The key questions confronting retailers: how much of this new consumer behavior sticks and what does that mean for their businesses from now on? To find out, Accenture has been monitoring the evolving patterns of consumer thinking throughout the crisis, highlighting new habits and preferences in what we value and how we shop.

Shifting values

So what can we say about today’s consumers? With both the epidemiological and the economic outlook highly uncertain, they’re understandably focusing on their health, safety and finances. Confidence is still low, and the research shows a significant proportion of people aren’t yet comfortable returning to public places, including both essential and non-essential retail stores. Retail footfall remains below pre-COVID-19 levels in nearly all markets.

Consumers also have high expectations that businesses will act responsibly, taking decisions that benefit the common good, not just the bottom line. Retailers must be aware of this, showing they understand that people have very different needs right now. This is a time to prioritize initiatives that build trust, working with partners to develop new and more responsible ways of working. Consumers will notice how businesses respond.

There’s no place like home

One obvious consequence of the pandemic is that the home has become the heart of the consumer and social experience. By necessity, digital shopping has surged. Ecommerce purchases are expected to grow by 169 percent among new or low-frequency digital shoppers. And we’ve all become increasingly used to virtual socializing too (the research shows it’s become more prevalent across all age groups). Many of us have also seized the opportunity to take up new hobbies and build skills in areas like cooking, baking and gardening.

Retailers must accept that at-home and virtual commerce is the reality for the medium term. And, clearly, digital retail experiences need to be as differentiated as possible. But there are opportunities for creative thinking here too, such as serving home-based social occasions and newfound consumer hobbies and passions with new products and services. That might mean collaborating with other industries to bring together products, content, engagement and digital technology.

Shopping on a smaller scale

The pandemic has been an anxious and challenging time. It has also been a chance to pause, reflect, reconsider our values and rethink how we consume. One consequence of this is a growing trend for local shopping. The research suggests there are multiple factors behind this, including a desire to support neighborhood stores at risk of closure, as well as a preference for more cost-conscious and sustainable consumption.

Retailers should look to support local businesses, helping them through the crisis while also meeting consumer demand. Mid-range and value brands will be a key factor while shoppers are tightening the purse strings. It will also pay to reassess the whole value chain. Here too, collaboration with other industries can play a key role – this time by helping retailers unlock opportunities for creating and delivering conscious consumption initiatives.

In for the long haul

One conclusion is unavoidable: what’s happening now will define retail for the next decade. Many of the new behaviors we’re seeing are permanent. So it will be those retailers that can use their data to understand consumer needs, adapt quickly, act responsibly, think locally—and communicate all this effectively—that will thrive in the post-pandemic world.

On July 31, 2020, the Civic Caucus interviewed Bruce Nustad, president of the Minnesota Retailers Association (MnRA) by Zoom video conference. In a fascinating discussion, Nustad examines COVID-19's effects on Minnesota's retail sectors. Although realistic about the challenges, he says retail is an industry of survivors and he remains optimistic about its future.

Click HERE to access the complete Zoom recording on YouTube of Bruce Nustad's interview with the Civic Caucus.

A new feature, timestamped links beside each question, will take you directly to that moment of the interview. The links show up next to the questions as numbers, indicating the minutes and seconds in the recording where the questions are discussed. You can also access these links in the description section of the YouTube video by clicking "Show More."

MnRA is hosting our annual Retail Legislative Conference Call at 1:00 p.m. on September 1. On this call we take the information gathered through our annual policy survey and combine it with experiences from the past, conversations from the present, and a look at the future as we put MnRA's policy agenda together.

Thank you for adding your voice and perspective to MnRA's annual policy development process. 

From the National Retail Federation, August 17, 2020

Most families still don’t know what supplies students need for school and college this year, but more expect at least some classes to take place online than a month ago and say they are buying more computers and other items to be ready, the National Retail Federation and Prosper Insights & Analytics said today.

“Consumers still face a great deal of uncertainty even as school begins to start and are further behind in their back-to-school spending than they have been in years,” NRF President and CEO Matthew Shay said. “At this point, the majority of families expect to spend as much as they thought earlier this summer if not more, and it’s largely because of the need to spend more on electronics.”

An update of NRF’s annual back-to-class survey conducted in early August found 63 percent of consumers expect at least some school and college classes will take place online this year, up from 55 percent when the original survey was conducted in early July. Of those, 76 percent plan to make purchases specifically because of online learning, up from 72 percent. While the number planning to buy laptops is essentially unchanged at 37 percent rather than 36 percent, the number buying accessories such as a mouse or flash drive is up at 26 percent from 21 percent and the number expecting to buy desks or chairs to furnish home classrooms rose from 17 percent to 23 percent.

The survey found 34 percent expect to spend more than they thought in July, and 54 percent said that’s because they plan to spend more on electronics and computer equipment. But with growing children needing new clothes whether they are at school or at home and many supplies needed either way, 47 percent said they are spending more on clothing and 59 percent said the higher spending would come in the form of school supplies such as pencils and notebooks. Only 25 percent expect to spend less, and 42 expect to spend the same as they thought in July.

The update did not ask the actual amount consumers expect to spend. As of July, shoppers with children in kindergarten through high school said they planned to spend an average $789.49 per family for a total of $33.9 billion while those with college students planned to spend an average $1,059.20 per family, or $67.7 billion total.

Only 34 percent of consumers had received school supply lists by early August, up from 10 percent in July, but still leaving most waiting for more clarity before they could finish shopping.

K-12 shoppers had completed only 41 percent of their buying on average, down from 54 percent at the same time last year and the lowest level since 40 percent in 2012. College shoppers had completed 50 percent, down from 52 percent each of the past two years but higher than the 48 percent average over the past dozen years.

Among those who had not completed at least half their shopping, 46 percent of K-12 shoppers and 48 percent of college shoppers said it was because they did not know what they would need. For both groups, 46 percent planned to do the remainder of their shopping online, up from 34 percent at the same time last year for K-12 and 38 percent for college.

“With many schools still not clear on whether students will be in the classroom or learning at home, parents have to be prepared for both,” Prosper Insights Executive Vice President of Strategy Phil Rist said. “Nonetheless, a growing number of parents expect students to be at home.”

The survey of 7,569 consumers was conducted August 3-11 and has a margin of error of plus or minus 1.2 percentage points.

MnRA's popular TED-talk styled education and award event returns on October 7, only in a virtual format!

Save the date for Retail Rally as we change the way retailers and their key business partners engage with today's consumer! At this event you will hear six 20 minute practical, game-changing, cutting edge retail innovations strategies and ideas. In addition we will honor several organizations as "Minnesota's Retail Champions".

Watch your e-mail for more details on speakers soon!

A strong retail community is important during all seasons, but especially in times of uncertainty such as the conditions surrounding COVID-19. MnRA has a resource page for retailers on our website relation to COVID-19. 

Visit the page at https://www.mnretail.org/covid-19 for frequent state, local and federal updates as well as links to resources.