HOW DOES TODAY'S CONSUMER ENGAGE AND PURCHASE? - Toshiba Global Commerce ...
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1
HOW DOES
TODAY’S CONSUMER
ENGAGE AND PURCHASE?
APRIL 2021
Rance M. Poehler | President and CEO, Toshiba Global Commerce Solutions
Karen Webster | CEO, PYMNTS
© 2021 PYMNTS.com | All Rights Reserved 1
What we wanted to know 2
Do United States consumers want a Do consumers already use new methods Are consumers interested in using new
digitally enabled shopping experience? and technologies to buy grocery, retail digitally enabled retail shopping
and pharmacy products? experiences and, if so, which ones are
most appealing?
Research Methodology
How Does Today’s Consumer Engage And Purchase?, a PYMNTS and Toshiba collaboration, presents insights from a census-balanced survey of more than 2,000 consumers conducted from March 8, 2021 to March 14, 2021,
regarding their shopping experiences at grocers, pharmacies and other retail stores. The stats for our complete sample have a maximum margin of error of 2.2 percentage points for a 95 percent confidence level.
© 2021 PYMNTS.com | All Rights Reserved 2The short answer: Yes — and the ones that save them time 3
• Consumers have honed their digital skills over
This new, digitally
the last year across all aspects of their lives,
from working to going to the doctor to buying
food, pharmacy and retail products.
empowered consumer is
• Over the last twelve months, 40 percent of the
rewriting the ground
adult population in the U.S. has shifted to digital
— doing more on digital channels and less in
rules for retail
the physical world — across the grocery, retail
engagement, regardless
and pharmacy categories.
of the channel she uses
• Nearly 90 percent of those consumers say they
will keep all or most of those digital habits
post-pandemic.
to make her purchases.
© 2021 PYMNTS.com | All Rights Reserved 3Digital isn’t a channel: Digital is now the consumer’s shopping experience, even in the store 4
What’s driving this shift: Retail’s best customers are Convenience has been Certainty drives consumer Saving time is the new sticky:
New habits and patterns have now up for grabs: Digital has redefined: Consumers use channel and merchant Consumers like living in a
been formed since March forever changed the shopping new channels to skip trips to choice: Clean and safe is now “bring it to me” economy.
2020. journey. the store. a key visual cue.
Digital habits bifurcate Consumers expect stores to Millennials are not waiting for Digital has leveled the retail Consumers still default to
consumer shopping up their digital games: More retailers to change: They are playing field: Saving time and category leaders: Experience
behaviors: Purchase risk like eCommerce, less like using new retail experiences delivering certainty will shape builds trust and certainty.
influences channel choice. physical stores. today. retail’s future.
© 2021 PYMNTS.com | All Rights Reserved 45
BRIDGE BABY BOOMERS
GENERATION Z MILLENNIALS MILLENNIALS GENERATION X AND SENIORS
Year of birth: Year of birth: Year of birth: Year of birth: Year of birth:
1997 or later 1981 to 1996 1978 to 1988 1965 to 1980 1964 or earlier
Current age: Current age: Current age: Current age: Current age:
24 or younger 25 to 40 33 to 43 41 to 56 57 or older
Note:
Generations are defined by year of birth. The bridge millennial cohort is an overlapping of two neighboring generations, millennials and Generation X. Members of this group experienced the internet at a young age and are old
enough to be in their prime earning and spending years.
© 2021 PYMNTS.com | All Rights Reserved 5What’s driving this shift: 6
New habits and patterns have been formed since March 2020. Consumers shopping for
groceries at home
40%
29.6%
30%
What consumers who have
been working more from home
• The pandemic accelerated a shift to digital that since the pandemic’s onset will 20%
26.4%
do
will permanently alter how consumers shop and 13.1%
8.8%
which channels they use to make purchases. 10%
73.6%
Maintain at least some chang es
Revert all 0%
2018 2019 2020
• Time and day shopping shifts: A lack of commutes
makes delivery of products, including groceries,
US retail sales annual growth rates (trailing 12 months)
during the week more practical. 40%
30%
20%
• Explosive growth in eCommerce: Up 32.4 percent
10%
versus physical store growth of minus 0.2 percent.
