One year on from the national lockdown, following a period of significant economic turbulence, Barclaycard has detailed what it believes will be the 10 key shifts in consumer behaviour to emerge from the pandemic.
Digitalisation plays a key role in shaping how consumers have altered their habits during the lockdown, with mobile payments soaring according to the bank, which processes nearly £1 in every £3 spent in the UK.
The firm’s consumer debit data revealed that Apple Pay grew rapidly in 2020 compared to 2019, in particular in Leisure & Entertainment, where online debit transactions increased by 70 per cent.
With ‘digital wallets’ and mobile payment services soaring, physical wallets are becoming less popular. Three in ten (30 per cent) consumers and over half of 25-34-year olds (55 per cent) say they now regularly leave their wallet or purse behind because all they need is their mobile phone.
Tom Cheesewright, one of Britain’s leading Applied Futurists, commented on these ‘lockdown legacies’ and what they mean for the retail industry post-pandemic: “Echoes of this pandemic will be heard long after lockdown is lifted through a sustained shift in our buying behaviours. Changes we expected to happen over a decade have been condensed into a year, leading us to ask: what’s next?
“The trend towards online and concierge services look set to continue, with shoppers seeking ever greater convenience and clawing back time to spend elsewhere. Retailers that can strip friction from their sales process while making us feel special will continue to succeed.
“Meanwhile, we continue to seek a greater connection with our local community, going against the all-digital trend. Suburban stores that have survived lockdown look set to thrive when it lifts.”
The other nine ‘lockdown legacies’ can be found below;
- Online grocery shopping surge
“Online grocery shopping has seen consistent growth over the past 12 months, with recent Barclaycard data revealing a 115.2 per cent increase in online grocery spend in February alone, compared to the same month last year.”
- Growth in home deliveries
“With the closure of non-essential shops for extended periods of time, consumers have been receiving an average of two extra deliveries per month since March 2020 (seven parcels now vs five before March 2020). This equates to over 86 packages in total over the course of a year. This growth in deliveries is here to stay, with over half of people expecting to receive either the same amount (47 per cent) or more (10 per cent) in the future.”
- ‘Click & Collect’ boom
“One in three (30 per cent) consumers say they have used ‘Click and Collect’ more frequently since the start of the pandemic. On average, shoppers now use the service three times per month compared to twice a month in 2019.
“Almost all (90 per cent) of those who have been using ‘Click and Collect’ more often since the start of the pandemic will keep this up once all restrictions have been lifted.”
- Rising rate of returns
“In the last 12 months, over half (51 per cent) of Brits have returned items that they have bought online, compared to 47 per cent in the same period in 2019 and 46 per cent in 2016.
“Moreover, 12 per cent of Brits report returning more because they are not able to try items on in-store and nine per cent have used home deliveries as a try-on service, ordering multiple sizes and colours in the absence of a shop changing room.”
- Come to me retail
“Since the start of the pandemic, one in 10 (9 per cent) consumers have used “come to me” retail, where a concierge-style service delivers clothing to customers’ homes and waits while they try it on, so that they can immediately return any items they don’t want.
“The convenience of ‘Come to me’ is proving popular, with 94 per cent of customers planning to use it again.”
- Staying local
“One major positive from the past year is the support people have showed for local and independent businesses, with almost two thirds (64 per cent) of Brits choosing to shop closer to home.
“Barclaycard Payments data shows shoppers spent an extra 63.3 per cent in February at food and drink specialist stores, such as butchers, bakeries and greengrocers, compared with the same month last year.”
- More mindful spending
“Nearly three quarters of people (71 per cent) now think more carefully about how they spend their money and nine in ten (92 per cent) of those who do, planning to continue being more mindful of their spending habits even after lockdown lifts.
“With more time available to scour the internet at home for the perfect gift, half of Brits (50 per cent) also say they have put more thought into what they’ve bought for others, with the majority (83 per cent) of those confident this behaviour will continue.”
- Dine-at-home experiences
“In an attempt to recreate the restaurant experience at home, 10 per cent of Brits tried a DIY meal kit for the first time during lockdown, and 9 per cent have spent more money on them since March 2020.
“Around a quarter (24 per cent) of those who have been ordering at-home restaurant kits, will continue doing so even after hospitality venues reopen and one in five (21 per cent) will still order at-home alcoholic drinks tasting experiences.”
- Investing in infrastructure
“Encouragingly, Barclaycard Payments’ research with retailers shows that small and medium sized businesses are responding to this new landscape, with nearly three in ten (29 per cent) planning to invest in new equipment and technology in 2021, and (13 per cent) viewing technology as the top opportunity for growth over the next year.”
Kirsty Morris, Managing Director at Barclaycard Payments, concluded on the findings: “A year of on-and-off lockdown restrictions have accelerated many retail trends and created some new, unexpected ones. We can’t wait for the pandemic to be over, but in many ways it’ll be here forever through the consumer habits it has helped shape.
“Retailers need to respond to these trends. Now more than ever, Brits expect shopping to be convenient, quick and good value-for-money. For merchants this means investing in e-commerce offerings and payments infrastructures to accommodate more customer-focused shopping experiences.
“Barclaycard’s Smartpay gateway, for instance, supports one-click purchases and allows buyers to pay with a number of different methods in a smooth, safe and seamless way.”