Retail Anatomy Of Change - Oracle

RetailAnatomy of ChangeUnderstanding Consumer Behaviorin the New Next 2020

Anatomy ofMethodologyThe research cited in thisreport was conducted in2020 with more than 5,000consumers across four keyregions, including Europe(France, Germany, Italy,United Kingdom, UnitedArab Emirates), APAC(Australia, China), LATAM(Brazil, Mexico), and NorthAmerica (United Statesof America).ChangeIndependent researchand creative consultancyUntold Insights conductedthe research on behalf ofOracle Retail, which explores consumer attitudesand expectations regardingthe retail shopping experience now and in the future.This report is based on thefindings of the global surveyof consumers.Understanding ConsumerBehavior in the New Next 2020Introduction2020 has been a year to remember and to forget. The pandemic had a dramatic impact on the retailindustry and the consumer experience. Consumer expectations — online and offline shoppingexperiences — have dramatically influenced and inspired new behaviors for consumers. The year remainsdynamic and unexpected, continuing to redefine what it means to have a superior consumer experience,from speed and selection to safety and sanitation.This report examines three critical factors impacting consumer behavior as global conditions havechanged–the pandemic effect, the social influence, and the holiday impact–and how retailers cananticipate, embrace, and thrive in the New Next.World map regions, indicated by color,LATAMcorrelate to the list of countries included- Brazilper area surveyed.- MexicoNorth America: United States of AmericaLATAM: Brazil,MexicoEurope- FranceEurope: France,Germany, Italy,United Kingdom,United Arab Emirates- Germany- Italy ChinaAPAC: Australia,- United Arab EmiratesJAPAC- Australia- China2Anatomy of Change: Understanding Consumer Behavior in the New Next 2020

The Pandemic EffectAs the COVID-19 virus spread and lockdowns tookeffect, retailers saw consumer priorities change inparallel. Initially, consumers moved en masse to onlineshopping platforms, with a clear preference for homedelivery and other alternative fulfillment options forboth essential and nonessential items. While theseshifts continue, as restrictions on in-store shoppinglift, consumers of all ages are beginning to return toretail locations where they feel their safety is a priority.Consumers demanded a new delivery experience thatbrought the digital and physical experiences together.As we approach end-of-year holidays, retailers mustbe agile to meet the online and in-person demands ofconsumers over an extended shopping season.3Anatomy of Change: Understanding Consumer Behavior in the New Next 2020The Holiday ImpactThe Social InfluenceSocial distancing protocols may drive physicalseparation, but they naturally haven't dampenedthe desire to connect with others. Predictably, socialmedia has become more central to how consumersinteract with each other and how they explore theworld around them. With consumers in all age groupsworldwide spending more time on social platforms,they are also discovering more brands and makingnew purchasing decisions based on their experienceson social channels. Retailers that raise their visibilityand entice consumers on social media will be wellpositioned to realize the full potential of connectingwith a newly curious online audience.In an unprecedented year for retail, all eyes are on theholiday season. Consumers plan to spend as much onholiday gift-giving as in 2019. Consumers stated thatthey intend to shop BOTH online and in stores overa more extended period this holiday season. Withongoing limits on in-person shopping and increaseddemand for online shopping and alternative fulfillmentoptions, traditional retail milestones like BlackFriday and Cyber Monday will evolve into the nextgeneration of retail (online) milestones. Despite theunpredictability of the year, consumer expectationsremain high with a slice of forgiveness. Retailersmust be agile in response. Brands who tap into theinventory irrespective of its location (in-store or inwarehouse), deliver on time via multiple channels,and provide uncompromising online and in-personexperiences will win the consumer's heart this holiday.

Rising consumer demandfor online shoppingoptions is nothing new.But what happens whenin-store shopping isn't anoption at all? Local andregional lockdowns, asthe coronavirus spread,shuttered all but the mostessential retail locations,forcing customers to turnto online platforms fortheir shopping needs andretailers to adapt withagility everywhere.of all adults have shopped at a nonessentialstore since reopening,Since nonessential stores have begun to reopen, retailers see anuptick in apparent consumer confidence. Globally, 65% of all adultshave shopped at a nonessential store since reopening, with youngershoppers leading the charge. So, what does this mean for holidayshopping? Half of the consumers report that their shopping habitswill stay the same as last holiday season. This trend includes64% of baby boomers planning a return to in-store shopping forthe holidays.Globally, 62% of seniors still shop in stores, despite their increasedrisk of illness. In Germany, 65% of seniors head for retail shops, whilein highly connected China, 44% of seniors have shifted to onlineshopping with home delivery. Though seniors still strongly associatewith the in-store experience, younger consumers lead the return toin-store shopping, with 75% of Millennials and 74% of Gen Z havingshopped in the store since reopening.Despite the return to in-person shopping, consumers arestill looking for retailers to reassure them about the safetyof in-store experiences by clearly following public healthguidelines.4Anatomy of Change: Understanding Consumer Behavior in the New Next 2020Gen Z: 74%65%65%Millennials: 75%The Pandemic Effect:Shopping for Speedand Safety

