What small businesses need to know

By Rieva Lesonski

It is becoming increasingly difficult for small businesses to meet consumer demands. Pre-pandemic and post-pandemic habits have merged, creating new consumer behaviors. I’m hesitant to call it “the new normal” because I’m not sure how much of this activity is entrenched, as many consumers seem willing to change at any time.

But small business owners also need to pivot and stay alert to changing retail consumer buying patterns.

Click and collect

There is no doubt that retail is at the center of the marriage of old and new. During the pandemic, consumers flocked to online stores, including millions of baby boomers who were previously loyal store customers. Today, 92% of baby boomers shop onlineand according MIVA buy everything from health and personal care products to electronics, home and garden items.

Fueled by the pandemic—boomers increased their online spending by nearly 50% in 2020 alone, according to NPD Group’s Checkout Tracking. And according to Statista, almost 90% of boomers scheduled to shop on Amazon this past holiday season.

Retailers who added click-and-collect services during the pandemic have seen a shift in usage. According to InsiderIntelligence/eMarketer, click-and-collect (including BOPIS – buy online, pick up in store, and pick up on the street) “no longer steal a significant dollar volume share from traditional e-commerce delivery or in-store shopping.” But that’s not because consumers have shunned it; instead, it’s “the status quo now,” and they expect the retailers (and restaurants) they frequent to provide it.

Convenience is key for these shoppers, says Morning consultation, so make it easy for your customers to shop and pick up their merchandise. That means plenty of parking and letting them choose their own pick up time.

Buy now, pay later

Another service that today’s customers want is the option to buy now pay later (BNPL). InsiderIntelligence/eMarketer says BNPL usage increased during the holiday season and will continue to grow. They predict that “by 2026, nearly 40% of internet users will have used a BNPL solution.”

Vouchers

American consumers have long used coupons. The difference is that today’s coupons are increasingly digital. In fact, InsiderIntelligence/eMarketer says 67% of Americans use digital coupons, and of those consumers, 90% access them on their smartphones.

But CouponFollow’s Millennial Shopping Habits: 2022 Trend Report reveals that 48% of millennials (the country’s largest generation of consumers) prefer to receive their coupons via email. They also like to receive percentage coupons (35%) instead of dollar rebates (19%).

Coupon use rises in times of economic uncertainty as the Digital Coupon Report says “brand loyalty fades as prices rise,” and “cost-conscious millennials looking for the best deals can introduce discounts [them] to new brands and encourage them to buy more.”

Loyalty Programs

While loyalty programs aren’t new either, today’s consumers aren’t thinking “the old-fashioned approach” loyalty programsworks for them. Instead, they are looking for more value. Seventy-eight percent of consumers say that good loyalty programs influence their purchases or make them more likely to do business with a company. This is important because rising costs have made 58% of consumers less likely to be loyal to a company, and 65% have canceled membership-based programs to cut costs.

Yet loyalty benefits or programs are so important to 52% of consumers that they are willing to allow companies to add tracking cookies, according to a survey. Braze/Dynata Study. That research also points to the conflict consumers have about protecting their information online. While 61% say they are very concerned about online privacy issues, and 49% say data privacy is more valuable to them than personalization, 53% of consumers expect a unique and personalized experience every time they interact with a business, regardless of the medium (in person, through social media, chat functions, etc.).

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Product discovery

The surge in online shopping caused by the pandemic has also changed the way consumers discover the products they want to buy. a Jungle Scout report shows that most consumers (61%) start their product hunt with Amazon rather than a search engine. Search engines come in second (49%), Walmart.com comes in third (32%), while YouTube (20%) and Facebook (19%) round out their top five picks. So consider expanding your store and/or e-commerce site by listing some products on Amazon.

Of course there are other ways to reach consumers looking for new products. There are some generational differences. HubSpot reports that:

• 39% of Gen X consumers search the web for new products.
• Online search is also important for millennials when looking for new products (ranked second). Consider using paid advertising and adopting a solid SEO strategy to reach them and Gen X consumers. Social media, through advertisements and sponsored content, is their first choice for product discovery.
• Gen Z also enjoys discovering new products on social media, but prefers watching short videos.

Hybrid shopping

An article from momentum says that “the lines between traditional retailers and online brands have blurred” and that hybrid shopping is here to stay. A recent survey shows that 56% of consumers want the option to shop online and in-store, and almost a quarter are less likely to make an online purchase from a business without a retail location.

Momentive concludes, “While hybrid shopping may have started in response to the pandemic, consumers of all ages have clung to the convenience. The main driver for hybrid shopping? Reducing stress.”

And an easy and stress-free shopping experience will attract more customers to your business.

About the author

Rieva Lesonsky is CEO of GrowBiz Media and SmallBusinessCurrents.com and has been dealing with small businesses and entrepreneurship for over 30 years. Get a better understanding of business trends by signing up for her free currents newsletter.