Consumer purchase habits & hybrid shopping reinvent retail
How will consumers shop in 2022? The answer: any way they want. From shop-online-pickup-in store, to direct-to-consumer and alternative payment methods, consumers can now shop from anywhere, in whatever manner they choose.
The pandemic created a crisis for the retail industry that acted as a catalyst for change. But many believe the last two years simply accelerated a transformation that was already underway.
Store closures gave way to an increase in ecommerce. Shopping services now deliver everything from cosmetics to take-out to the doorstep. “Shop online pickup in-store” and curbside services offer a contact-free way to get products fast. Direct-to-consumer (DTC) offerings target consumers with unique products. And buy now, pay later (BNPL) services offer consumers the ability to purchase now and pay over time.
It might all equate to a whirlwind for retailers and brands, but consumers are on board. The growth in hybrid shopping, which combines in-store and online purchase and delivery, has gained momentum and is by all predictions the future of retail. Hybrid shopping allows consumers to shop from anywhere, at any time, and in whatever manner they choose.
Hybrid shopping is here to stay
With hybrid shopping, the lines have blurred between traditional retailers and online brands. Both have moved to establish a presence in all channels and take advantage of consumer shopping sentiment. While consumers stand to win by gaining access to more products, brands need a new approach to understand what consumers want on this new hybrid journey.
As shopping habits evolve, it's critical for retailers and brands to understand changing trends and consumer preferences. Large brands have had a leg up with their ability to both track and drive consumer buying behaviors by keeping track of market movement.
But today, any company can tap into agile market research to understand consumer buying intentions and purchase preferences. Small DTC companies, like Warby Parker, have successfully navigated consumer shopping habits by uncovering insights from key target market segments.
We conducted a study1 of U.S. adults to uncover consumer shopping trends. Here are our findings:
Online or in-store? Consumers want both
Consumers have gotten used to the convenience and flexibility that hybrid shopping provides. Over half of consumers say they like shopping online and in-store equally. Whether it's shopping online and picking up in-store, or scouting a product in-person and ordering it online, hybrid shopping gives customers access to a wider range of options.
56% of U.S. adults say they prefer to shop both online and in-store
A lack of in-store presence might be a red flag for consumers. Almost a quarter of consumers say they are less likely to make an online purchase at a business that does not have an in-store presence.
88% of U.S. adults say it's important for a business to have both in-store and online purchase options
A better shopping experience drives purchasing
While hybrid shopping might have started as a response to the pandemic, consumers of all ages have latched on to the convenience. The leading driver for hybrid shopping? Reducing stress.
55% of consumers use in-store pickup because it's less stressful
Four in 10 adults are more likely to shop at businesses that offer flexible, in-person pickup options. Millennials are the most likely to have their purchase habits driven by pick up options, and Boomers the least. Just over half, or 51%, of Millennials say they are more likely to shop with a business that offers flexible pick up compared to 34% of Boomers.
65% of shoppers have gone in person to pick up after making a transaction online
The new shopping habits appear to be here to stay. In fact, 89% of consumers agree that businesses should continue to offer flexible in-person pickup options going forward.
Lines blur between DTC & traditional retail
Direct-to-consumer (DTC) brands, which saw huge growth during the pandemic, are expanding into new markets and hybrid models. Based on the consumer preference for both online and in-store options, many are complementing successful online efforts with a bricks and mortar presence in department stores, or at standalone retail locations.
24% of shoppers are less likely to purchase online at a business that doesn't have an in-store presence
Bonobos and Quip have forged partnerships with traditional retailers like Nordstrom and Target, while DTC pioneers Allbirds and Warby Parker have storefronts, nationwide.
At the same time, traditional retailers and brands are finding success by adding or switching to a DTC model. For example, Nike beefed up its web presence and reduced its bricks and mortar locations. The result? For Q4 2021, Nike’s direct-to-consumer fourth quarter sales increased 73% to $4.5 billion.
The shifts support our insights that customers overwhelmingly prefer businesses that have both in-store and online purchase options.
Flexible payment options driver bigger purchases
Retailers are also experimenting with payment alternatives to entice consumers to purchase. Buy now, pay later services (BNPL), a modern version of installment financing, are popping up in retail shopping carts, and consumers are taking the bait.
According to a Momentive study2, nearly one in four consumers say they are more likely to buy from a website or retailer that offers BNPL options. Gen Z and Millennials are the most likely to seek out retailers who offer the services, as are those with incomes below $50,000.
Recent studies show that consumers are likely to spend more and shop more often when using BNLP services. BNLP provider Klarna reported that 44% of shoppers would have abandoned their cart if a BNPL option, like Klarna offers, wasn’t available. And according to research from Adobe, which analyzed trillions of online transactions across 100 million product SKUs, consumers using BNLP services are placing orders that are 18% larger than purchases made with other payment methods.
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1Momentive study of 3,279 U.S. adults conducted November 15-17, 2021. Data is weighted for age, race, sex, education, and geography to reflect the demographic composition of the U.S.
2Momentive study of 3,353 U.S. adults conducted August 18-20, 2021. Data is weighted for age, race, sex, education, and geography to reflect the demographic composition of the U.S.