Now the dust is beginning to settle, and whilst we see consumers are cautiously heading back to bricks and mortar stores1, we have the opportunity to assess the potential longer-term impact of consumer behaviour, how habits have changed and how we can use this to start planning into 2022.

In this blog, we look at some of the key changes in consumer behaviours and attitudes towards spending since the outbreak of Covid-19, and how we can turn insight into action.

Why are consumer behaviours changing?

Since 2020, two evolving key factors impacting a consumer’s ability to purchase goods and services are i. access to and supply of goods and ii. affordability.

During the pandemic, physical access to goods and services was exceptionally limited, moving almost entirely to a digital-first model. Whilst beneficial for established online retailers, smaller businesses were forced to pause trading to develop effective online digital capabilities. For a time, consumers embraced this new model, able to buy everything from groceries, toys and even high-cost meal kits online. And when bricks and mortar stores began to re-open, consumers returned with caution. Indeed we are still seeing 28% of retail sales online vs. 2019 levels, with buyers enjoying the simplicity of online purchasing2.

2021 saw further challenges introduced, with the long-anticipated exit from the European Union, disruption at ports, import duties and changes to regulation meant goods entering the UK from the EU were further to additional scrutiny. Coupled with delays in component parts and long lead-times due to Covid-19 working guidelines, consumers experienced delays on a variety of household goods, from timber to wine and even new vehicles – with little or no availability, buyers had to reassess their needs – spend elsewhere, or save.

In a recent survey3, 45% of respondents said they are now spending less on clothes and shoes versus 2020. And whilst we may ask the question – with an increase in remote or hybrid working perhaps there is a lower demand – 37% of respondents agree that the pandemic has had a significant impact on finances. Exacerbated by the impact of furlough and upcoming Universal Credit cuts, areas with high exposure to Universal Credit, such as London, The North East and North West, can expect ongoing caution around non-essential expenditure.

Whilst some consumers continue to proceed with caution, there are positive signs in a number of areas. Home improvement expenditure is continuing to rise with an estimated £110bn invested in home improvements during the pandemic4, and the increasing consumer desire for a more sustainable and environmentally conscious lifestyle is driving an increase in green spending. And although some high streets may be seeing a decline in footfall, out of town retail parks have seen a lesser impact than we have seen across the High streets and shopping centres5.

A graph showing year-by-year change in retail football in the UK in July 2021.

How will this impact marketers?

With ever-changing fluctuations in consumer spending behaviours, understanding what, where and who has never been more important for marketers. What worked in 2019 may well not work next year as consumers shift their needs to adapt with the changes in society.
Spending patterns, locations wants and needs are ever evolving. And as we move away from a world in which we understand buyers through their digital footprint, and with greater emphasis on privacy controls, building a picture of who we need to speak to, where and how will become harder and harder.

Why Insights?

Using an insight-led approach allows marketers to gain a more in-depth understanding of their customer base, enabling greater personalisation of products and service offerings to individuals based on known factors and preferences.
Insights offer marketers the option to better understand not only what, but how and where customers like to receive information on products, launching a tailored buying journey, in line with your customer’s preferences.

Join our exclusive insight-led webinar for an overview of consumer predictions in 2022, shaped by a changing society, and to understand how a data-driven approach enables more effective targeting.

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2 Deloitte Consumer Tracker Q3 2021
3 2021 Consumer Intelligence research on behalf of Experian, October 2021, of 2003 respondents, 45% answered ‘spending less’ to ‘Thinking about your normal daily spending, are you currently spending more or less on the following compared to last year? – Clothes and shoes’