- MAY 21 2020
The future of retail has already been transformed by COVID, and these trends will likely be a big part of how young consumers shop next…
When we asked young consumers what they’ll be spending more on after quarantines, dining out / take out, apparel, and travel were the top categories—but we also know that they’re hesitant to return to public spaces even when lock-downs have ended, meaning that how they shop for these things will continue to shift. COVID has undoubtedly changed what young consumers are buying (according to a report from Adobe Analytics, pajama sales rose more than 143%) but the majority of their shopping moving swiftly online has also meant that brands have raced to release tools and resources to more easily reach them—and make sales—during this time. Some of the biggest trends changing the future of shopping began before the pandemic, but have clearly become an increasing focus in a world where in-store shopping is in question. Here are some of the biggest trends reshaping how young consumers will shop next:
Ecommerce continues to boom among young consumers during COVID. YPulse’s exclusive COVID research found that 42% of 13-39-year-olds are doing more online shopping during Coronavirus, and 25% have been ordering groceries online more. That behavior has been clear in reports from retailers, showing online sales have surged in the U.S. especially for retail and buy online, pick up in store (BOPIS) orders. According to a report from Adobe Analytics, online grocery shopping is up 110%, and online alcohol sales surged 74% in April. Instacart has emerged as “a clear winner” as the go-to grocery delivery service. While Amazon has still been in the lead for ecommerce shopping, Target and Walmart follow closely behind with the expansion of online offerings and first-time customers. Target reported online sales jumping 141% last quarter and 282% by April. Meanwhile, Walmart’s also saw an “eye-popping” 74% increase in sales from its e-commerce platform. New York Magazine reports that the retailer has seen a wave of “relief spending” in areas like toys, clothes, TVs and video games that show consumers are more willing to shop than they were when the crisis began. These massive gains in online shopping numbers amongst huge retail players will without a doubt reshape their plans for the future. Ecommerce was once an afterthought for these giants—now it’s their focus. Case in point: Walmart purchased online retail platform Jet for billions just a few years ago to play ecommerce catch up. This month, they killed the site, which they no longer need because their own ecommerce numbers have exploded. What might the ecommerce-focused retail look like? The New York Times reports that the online shopping habits being shaped now could “stick,” potentially changing the future of shopping even as quarantines start to lift. Mini warehouses could “pop up everywhere” to keep up with deliveries, shortages might continue, or the prices for fast delivery and shipping could rise, and returns could become far more strict because of sanitation issues.
SOCIAL MEDIA SHOPPING
We’ve been saying for years that young consumers are primed to shop on social media, and that platforms’ tools are slowly catching up with their desires. The majority of 13-37-year-old consumers tell us they are interested in social shopping, and purchasing items directly from their social media feeds, and 81% believe if you are posting a social media ad, there should be a direct link to purchase. Now, quarantines and the retail shut down has likely accelerated this trend considerably. Starting this week, Facebook and Instagram are allowing users to browse and buy products directly from business pages and profiles. The new tools enable small and mid-sized businesses to create a “full-fledged Facebook Shop”—and TechCrunch reports that a million have already signed up. The new shops will be featured on brands’ social profiles and shoppers will be able to place orders without leaving the apps, increasing the ability for young consumers to make quick impulse buys when they’re tempted by something on the platforms. (And YPulse research shows that Facebook and Instagram are two of the top places that they see ads that make them want to buy something.) Instagram Live has gotten incredibly popular with celebrities, influencers, and brands during the pandemic, and the new changes make those experiences more shoppable as well. According to Facebook’s announcement, “Soon, sellers, brands and creators will be able to tag products from their Facebook Shop or catalog before going live and those products will be shown at the bottom of the video so people can easily tap to learn more and purchase.” Facebook was reportedly inspired to launch the features in order to help small businesses who are struggling during the pandemic. It’s not the only way they’ve provided tools to help brands reach consumers during this time: Last month,Instagram teamed up with ChowNow to make food “shoppable” during the pandemic. TechCrunch reported that the app partnered with the Los Angeles-based restaurant ordering platform to add “Order Now” buttons and stickers on local restaurants’ photos and stories of their cuisine on Instagram to allow users to buy the food.
AR TRY ONS
We’ve told brands that they need an augmented reality plan to reach young consumers, and retail and fashion brands have been some of the early adopters of the tech—especially during COVID. As young consumers taste in fashion changes during COVID, brands are continuing to find easier ways to connect with them in quarantine and allow them to try outfits from home. This month, ASOS debuted an AR tool for online shoppers.Allowing them to see simulated views of models wearing the site’s clothing and accessories. According to Mobile Marketer, the brand will use the technology to digitally fit six models in up to 500 items each week. Since the company can’t currently work in their studios, they have been using flat shot images and product shots from models’ homes. It’s not a giant leap to imaging that this same tech will soon be used to allow customers to digitally try on clothing themselves. That’s already happening in the beauty world, where virtual beauty try-ons are surging during quarantine—and it could change the future of product testing. According to WWD, Ulta Beauty launched their GlamLab virtual try-on feature in 2016, but usage of it has increased during quarantine with more than 13 million shade try-ons in the last two months. As retail stores begin to reopen in parts of the country, the beauty retailer has been heavily marketing the tool to customers as a “convenient and safe alternative” to physical product testers. When quarantines begin to ease, augmented and virtual reality will likely remain a big part of the beauty and fashion industry.
BIG BRAND DTC
At the end of March, as the realities of quarantine were setting in, a YPulse survey on grocery shopping found that 60% of 13-39-year-olds agreed, “Right now, I’d like to buy products directly from brands online (instead of at stores or big box sites).” Just a few months later, brands began to step up, making direct-to-consumer a potential new norm for all brands. (Not just the indie upstarts who pioneered it.) PepsiCo has set up sites to sell snacks and drinks directly to young consumers. Their new PantryShop.com and Snacks.com sites are selling packaged goods brands like Frito-Lay, Quaker, Muscle Milk, Gatorade, Hilo Life, and more, directly to online shoppers. The brand tells Adweek they have seen a strong demand for their snacks during this time and wanted to “offer shoppers another alternative for easy and fast access to products they love.” A week after their DTC launches, snack startup PeaTos launched their own site to sell directly to the public: BetterSnacks.com. The brand’s CEO announced that “Now, as the world battles an unprecedented pandemic that is keeping people at home, the fight for snack share just headed online.” But Pepsi’s move didn’t just inspire a clever move from a competitor—it signals a future in which big brands and small brands alike sell directly to consumers who aren’t as likely to spend time in stores.
GROUP SHOPPING ONLINE?
The pandemic has made co-viewing and remote game playing a reality as young consumers try to stay connected to friends during quarantines—could online group shopping be next? That’s the future that Squadded Shopping Party wants to make a reality. Vogue Business reports that the new platform wants to make online shopping a social experience for Gen Z, encouraging users to shop online with their friends. Targeting 15-25-year-olds, the platform functions as a browser extension that lets young shoppers shop together from ecommerce sites like ASOS, Boohoo, Missguided, Na-kd, and Pretty Little Thing as well as interact with the brand’s community, explore new fashion trends, and ask for styling tips. In China, group shopping has seen a boost since the start of the COVID crisis, and it could be that co-shopping apps could be a success in Western countries as well as e-commerce becomes the norm.