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
-10% 2019 2020
Retail eCommer ce Physical
© 2021 PYMNTS.com | All Rights Reserved 67
• Duration of the pandemic: Longer than most businesses think with • Brands see the shift it in their own numbers: eCommerce
more time for consumers to live in a mostly digital world. growth dwarfs instore sales, even as stores reopen.
Date when pandemic is predicted to end based on when the prediction was made
In-store growth
Online growth
(same store comps)
Mar ch 1 7 138
Mar 2 4 177
Mar ch 2 7 145
Apr 6 150
12.3% 225.0%
Apr il 11 178
Apr 20 199
10.6% 118.0%
Date when consumers/firms were asked
Apr il 27 213
May 8 193 Consumers
May 2 3 270
Merchants
Jun 1 8 218 6.9% 118.0%
June 22 326
July 17 371
Aug 1 0 248 12.4% 89.3%
Aug 1 2 370
Aug 3 1 357
Sep 15 385 8.6% 69.0%
Oc t 01 367
Nov 11 423
Nov 16 385
25.0% -
Nov 18 253
De c 7 394
Ja n 4 388
17.0% 86.2%
Ja n 22 400
Feb 17 245
Feb 26 389
Mar 8 335
J-22 -11.0% 22.0%
J-21
J-21
J-21
J-20
J-20
M-21
M-21
M-20
M-20
D-21
D-20
F-21
M-22
M-22
F-22
O-21
N-21
O-20
N-20
S-20
A-22
A-21
A-21
S-21
A-20
A-20
5.0% -
Date when pandemic will end
© 2021 PYMNTS.com | All Rights Reserved 7Retail’s best customers are now up for grabs: 8
Digital has forever changed the shopping journey.
Consumers shifting from in-store shopping to digital channels
50%
39.5%
40%
• 40 percent of American consumers did more digital 30%
shopping and less physical shopping in 2020.
20% 15.8%
12.3%
10%
0%
• Nearly 90 percent of those digital shifters say that Grocery Pharmacy General retail
“some” or “all” of these habits are permanent.
Shifters that will maintain or revert behavioral changes
100%
11.8% 12.1% 15.8%
• The digital shift is less marked for essential
80%
services retailers, such as grocery and pharmacy,
60%
than general retail.
88.2% 87.9% 84.2%
40%
20%
0%
Grocery Pharmacy General retail
Maintain Revert
© 2021 PYMNTS.com | All Rights Reserved 89
• Those who shifted the most are Demographic data
Complete Shifters: Shifters: Shifters:
Digital shifters Nonshifters
responses grocery pharmacy general retail
retailers’ most highly valued
Female 52.7% 58.7% 58.9% 65.3% 58.9% 50.6%
customers.
Average age 49.1 47.4 47.0 48.6 48.1 49.5
College 32.6% 39.3% 36.7% 38.7% 38.6% 30.4%
$49.9K or less 33.0% 29.8% 28.4% 25.2% 29.4% 34.2%
FEMALE AFFLUENT Annual income $50.0K - $99.9K 31.8% 31.5% 35.3% 32.1% 31.8% 31.8%
$100.0K or more 35.2% 38.7% 36.3% 42.7% 38.8% 34.0%
Generation Z 10.2% 10.8% 18.4% 12.0% 11.2% 9.9%
Millennials 28.0% 30.8% 25.4% 26.4% 29.3% 27.6%
MILLENNIALS BRIDGE
Generation Bridge millennials 19.3% 23.4% 14.1% 18.8% 20.8% 18.8%
MILLENNIALS
Generation X 24.7% 27.3% 23.0% 25.7% 25.8% 24.4%
Baby boomers and
37.0% 31.0% 33.2% 35.9% 33.7% 38.1%
• American retailers’ best customers seniors
are now up for grabs as the shift to Married with children 31.9% 38.4% 37.1% 32.7% 36.5% 30.3%
digital offers retailers an opportunity Married without children 35.2% 32.1% 29.0% 35.7% 33.9% 35.6%
Family
to connect with consumers online.
