The corona pandemic has changed the world, and its effects will last. Especially for online shopping, the pandemic-induced changes have permanently altered consumer preferences and behavior. Especially the shift to online retail is real and here to stay. However, we believe that there are other important factors that will define the “new normal” especially for in e-commerce, including the return of consumer confidentiality, accelerated growth of online and multichannel shopping across categories, a (tentative) return of out-of-home shopping, lower brand loyalty of online shoppers and continued rebalancing and shift in supply chains.

Rebounding consumer confidentiality

Across the globe, consumer confidentiality seems to be coming back. Optimism of consumers has rebounded, despite reasons for the return of the virus in its delta variant. Various studies show that spend intend continued to grow across geographies over the last months. Especially in Italy, optimism about the economy among consumers has doubled between February 2021 and October 2021.

Growth of online and multichannel shopping across categories

Across regions, e-commerce has grown 2-5 faster in 2020 than in the 5 years prior to the pandemic. In most developed countries, at least every second customer is now an omni-channel shopper. This holds true for almost all product categories. Besides pandemic-induced changes, this trend is supported by the other factors, including the growing importance of the cyber 5 days – from Thanksgiving and Black Friday to Cyber Monday. Although we expect that in 2021, growth vs 2020 will not be as big as last year, the cyber 5 will lift online channels even more. However, supply chain obstacles are limiting retailers’ ability to secure enough inventory to meet demand.
How much of the pandemic-induced shift to online channels is here to stay is one of the most important – and most difficult questions – for retailers.

Tentative return of out-of-home shopping

We believe that there are indications that out of home shopping will be returning – although slowly and with different shopping behavior. Even if another lockdown is unlikely in most countries, consumers have structurally modified their behaviour when out of home and significantly reduced behaviours that are considered to be of higher risk. However, come November, we expect some of the holiday shopping to be back on the street, with holiday shopping starting even earlier than in previous years.
This will make Black Friday 2021 offline as well an even bigger event than in the previous years. However, we don’t believe that the growth will be as strong as in 2020, considering the huge spike in 2020 and the expected supply chain challenges.

Lower brand loyalty of online shoppers

Shop and brand loyalty are significantly lower online than offline. The pandemic has further accelerated an existing trend. With 75 % of US consumers trying a new shopping behavior, this trend has been reflected in a shattering of brand loyalties, with 36% of consumers trying a new product brand and 25% testing new private-label brands. Gen Z and high earners are most prone to switching brands.