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As consumers go into lockdowns, following the spread of the new coronavirus (COVID-19) pandemic, millions are forced to work from home and digital connectivity takes even more of a hold on everyday habits. As a result, these changes in routine are likely to accelerate the use of existing and new technologies and tools.

A Nielsen survey predicted that consumers may have greater motivations and fewer perceived barriers to more actively seek technology-enabled solutions to assist in everyday tasks like shopping. For some consumers this may be totally new behavior (such as shopping for groceries online for the first time), while for others this may mean increased online usage or the addition of new technology, tools and software.

“There is little doubt that consumers’ uptake of technologies to stay informed and safeguard their health can instill confidence in a stressful period, and this may be the unforeseen catalyst to assert broader, longer term adoption of technology platforms and solutions,” said Nicole Corbett, Nielsen Director of Intelligence.

Nielsen has examined recent data sets collected from consumers around the world who provided insights on their intentions as it relates to technology and reviewed it alongside developments in recent weeks tied to the COVID-19 outbreak. Through this research, Nielsen has identified three ‘catalyst moments’ that may change technology adoption horizons and drive changes in shopping habits.

 

COVID-19 - An Unlikely Tech Adoption Catalyst

 

Lockdown/limited store access propels online shopping

Globally, online shopping adoption has gained traction thanks to improvements in infrastructure (speed and cost), participation, transparency and trust. The pathway for adoption is a familiar story around the world.

“In many markets, the fashion, travel and entertainment categories have been the frontrunners for consumers to enter the online retail sphere, followed by the beauty and personal care categories as consumers became more comfortable and confident shopping online. But other grocery categories, particularly packaged and fresh goods, have been slower to gain traction in some markets. Today, however, COVID-19 may be a part of driving faster change.

A Nielsen investigation uncovered six key consumer thresholds that tie directly to concerns around the COVID-19 outbreak. The thresholds offer early signals of spending patterns, particularly for emergency pantry items and health supplies.

As many consumers around the world reach the third threshold, “pantry preparation,” they are increasingly opting for safer, non-physical stores. In examining a number of European markets that have been relatively slower to embrace online FMCG shopping before the pandemic, there are now notable spikes in e-commerce sales in recent weeks.

 

Interrupted supply chain directs consumers to manufacturers

With retail supply chains progressively challenged due to COVID-19 precautions, many consumers may have initially been faced with empty shelves when searching for high demand products both in-store and online. And this could compel some consumers to look for alternative online sources to find the products they need.

Direct-to-consumer (DTC) businesses have evolved at a rapid pace in the last few years, predominantly driven by smaller, often local players, who have identified niche segments or consumer needs, and recognize the advantages of direct consumer reach, powered by technology.

In addition to the benefits of distinctive engagement opportunities, a significant feature of the DTC model is using online shopping subscriptions to entrench brand loyalty. Automated subscription services provide ease, convenience, customized rewards, preferential pricing and remove the hassle of remembering to top up. In times of unease, consumers may be clamoring for certainty and guaranteed supply, directly from the makers of their preferred brands. Many DTC manufacturers are also mastering their service via quick personalized responses to questions and providing empathy for consumers’ needs and concerns.

In a recent Nielsen survey on tech-transformed consumption, four in 10 global online consumers said they were already using online shopping subscriptions, and a further 36% said they were willing to do so in the next two years—an indicator that changes to existing consumer shopping habits are emerging.

Corbett points out, “As shopping behaviour stabilizes post COVID-19, many consumers are likely to continue to embrace manufacturer-direct technology solutions. This represents an ongoing opportunity for big and small manufacturers to assess not only their engagement platforms, but also their sales channels.”

So why does this matter? Nielsen data shows that more than half (51%) of global consumers are willing to try A/VR to assess products and services. With consumers not able to physically visit stores, they will be looking for alternative entertainment and shopping experiences. Companies that can leverage A/VR may hold the answer to immersive augmented reality experiences that will transform engagement and shopping.

 

COVID-19 - An Unlikely Tech Adoption Catalyst

 

Preparing for a tech-enabled future

As the implications for consumers multiply, new learnings for retailers and manufacturers become evident. China has showcased how companies that harness powerful technology to enable consumers during adversity can become integrated into all aspects of peoples’ lives:

●   QR codes from We Chat and Alipay, leveraging location data from the telecommunications industry, are highlighting where individuals have travelled and provide real-time exposure to health risks.
●   Weibo is keeping consumers continuously updated and informed of events.
●   E-commerce options are promoting a growing reliance on their services among existing online shoppers and those that were previously hesitant.
●   Tech health screening for food delivery drivers is providing vital consumer reassurances.

Previously perceived technology obstacles and barriers to adoption may no longer be as indicative or insurmountable, as technology becomes some of the only accessible or viable alternatives to consumers. While not all markets may be as technologically advanced in the retailing areas as China and South Korea, many retail and manufacturing businesses around the world can benefit from a more proactive e-commerce strategy, as technology enabled solutions become even more sought after and preferred.

Progression in technology usage may start with the basic functionality offered by smartphones such as product discovery and mobile payments. As consumers become more comfortable with these tools, further advancements like auto-subscriptions and personalized location alerts will change the way consumers buy and speed up the adoption trajectory of more sophisticated tools like A/VR. And these will start to become more widespread as consumers recognize the advantages they can bring both in convenience and experience. Technology will be one of the most significant game changers for FMCG retailers and manufacturers in the immediate and longer term.

Source: Nielsen.com

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