Single with children 8.1% 8.6% 12.6% 11.1% 8.6% 8.0%
Single without children 24.8% 20.9% 21.3% 20.5% 21.1% 26.1%
© 2021 PYMNTS.com | All Rights Reserved 9Convenience has been redefined: 10
Consumers use new channels to skip trips to the store.
Number of consumers who use select shopping methods or are interested in using them
(millions of U.S. adults)
120
• All consumers report significant
interest in newer retail shopping 101
100
methods that eliminate traditional
in-store visits. 80 81
37
80
71
26 28
60
29
• 53 million U.S. consumers set up
automatic refills for products 40
they buy frequently. 65
55 53
20 41
-
Purchasing grocery products Using an online order pickup Setting up an automatic refill Purchasing nongrocery
online directly from and delivery service, s uch as or subscription arrang ement products online directly from
manufacturer Instacart manufacturer
I us ed it during last year I do not use it, but I am interested
© 2021 PYMNTS.com | All Rights Reserved 1011
Consumers who use select shopping methods or are interested in using them
50%
• Millennials and bridge millennials are the most likely
39.9%
40% to adopt the use of delivery services, such as
31.7% 31.8%
14.4%
Instacart.
30% 27.8%
10.2% 11.0%
20%
11.5% • Generation Z shoppers are also most likely to
purchase nongrocery products directly from the
25.6%
10% 21.5% 20.8%
16.3% manufacturer.
0%
Purchasing grocery products Using an online order pickup Setting up an automatic refill Purchasing nongrocery
online directly from t he and delivery service, such as or subscription arrang ement products online directly from
manufacturer Instacart the manufacturer
I used it during the last year
I do not use it, but I am interested
For Generation Z For millennials For bridge millennials
80% 80% 80%
63.4%
56.6% 57.7% 55.7% 56.6%
60% 60% 60%
19.8% 49.4% 47.5%
45.8% 46.6% 46.2% 45.1%
17.2% 18.3% 16.1% 17.6%
40.2%
40% 40% 17.9% 40% 16.3%
19.1% 20.1% 17.3% 18.5%
17.5%
20% 43.6% 20% 39.5% 39.4% 20% 39.6% 39.0%
26.7% 31.5% 28.9% 31.2% 26.6%
22.8% 26.4%
0% 0% 0%
© 2021 PYMNTS.com | All Rights Reserved 11Certainty drives consumer channel and merchant choice: 12
Clean and safe is now a key visual cue.
Top factors that became more important to in-store shopping since the pandemic's onset
50%
• “Do you have what I want?”
is still important, but “is your
40% 38.9%
37.8% 37.3%
store clean and safe for me 36.0%
to shop in?” is now the most
30.5% 30.2% 29.8%
important factor for 30% 28.4%
consumers.
20% 18.6%
17.2% 17.5%
16.1%
12.5% 12.3% 11.8%
11.1%
10%
3.8% 3.5% 3.2% 3.5%
0%
Trust/relationship with Ease/convenience Quality/products Value/price Cleanliness/safety of store
merchant
Groceries Pharmacy General retail Average
© 2021 PYMNTS.com | All Rights Reserved 12Reasons for buying online
13
80%
60%
41.5%
37.4%
40% 34.7%
28.4% 28.7% 30.0%
• Consumers who shop online do so 20.2% 21.3%
25.4%
20%
because they can get the items
2.9%
they want when they want them. 0%
Other Access to Canno t get to No interaction Getting ideas No time to Viewing store Do not need Better pricing Better
higher qual ity physical store with sales abo ut o ther shop in selection to see or selection of
pro ducts location emplo yees pro ducts physical store handle the pro ducts
physical
pro duct
Reasons for buying in store
• Consumers who choose to shop in 80%
66.5%
stores do so for the high 57.1%
60% 54.0%
consideration products they need 43.5%
40%
or want to inspect before they buy
22.9%
or because they want to speak 20%
18.6%
with a sales associate before 1.2%
0%
making a purchase. Other Interact ion with Better pricing Getting ideas I need to be sure Viewing s tore I need to see or
sales employees about other about t he product selection handle the
products quality physical product
© 2021 PYMNTS.com | All Rights Reserved 13Saving time is the new sticky: 14
Consumers like living in a “bring it to me” economy.
