Covid-19 and subsequent measures implemented to flatten the curve have altered the way consumers think and businesses function. The term “business as usual” has become a thing of the past. Let’s discuss the prevailing consumer behavior trends as well as business strategies that merchants like yourself can adapt to accordingly.
Online and Offline Shopping
Today, we live in an experience economy where customers want to always be connected and have access to an array of options. In the current climate of increased smart spending and online shopping, ease of usage, and an interactive experience: what does this mean for businesses?
Now more than ever, businesses must strive to earn the trust of their customers. This can be achieved by the means of ensuring the availability of inventory, creating a secure and comfortable shopping experience (online and offline), and delivering a consistent level of service.
According to the 2019 Salesforce report, 67% of customers use multiple channels to complete a single transaction. This entails that businesses offering a single channel for customer engagement are delivering a substandard shopping experience. On that note, did you know that 76% of Southeast Asian customers switch brands after just one bad customer experience?
Therefore, while e-commerce continues to grow exponentially, brick-and-mortar stores play a vital role in creating a wholesome shopping experience for customers. Physical stores offer a tactile and sensory experience that an online store is yet to be able to recreate for customers. Thus, an omnichannel strategy would hugely benefit businesses by uniting their physical and online channels. Marrying both channels, will reinforce a business’s strengths and create a unified customer experience across all channels.
The rise of Buy Now, Pay Later
Recent world events have driven consumers to behave and think differently. Overnight, consumers have become more cautious and aware of their spending habits and the platforms where they are spending their money on. The financial uncertainty instilled a sense of wariness about the fickle nature of money which has led consumers to seek more convenient and alternative payment methods.
As a result, Buy Now, Pay Later (BNPL) was born and has become an increasingly popular way for consumers to pay for purchases due to various influencing factors such as:
- BNPL is a digital solution that has made it possible for consumers to pay for their purchases in smaller amounts over an agreed period of time, rather than in an upfront payment.
- This digital solution bridges the gap between traditional banking and individuals without bank accounts. BNPL enables these consumers to make emergency purchases or unexpected purchases as the approval time is fast and easy.
- By giving consumers the opportunity to not commit to the full price and instead opt for smaller payment options, BNPL enables consumers to purchase goods they would not have been able to otherwise. This also feeds into the psychology of instant gratification where a consumer is able to enjoy their purchases without delay or hassle of paying an upfront fee.
- BNPL offers merchants the opportunity to cultivate customer loyalty, higher conversion rates, increased basket size, and overall, better customer experience.
Many fintech companies are jumping on the bandwagon to implement BNPL solutions alongside traditional payment methods. On a global scale, BNPL is gaining momentum as an alternative payment method and Asia Pacific is predicted to be the fastest-growing market for this solution due to the increasing number of Internet users in the region.
In a nutshell
The pandemic has escalated the already emerging trend of online shopping and left a lasting impact on consumers’ spending behaviors. This has encouraged experimentation and provided access to a variety of products and services to consumers from the convenience and safety of their homes. Strict confinement measures coupled with unemployment rates increasing have instilled a sense of financial uncertainty resulting in a change of consumer behavior and approach to businesses. To thrive and succeed in this new normal, businesses must evolve and take cues from consumers’ ever-changing behaviors and preferences.