As businesses re-open, operators are likely to be unsure what the aftermath of COVID-19 will bring and how consumers’ purchase habits may be affected. However, as China and other Asian countries lead the way, with heavy restrictions lifted in early April, we can look at trends from there to estimate the impact on western consumers. Here is adHOME’s list of 6 consumer behaviour trends that we predict will impact Canadian shoppers post-COVID and ultimately the advertising industry as a whole.
1. The Move To Cashless Payment Options and e-Commerce AcceleratedAs the use of cash plummeted worldwide during the height of the COVID-19 pandemic, online banking and money transfer and payment apps like Venmo and PayPal drastically increased their user base. According to reports, PayPal signed up around 250,000 users globally per day amidst the pandemic, with a grand total of 7.4 million users activated during the month of April alone. This boost of users in turn increased the volume of transactions occurring through PayPal by 20%.
Payment via mobile apps such as Apple Pay and Android Pay has increased dramatically as well. While North America is still in the early stages of adopting mobile payment, it is very prominent in Asia and Europe. By the end of 2020 however, it is expected that around 47% of consumers will be using online payment or a digital wallet of some kind. This is good news for retailers, as according to one study done in 2018 at the University of Illinois, people who use mobile payment make purchases 23% faster and spend 2.4% more per transaction. They concluded that the reason for this is similar to why people also spend more on credit cards because the money seems less real.
Contactless payment overall is more hygienic, secure and faster. A study done in 2002 speculated that in fact, paper money carries more germs than the household toilet, with over 94% of bills containing some sort of pathogen on its surface. In addition, with the popularity of smartphones, contactless payment is more accessible than ever.
So, what does this mean for businesses and advertisers? One word, e-commerce. The post-COVID world is likely to be marked with a rush of industries moving online. We will also continue to experience a shift in “O2O” commerce (online to offline), where companies will alter messaging to push customers online as opposed to physical locations.
2. Virtual Work Teams May Continue
With advertising spending still at a low, many agencies may find themselves continuing their virtual work team efforts into the post-COVID world to keep costs low. Following this pandemic, an estimated 25-30% of people will be working from home multiple days a week by 2021 with over 80% of workers saying that they prefer having the option. Prior to COVID-19, one of the largest factors holding companies back from implementing work-from-home policies was a lack of preparedness, an overage of fear, and a general unawareness of the potential benefits. Now, after being forced to adapt, many companies may find themselves reluctant to change back.
Take production teams for example, throughout the pandemic we have seen a number of large scale, network television productions learn how to adapt to producing content from their homes. In a Fast Company interview, one expert speculates that since discovering the ability to direct a team efficiently through virtual means, some teams will have a hard time justifying the big budgets required to physically work together. This, in turn, can and will impact the way that we produce media, even as advertisers.
3. Change in Supply and Demand in Auction-Based Bidding
With more people working from home, the daily usage of most platforms will continue to stay high for both personal and professional use. In fact, over 80% of consumers have reported an increase in the consumption of online content due to the pandemic. As a result, we have seen an increase in ad inventory and placements. However, overall ad spend is down with most companies, especially small to medium businesses holding off on spending media dollars and re-allocating their budgets. With the supply of advertising space increasing, while demand stays the same if not decreasing, advertisers are likely to see a drop in the cost per impression on most digital platforms (Source). This is obviously great news for advertisers, especially those looking to increase brand awareness on a low budget (an obvious objective for most post-COVID advertising strategies).
4. Second Chance at a First Impression
As shelves started to empty, it did not matter as much what kind of soap the consumer got, as long as they were able to purchase soap. For some shoppers, this has resulted in brand preferences no longer being as big of a requirement for purchase. This, in turn, can give many products, brands and companies a second chance at a first impression! Think about sports. No matter how poorly (or even how well) a fan’s team had played last season, there is still a lot of anticipation to see them back on the court or field. Given this, post-COVID could be the perfect time to work on brand image and re-evaluate messaging (Source).
Maintaining a focus on customer security and relationships will continue to be key post-COVID. With over 56% of consumers spending less as a result of decreased income, now more than ever is the time to address consumer needs as opposed to wants.
Overall, embracing digital marketing will be essential post-COVID. As consumers form more convenient virtual shopping habits, many will be reluctant to return to the pre-COVID retail landscape. This can be either a great opportunity for your business, or a detrimental one if you do not respond proactively. Investing in digital marketing can be an inexpensive way to keep up and increase sales post-COVID. Be sure to first analyze both the internal and external landscapes your company is currently operating on and make investment decisions that will both help your customers and align with your overall goals.