Share of consumers who said they are using select shopping methods “more” or
“less” in response to the pandemic, and net change
• “Go get it” has been replaced with Average net change, by generation
50%
“bring it to me” for all consumers,
40.1%
not just digital natives. 40%
35.2%
38.3%
36.3%
31.3%
30% 26.8%27.6%
25.6%
23.7%
21.5%21.9% 20.9%
20% 17.5% 16.9%
15.7%
13.4%
• Consumers largely do not like to 9.8% 10.5%
9.0% 9.5%
10% 6.2% 6.3%
buy online with in-store pickup, 0.9%
0%
even if retailers do. -1.1%
-10%
-8.4%-7.7%
-12.4%
-13.7%
-15.3%
-20% -18.1%
-30%
Use online order Buy online with Buy online with Buy online with Buy in store
and deliver in-store pickup curbside pickup home delivery
service
Average net change Baby boomers and seniors Generation X Bridge millennials Millennials Generation Z
© 2021 PYMNTS.com | All Rights Reserved 1415
• The grocery sector gained its highest increase in buy • Buy online with home delivery was boosted most in the
online with home delivery, including the use of new retail sector (38 percent).
digital intermediaries, like Instacart.
Grocery Pharmacy General retail
15.4% 17.0% 15.6%
Buy in store -34.2% -23.2% -28.5%
-18.8% -6.2% -12.9%
35.4% 25.8% 37.5%
Buy online with home delivery -8.1% -8.8% -6.8%
27.3% 17.1% 30.7%
28.4% 22.8% 24.7%
Buy online with curbside pickup -9.8% -8.2% -8.3%
18.5% 14.7% 16.4%
19.1% 19.0% 21.7%
Buy online and pickup in store -14.4% -12.7% -13.1%
4.7% 6.3% 8.7%
23.1% 19.4% 20.7%
Use online order and delivery
-9.0% -8.4% -6.3%
service (like instacart)
14.1% 11.0% 14.4%
-40% -20% 0% 20% 40% -30% -20% -10% 0% 10% 20% 30% -40% -20% 0% 20% 40% 60%
More Less Net More Less Net More Less Net
© 2021 PYMNTS.com | All Rights Reserved 15Digital habits bifurcate consumer shopping behaviors: 16
Purchase risk influences channel choice.
Net change in purchases since the pandemic Consumers who have a strict
started* preference for online shopping
Cleaning supplie s 40.5% 20%
Gr oce ries or food 29.6% 10%
• Products with the highest online preferences Phar maceutical products 11.8% 18%
are also low-risk online purchases. The value Books or music 2.0% 29%
of the purchase is low while the convenience Hobby, toys or g ames -1.3% 32%
is high: Hobby/toys/games, sporting goods, Ga rden produc ts -6.6% 21%
books/music and office supplies. Of fic e supplies -9.7% 28%
Ele ctr onic s -10.2% 24%
-10.5% 20%
• Products with high perceived purchase risk — Building mat erials or har dwa re
-10.8% 24%
where the risk of buying online is high and the Beauty produc ts
-11.6% 30%
value of the purchase is high — will most likely Sport ing goods
Applia nce s -13.8% 18%
be purchased in store: Groceries, cars,
-15.7% 14%
appliances and clothing. Ne w or used ca r
Aut o part s or supplies -15.8% 25%
Home furnishings or de cor -17.4% 21%
Clot hing a nd acc essories -18.6% 18%
-40% -20% 0% 20% 40% 60% 0% 10% 20% 30% 40%
*Net change = (share purchasing more often) - (share purchasing less often)
© 2021 PYMNTS.com | All Rights Reserved 1617
• Digital makes it easy for consumers to buy from different brands,
even directly from brands, further diluting retailer loyalty.
