The pandemic is reshaping the way people shop.
“We’re definitely seeing shoppers getting smarter,” said David Sykes, head of Klarna U.S., speaking about consumer demands for 2021 and beyond. “Smarter in what they’re buying, but also who they’re shopping from.”
Klarna — the Swedish banking company that allows shoppers to buy now and pay later and works with more than 200,000 retailers, including Coach, Ralph Lauren, Asos, Adidas, Sephora and Chanel — asked consumers about their shopping habits amid the pandemic, as well as which of those behaviors they think are most likely to stick in a post-COVID-19 world.
Some of the answers were not surprising: consumers are budget-conscious; care about a brand’s ethics and values (73 percent of shoppers said it’s important to shop sustainably); interested in health and wellness (of the roughly 4 million items wishlisted in the Klarna app during the third quarter, 90 percent of them were ath-leisure products), and are looking toward technology as the future of shopping.
But Sykes said what’s more important is how these trends are manifesting in consumer shopping habits.
Nearly two-thirds of shoppers surveyed said sales and deals were not just a strategy to manage finances, but their top financial strategy. “Which underpins the importance of targeting the right sales and the right deals to the right consumer,” he said.
Similarly, 79 percent of consumers said they would rather be healthy than wealthy. That means companies and brands that offer products focused on health — such as ath-leisure, beauty and wellness — have opportunity for growth. Shoppers purchasing beauty products, for example, increased 37 percent since the start of the pandemic, according to the Klarna survey.
The same goes for sustainable and eco-friendly products. Sykes said the 73 percent of consumers expecting to purchase sustainable products is much higher than in previous Klarna surveys.
“The concept of a brand’s value has always been important, but we think it’s becoming more and more important for consumers,” he said. “Brands that have a strand of social, corporate responsibility in what they do or what they sell, we definitely see them outperforming as they move forward.”
Meanwhile, technology is helping consumers feel more comfortable shopping. Forty-seven percent of shoppers feel more comfortable when contactless payment options, such as buy-online-pick-up-in-store, are available. More than 40 percent of shoppers are expected to do their holiday shopping from a smartphone this year. And services such as at-home try-ons and online shopping have only grown during the pandemic.
So much so that post-COVID-19, many retailers in the U.S. now expect their e-commerce businesses to grow from about a quarter or a third of the total business to about 50 percent of the total business.
“Our core thesis when we think of COVID-19 is that it has dramatically accelerated a bunch of trends that were already growing anyway: online shopping, the buy-now, pay-later space, the growth of the mobile app, growth of mobile shopping,” Sykes said. “Consumers now expect the same experience online as they enjoy in store. They don’t view it as two different shopping channels. Mobile is intermediating the shopping experience, whether it’s by digital payments, contactless payments, AR.
“It is harder to go into a store and try on an item,” he continued. “It is harder to consult with a beauty adviser. We expect AR to fill some of the gaps when it comes to these types of experiences that are just harder in a COVID-19 world. The brands that do well, it wasn’t overnight. For a long time they have been positioning their businesses to be more digitally oriented, to embrace new technologies — whether it’s through mobile payments or mobile apps. They had been thinking about technology for a while. When COVID-19 struck, they were in a position to move quickly and adapt faster than others.”