Shopping: Changes in consumer behavior force retailers to adapt

first_imgConsumer habits have rapidly changed since emergency measures were launched in mid-March to slow down the spread of COVID-19, prompting retailers to introduce new ways to engage with their customers.Roy Mandey, chairman of the Indonesian Retailers Association (Aprindo), said in Jakarta on April 16 that most of the association’s members saw a fourfold increase in transactions using apps or other delivery services as visits to physical outlets dropped.“The changing customer behavior is, of course, directly impacting our modern retailers,” Roy said, noting that transactions had plunged by 80 to 85 percent at nonfood retailers and by 30 to 40 percent at food retailers since the large-scale social restrictions (PSBB) policy was imposed on April 10. In response to the changing behavior, Roy went on to say, the bigger retailers increased hires or outsourced additional forces to support their in-house delivery services, whereas smaller retailers opted for partnerships with existing online delivery services.“Visits to modern retail stores still dominate, but because members of Aprindo now have distribution channels via phone apps, [these] are increasing during this COVID-19 [pandemic],” Roy said, emphasizing that, despite the shift to online-based services, the majority of consumers still chose to shop offline, mostly to ensure the quality of fresh produce they bought.Aprindo, which groups about 150 local and national retail companies with a total of around 45,000 outlets across Indonesia, is the largest association of the country’s retailers.A member of Aprindo, retail chain Hypermart, recently launched a novelty called the “Park & Pickup” feature. It allows customers to order their groceries via WhatsApp or the Hypermart online store and pick up their orders at the parking lot. “No need to get out of the car, because our staff will deliver the goods to the car,” Danny Kojongian, corporate communication director and corporate secretary of PT Matahari Putra Prima, the parent company of Hypermart, said on April 8, as quoted by Payments can be made using electronic payments to promote contactless shopping, although in-cash payment was still available, he noted.Recent studies have documented similar trends in the shift of consumer behavior, with conclusions suggesting that some consumer preferences formed throughout the pandemic are likely to remain in force even after the health crisis subsides, while other changes are reversible.According to a report published by McKinsey & Company this month – titled Reimagining food retail in Asia after COVID-19 – around half of the respondents have switched from their regular grocers during the pandemic, but 98 percent of them plan to go back.The top three factors for these consumers switching stores are: the new designation is closer to home (60 percent), the previous store has a lot of out-of-stock items (44 percent) and the consumer’s preferred brands have sold out (32 percent), according to the study.The study also showed that, aside from store location and availability of products, cleanliness will be among the most important factors for consumers when choosing a grocer in the next four weeks, as the bar chart below indicates.Although in-store visits are declining due to the large-scale social restrictions, the study suggests that grocery stores may benefit in the long run, as more consumers prefer groceries over restaurant dine-ins for their meal options in “a trend that could linger,” the study says.The same view is presented by a different report published by Mintel, a market intelligence agency. The report, titled How COVID-19 is impacting food and drink markets in Southeast Asia, indicates that “even after the current situation calms down, given the scale of the outbreak, and depending on the duration of lockdown measures, the pandemic is likely to leave an indelible mark on consumer lifestyles”.“This presents huge opportunities for grocery retailers to better engage with consumers through measures that bring added value and convenience in order to encourage more consumers to shop online now and continue the habit once cautionary measures lift,” Mintel’s Asia Pacific food and drink analyst Tan Heng Hong writes in the report. He pointed to behavior such as vigilance around immunity and hygiene, dependence on online grocery shopping and the habit of at-home cooking, as those that will stick around.Tech companies in online delivery services, including for grocery shopping, have seen a spike in demand in recent weeks.“We are seeing a corresponding uplift in our deliveries business such as GrabFood, GrabExpress, GrabFresh powered by HappyFresh, GrabMart, etc,” a Grab Indonesia spokesperson told the Post via a written statement on Friday, adding that GrabFresh, Grab’s grocery delivery service, had seen an increase in transactions, especially after the announcement of the recent social restrictions.Online delivery services, contactless shopping and cashless transactions will be a major theme for the future retail landscape, if it is not one already, with major chain stores already seeing customers opt for those services when made available.Based on data provided by Youtap Indonesia, an e-money service, one of its business partners, McDonald Indonesia, saw an increase in noncash transactions for its drive-thru services since the first week of the pandemic announcement and had now seen a fourfold increase with the average daily transaction value that surged by around 170 percent, according to a press release published on Friday.Topics :last_img read more