Share of consumers citing select reasons for preferring to buy online
50%
41.5%
40% 37.4%
34.7%
30.0%
30% 28.4% 28.7%
25.4%
21.3%
20.2%
20%
10%
2.9%
0%
Other Access to higher Cannot get to No interaction Getting ideas No time to shop in Viewing s tore Do not need t o Better pricing Better selection of
quality products physical s tore with sales about other physical s tore selection see or handle the products
location employees products physical product
© 2021 PYMNTS.com | All Rights Reserved 17Consumers expect stores to up their digital games: 18
More like eCommerce, less like the physical store.
Elements that are “very” or “extremely” important when shopping in store For millennials and bridge millennials
Informatio n abou t cu rrent available invento ry or 48.4%
8.4% 29.9% 38.2%
out-o f-stock items 50.3%
• A convenience-driven consumer who
50.2%
wants to save time wants a real-time, Product reviews 7.0% 29.4% 36.4%
51.7%
transparent view of product availability, as 50.6%
Consumer reviews 7.7% 28.6% 36.3%
51.7%
is the case online.
Scan shelves or products for offers and instant 43.2%
5.4% 25.8% 31.3%
redemption coupo ns 43.7%
• Consumers want more control over their Recommendation fro m frien ds or family 6.2% 22.5% 28.7%
39.1%
43.6%
ability to interact digitally with the store
49.0%
En gage with a merchant via own device 6.7% 22.0% 28.6%
merchant in real time when in the store — 50.5%
Store my preferences for future sh opping using 40.4%
just like they have been doing online. profiles or on line sho pping lists
4.5% 23.5% 28.0%
44.1%
En gage with a merchant via p hone, email, text, 42.3%
direct messagin g via web site, social med ia o r 8.8% 18.0% 26.8%
online chat 42.4%
• They want to do so on their own devices,
Merch an t-sp ecific app for person alizing and 45.0%
2.9% 23.4% 26.3%
not on ones the retailers provide. tracking my shopp in g experience 44.3%
Fill up my cart online and then have it ready fo r 42.0%
2.9% 22.4% 25.4%
me in the ph ysical store 41.9%
• Getting millennials and bridge millennials
En gage with a merchant via a store-provided 38.9%
3.2% 19.7% 22.8%
device
inside stores will require that retailers up 39.2%
Connect through new formats, such as Amazon Go 41.2%
their digital games. or Amazon Dash Cart
3.6% 18.6% 22.2%
41.8%
0% 20% 40% 60% 0% 20% 40% 60%
Most import ant Rest Bridge millennials Millennials
© 2021 PYMNTS.com | All Rights Reserved 18Millennials are not waiting for retailers to change: 19
They are using new retail experiences today.
Consumers who are “very” or “extremely” By generation By family
interested in select shopping methods
• Millennial consumers are most likely
14.8% 20.3%
favor newer retail experiences that Purchasing nongrocery products 20.8%
41.1%
online directly from t he 24.5% 38.0%
13.6%
limit time in stores or eliminate store manufacturer 36.5%
36.1% 35.5%
visits altogether.
6.7% 14.7%
Using an online order pickup 15.9%
32.8%
and delivery service, s uch as 21.0% 40.1%
• Millennials want to better manage Instacart 40.6% 6.1%
31.0% 39.1%
repetitive retail shopping tasks that do
not require in-person goods 10.5% 14.2%
17.3%
Setting up an automatic refill or 29.4%
inspection, such as nongrocery items. subscription arrangement
20.3% 32.7%
32.7% 9.8%
28.7% 34.2%
• Married couples with children were 8.7% 15.7%
Purchasing grocery products 14.5%
most likely to express interest in online directly from t he 19.0% 32.9%
26.9%
manufacturer 34.6% 8.4%
purchasing groceries directly from the
24.7% 31.4%
manufacturer and automatic refill
0% 20% 40% 60% 0% 20% 40% 60% 0% 20% 40% 60%
options.
