Since the COVID-19 outbreak, the application of digital technology has enabled consumers to get up-to-date information about the pandemic and made it possible for telecommuting, online teaching, and online medical consultations. Meanwhile, digital technology is also playing an important role in the growth of online consumption. Affected by the COVID-19 outbreak, consumers have increased their frequency of online shopping and the amount of money spent on online consumption. Through interacting with online retailers, consumers have gained valuable knowledge about the service capability of online retailers. These interactions and experiences have led to consumers favouring certain online retailers over others.
For consumers who have never purchased online before, online shopping became a habit during the pandemic period and is likely to continue even after it ends. This fundamental change in the shopping habits of former offline only consumers will lead to an expansion of the online market. It is essential for retailers to focus on the psychological and behavioural changes of consumers during this period, in order to meet consumer needs and expectations, and improve the consumption experience. This article presents a discussion of four major consumption needs during the COVID-19 pandemic and the corresponding measures undertaken by retailers that turn adversity into opportunity.
1. Convenience
Following the sudden outbreak of COVID-19, staying at home on a daily basis has become normal life for most residents in China. Consequently, consumer demand for the convenience of shopping without going out is prominent. With the rise of the ‘housing economy’, the O2O (online to offline) business model has been developing rapidly. Online platforms owned by large supermarkets such as RT-Mart and Carrefour have enabled consumers to make orders online and receive deliveries on their doorstep. Alibaba’s innovative supermarket, Hema, has integrated online (the mobile app) and offline (the physical store) channels to create synergy. With the help of Ele.me, Meituan.com and other online platforms, mini-malls, bakeries, cafes, and restaurants have expanded their geographical scope of business. In addition, the COVID-19 pandemic has accelerated the penetration of the O2O model into local communities. For example, with the help of WeChat mini-programs and WeChat groups, community-based grocery stores have opened up and expanded their online retail business, which has ensured the supply of daily necessities for residents during the crisis.
Obviously, the Internet has become an indispensable part of the retailer’s omnichannel distribution. Through the integration of online and offline channels, many retailers have enhanced their brand image and improved customer stickiness in the process of fighting the pandemic. In short, the COVID-19 outbreak has been the catalyst for the digital transformation of traditional retailers. There is no doubt that the digital innovation of retail operations is imperative.
2. Timeliness
During the pandemic period, consumers mostly purchase fresh food online. As fresh food deteriorates easily, there has been increasing consumer demand for logistics that ensure the timeliness of deliveries. Whether online retailers can send goods in time and whether products can be quickly delivered have become determining factors in the purchase decisions of consumers. As the pivot that connects online retailers with consumers, logistics is essential for online retailing. However, limited logistics capacity has posed a serious threat for most retailers since the COVID-19 outbreak. During the Chinese Spring Festival, shortages in delivery personnel were common. Now, the impact of the pandemic has added to the challenges, making it even more difficult to ensure efficient logistics.
In the face of these difficulties, online retailers have been setting good examples. First, the logistics owned and operated by JD.com have demonstrated significant advantages in terms of delivery speed to meet consumer demands for timeliness. Second, Hema and other catering enterprises cooperate with each other by ‘labour sharing’, yielding social and economic benefits. Labour sharing refers to when Organisation A has idle employees but Organisation B needs extra staff, Organisation A will lease staff to Organisation B on a short-term basis. The COVID-19 outbreak has left many employees in the catering industry unemployed. Whereas online retailers like Hema are in urgent need of more staff to handle soaring online orders. Through labour sharing, restaurant employees have temporarily joined Hema to help with product distribution, which has ensured Hema’s service quality. This innovative model of collaborative employment has created a ‘win-win-win’ situation by meeting the emergency employment needs of online retailers, alleviating the unemployment pressures of catering enterprises, motivating idle staff, and optimising the allocation of human resources.
3. Security
Due to the pandemic, consumers now pay more attention to product hygiene and personal safety when receiving deliveries. To meet this consumer requirement, takeaway platforms, such as Ele.me, have offered ‘contactless delivery’ services. Contactless delivery refers to couriers placing goods at designated locations such as at the gate of community residences during the COVID-19 pandemic period. This measure has proved to be effective in protecting the consumer and courier from making close contact, reducing the possibility of transmission and infection.
Meanwhile, catering enterprises have been providing a special ‘takeaway information card’ attached to the takeaway package. This little card indicates the name and the temperature of the chef, the packager, and the courier. Some of these cards even incorporate QR code technology. By scanning the QR code, the consumer can watch a short video about the production and packaging process. Using this multimedia approach, catering enterprises seek to convey that the food production process was safe, reliable, and traceable. These approaches have enhanced brand warmth, allowing consumers to feel more at ease.
In addition, the self-service package lockers, such as Hive-Box, have provided the last-mile solution to logistics. As this locker system enables contactless delivery, it has been favoured by consumers, especially since the COVID-19 outbreak. This business will likely continue to grow after the end of the crisis. Even more advanced, delivery robots have efficiently accomplished tasks related to the point-to-point distribution of materials in hospitals at the frontlines of fighting the COVID-19 outbreak. The application and upgrading of technologies such as automated delivery vehicles and drone deliveries during the pandemic will accelerate the penetration of artificial intelligence into the civil logistics industry.
For hygiene and safety reasons, consumers now hold higher expectations for product packaging because of the COVID-19 pandemic period. As a result, online retailers have enhanced product packaging, for example, by using a plastic film to separate food into smaller quantities. Some online retailers even use ‘packaging’ as their selling point and launch products such as ‘packaged chilli’ and ‘packaged potatoes’. To a certain extent, this measure reassures consumers of food hygiene. Nonetheless, it has increased packaging waste and may lead to future environmental problems. Online retailers should avoid excessive packaging and use biodegradable materials.
4. Fun
Consumer enthusiasm for fun at home has manifested itself into the popular game console, Nintendo Switch, during the COVID-19 pandemic period. The consumers’ pursuit of fun provides an opportunity for industries that have suffered heavy losses due to the outbreak of COVID-19. For example, online tourism retailers can show videos of tourist attractions and vacation product highlights on webcast platforms. They can also use digital technologies, such as virtual reality, to create immersive travel experiences online. These approaches would appeal to the consumers’ demand for fun. In this way, marketers can arouse the emotional resonance of consumers and raise the awareness of travel products in the consumer’s mind. Following this, online tourism retailers should design customised travel products and offer personalised travel itinerary advice via online consultations. This will improve the efficiency of decision-making by potential tourists and promote the recovery of the tourism industry post-pandemic.
In conclusion, the changes in consumer psychology and behaviour during the COVID-19 pandemic will profoundly influence the marketing strategies of retailers in various industries after the end of the pandemic. The sustainable development of retail businesses derives from insights into consumer needs and the efforts made to meet diversified consumption needs. To accommodate this, retailers should accelerate their digital transformation and embrace innovation.