71%71What makes consumers feelsafe shopping in-store?of consumers say that the speed of service, checkoutexperience, and delivery options are important to stay loyalto a retailer.82%79%76%66%And although many consumers appear eager to return to "normal"shopping habits, consumers and retailers alike continue to explorelow- or no-contact delivery methods, as well as new ways to minimizeshopping time in stores. Home delivery is still preferred by 66% ofconsumers globally, with just 18% opting for in-store pickup and 16%for curbside pickup.Negative experiences, like out of stocks and limited productavailability or extended shipping time, drive purchasingdecisions as well, and 33% of consumers say that delay of goodsequates to a bad shopping experience.Obviouscleaning efforts5Masks wornby staff, requiredof and offered tocustomersAnatomy of Change: Understanding Consumer Behavior in the New Next 2020SocialDistancing ility, or lack of, is also driving changed consumer behavior,opening the door for consumers to try new brands and even newstores. More than 63% of global consumers reported trying newstores to meet their needs for essential goods, and more than halfplan to continue shopping at these new stores moving forward.Meanwhile, 82% of global grocery shoppers reported tryingprivate-label or store-owned brands, along with 62% of shopperssearching for nonessential goods.

6Anatomy of Change: Understanding Consumer Behavior in the New Next 2020By far, consumers around the world discovered new brands onFacebook first, then Instagram. The exception is naturally China,where 88% of consumers found new brands on TikTok, while only30% of consumers discovered new brands on YouTube, 26% onFacebook, and only 18% on Instagram.48%48%Other social channels: 12%TikTok: 29%YouTube: 49%During the pandemicInstagram: 53%Consumer preferencesfor online experiencesaren't limited to shoppingalone. As more peoplehave stayed home, socialmedia use has predictablyincreased. Unable to meetin person, people turn tosocial channels to connectwith friends, share personalupdates, get news, andengage in day-to-dayconversations. Whereconsumers go, retailersmust follow. As consumerdemand grows digital,retailers expand theirvisibility on social channelsto entice new consumersand capture new shoppersas behaviors continueto change.Social discovery by platformFacebook: 65%The Social Influence:Discovery froma Distanceof consumers aroundthe world reporteddiscovering new brandson social media.

Social discovery by marketGlobally, younger consumers (Gen Z at 67% and millennials at 65%)are the most likely to discover new brands on social, compared toonly 20% of baby boomers. However, specific markets show an uptickin older consumers discovering brands on social channels:7Anatomy of Change: Understanding Consumer Behavior in the New Next 2020inaMex icoUAE20%GermanyIn contrast,consumers in theUK (20%) andGermany (19%)were least likelyto rely on socialmedia to find newbrands.70%60%52%Ch75%UK80%ChinaBrazilConsumers inBrazil (80%) andChina (75%) weremost likely touse social mediato discover newbrands.The boomer experience19%In Europe, boomersare less likely todiscover social brands,including just 34% inItaly, 9% in France,and 6% in Germany.

The Holiday Impact:An UnprecedentedSeasonDespite the challengesof the year — or perhapsbecause of them —consumers are trying tocreate a memorableholiday season.Morethan half:58%58%are planning tospend the sameamount or moreversus 2019.Holiday shoppers are also planning a mix of online and offlineshopping, with 47% of consumers planning to shop virtually andin-person—just 19% plan to shop exclusively in-store. With so muchshopping taking place on online platforms, retailers must find a wayto leverage physical proximity and inventory in the stores to meetdemand. December 18th was the magic deadline for online shoppingto ensure Santa's gifts arrive on time. Similarly, with increasingvolume and the delivery windows extending longer than average,the procrastinators will have to turn to in-store shopping to securelast-minute gifts.More so this year than in the past, gift-buying plans show apreference for the practical. Of global consumers surveyed,39% said they were planning to purchase clothing andnecessities, 29% are planning to buy electronics, and 27%are planning purchases of gift cards.8Anatomy of Change: Understanding Consumer Behavior in the New Next 2020

The Geography of Gift ReturnsPlan to return no gifts:Globally, only936%36plan to go to the store to execute their returns.Anatomy of Change: Understanding Consumer Behavior in the New Next 2020UAE: 46%China: 51%Brazil: 55%USA: 56%Mexico: 61%France: 70%Australia: 70%UK: 71%A trend toward necessities could also indicate fewer returnsthis year. In 2019, 77% of consumers reported planning to returnat least some of their gifts. This year, only 38% plan to returnsome gifts.Germany: 76%Around the world,more consumersthan ever beforeare planning tonot return holidaygifts. In the US,UAE, China, andBrazil, about halfof consumers planno gift returns,while 70% or moreof consumers inAustralia, France,the UK, andGermany plan tokeep all their gifts.To ensure customer satisfaction and retain loyalty, retailerswill need to explore alternative return methods for gift-giversand recipients that don't devour the season's profits.