Baby boomers and seniors Single without children
Generation X Single with childr en
Bridge millennials Married without children
Millennials Married with children
Generation Z
© 2021 PYMNTS.com | All Rights Reserved 19Digital has leveled the retail playing field: 20
Saving time and delivering certainty will shape retail’s future.
Reasons for being interested in select shopping methods
60%
• Retailers can no longer assume that loyalty
programs alone are enough to keep 52.6%
50% 47.3%
customers loyal. 45.5% 45.1% 45.3%
46.1%
44.1% 43.8%
41.3% 42.3%
41.1%
40.1%
40% 37.7%
36.2%
• Digital lowers the switching costs for 34.4% 35.2%
32.4%
consumers looking to access the brands 29.7%
30%
26.3%
and channels that save time and deliver 24.5%
certainty.
20%
• Retailers capable of adopting digital-first 10%
practices that make in-store shopping 2.5% 2.2% 1.6%
3.4% 2.5%
more like online shopping have the best 0%
Other Won't run out of necessary Paying les s Minimize shopping in More convenient or easier
chance of recapturing lost audiences. products physical s tores
Purchasing groceries online directly from the manufact urer (N = 1,270)
• The longer that takes, the greater the risk
Purchasing nongrocery products online directly from the manufacturer (N = 1,636)
that retailers will lose the chance to Setting up an automatic refill or subscription arrangement (N = 1,227)
influence consumers’ shopping journeys Using an online order pickup and delivery service, such as Instacart (N = 1,174)
and optimize that spend. Average
© 2021 PYMNTS.com | All Rights Reserved 2021
Top factors that became more important to in- Reasons why inventory check capabilities are Reasons why the availability of a merchant-specific
store shopping since the pandemic's onset important app is important
37.3%
Makes s hopping easier and mor e Makes s hopping easier and mor e
38.9% 60.7% 55.5%
Cleanliness/safety of store convenient convenient
37.8%
36.0%
29.8% Need more information 30.2% Multiple ways to track information 33.2%
28.4%
Value/price
30.2%
30.5%
Multiple ways to track information 21.7% Need more information 29.6%
17.5%
17.2%
Quality/products
16.1%
18.6% Difficulty of knowing which Difficulty of knowing which
15.0% 20.5%
merchant to use merchant to trust
11.8%
12.3%
Ease/convenience
12.5%
Difficulty of knowing which Difficulty of knowing which
13.6% 17.1%
11.1% merchant to trust merchant to use
3.5%
Trust/relationship with 3.2%
merchant 3.5% Other 4.4% Other 2.0%
3.8%
0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80%
Average
General retail
Pharmacy
Groceries
© 2021 PYMNTS.com | All Rights Reserved 21Consumers still default to category leaders: 22
Experience builds trust and certainty.
Last grocery purchase from select Last pharmacy purchase Last general retail purchase
mass merchants from select mass merchants from select mass merchants
• Consumers stick with brands they know Walmart 30.7% 11.1% 30.3%
and trust in times of uncertainty.
Kroger 8.4% 2.9% 1.1%
• New technologies can create powerful
two-way communication channels that
Amazon 3.6% 1.3% 15.1%
capture important data about consumers’
preferences and expectations.
Target 3.0% 1.3% 10.2%
• Store economics must better align with
Costco 1.5% 0.5% 2.4%
consumers’ preferences: make it
convenient means mostly delivery, then
CVS 0.3% 31.8% 0.9%
curbside pickup — and, if in store,
information about product availability.
Walgreens 0.1% 22.3% 0.9%
• Digital has leveled the retail playing field,
but logistics will determine success. Home Depot 0.0% 0.0% 2.1%
0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 0% 10% 20% 30% 40%
© 2021 PYMNTS.com | All Rights Reserved 22You can also read
