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20% of Consumers Fear Their Favorite Brands Will Go Out of Business

It’s no secret that retail—and commerce more broadly—have changed in the age of COVID-19. And according to new research, some shifts in consumer behavior may be here to stay.

Nearly one-quarter (24 percent) of survey respondents said that the coronavirus crisis has caused their purchasing patterns to change permanently, according to a report from e-commerce solutions platform Scalefast, which helps brands to strengthen their own DTC sales infrastructures,

The report surveyed more than 1,300 U.S. adult shoppers at the end of May with polling data collected by YouGov. It showed that 38 percent of consumers will be more conservative with their shopping budgets even after state and national business restrictions lift. What’s more, 29 percent are already planning on spending less during the holidays, specifically.

The data throws a damper on the hopes of brands that were counting on a retail resurgence in the coming months. But retailers can take steps to optimize their businesses and entice the contingent of shoppers that are ready to get back to the stores, according to Scalefast CEO Olivier Schott.

“Retail isn’t going back to normal following the COVID-19 crisis, but it can rebuild and be ready to respond to the changing expectations consumers have for their shopping experiences,” Schott said. “Our research showed many consumers have already fundamentally changed their shopping habits, and our goal is to help brands and retailers better understand these changes so they can take the necessary steps to rebuild.”

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Specifically, consumers are looking for clear communication in a time of uncertainty, Schott said. Shoppers are deeply anxious about what in-store experiences will look like going forward.

More than one-quarter (29 percent) of shoppers said they are worried about not being able to find the items they need or want when they head out to the shops. One-fifth of shoppers said they were concerned that their favorite brands would go out of business.

Shoppers are also understandably mulling the health measures they’d need to see to feel comfortable returning to physical retail. Seventeen percent said they now expect more insight into how retailers operate, and an equal number said they would only purchase from retailers with clear procedures to combat the spread of the virus.

Once stores are able to lure shoppers back inside, 28 percent said they would be less likely to try out items while browsing.

Shoppers “aren’t looking for fancy new technology so much as the confidence that their concerns are being addressed,” Schott said. At a time when physical contact can be daunting, brands can do that by making a more robust e-commerce push than ever before.

Expectations for perks—like shipping and loyalty programs—have grown in recent months, Schott said.

More than one-quarter (27 percent) of shoppers plan to be more conscious of shipping costs going forward, and 22 percent said they expect retailers to offer more flexible return policies. An equal number said they will prioritize cost over adhering to their favorite brand or product.

Despite having higher expectations of brands and retailers, consumers also plan on being more understanding of service inconveniences than they have been in the past.

Forty-five percent said they would be more patient with longer delivery windows, while 41 percent of expect to see longer customer service wait times as retail reboots over the coming months.

Shoppers will be largely undeterred by those challenges come the holidays. More than one-quarter (28 percent) said they plan to make more online purchases this year than ever before, and 15 percent expressed plans to start holiday shopping earlier this year to ensure that products arrive on time.

Consumers will also be more willing to experiment with newness post-coronavirus. More than one-third (35 percent) said the pandemic has changed their expectations, allowing for greater flexibility in choosing between specific brands and products.

The crisis also appears to have given shoppers a newfound confidence with online shopping. Nearly one-quarter (24 percent) of shoppers said that once retail restrictions lift, they’ll be more likely than they were before the pandemic to purchase directly from a brand’s website, and 9 percent said they would be more likely to purchase from a DTC brand in the future.

Omnichannel approaches may also prove beneficial for retailers, as 35 percent of shoppers said they were likely to use curbside pickup, and 24 percent said they would utilize third-party delivery services to make purchases.

Over one-fifth of shoppers said they would set up and use contactless payment services, too. Retailers investing in technology should be focusing here, Schott said, instead of chatbots and text-to-order technologies that are unlikely to retain relevance post pandemic.