Retailers’ Drive to Customize: Has It Shifted in the Wake of the Pandemic?

In 2019, retailers were touting personalization as one of the most effective ways to attract customers. According to the Boston Consulting Group (BCG) in collaboration with Google, increased personalization raised both consumer spending and their brand satisfaction. Additionally, the number one consumer concern at the time was keeping their payment and personal information private while online shopping. As long as retailers were able to keep their private information safe and could customize their shopping experience to the consumer, it seemed like they had a good shot at doing well. Then COVID-19 struck.

Now that the world is in the midst of a global pandemic, consumer priorities have shifted. Consumer’s number one concern is now safety – not security – and some choose where to shop in person based solely on hard evidence of safety precautions such as signs requiring patrons to wear masks.

As the stakes got higher early on in the pandemic, consumers grew tetchy about shopping for anything outside of sanitary and grocery items and the retail industry suffered as a result. Deloitte found that spending decreased on retail as a whole, especially in households with lost income. Sales plummeted by 14.3% in April, which is higher than any loss during the two previous recessions, from February when the pandemic took hold in the US. Since then, they have been recovering slowly, with June meeting pre-pandemic February levels and July rising 1.2% quarter-over-quarter.

But how are retailers going to bring demand back up across the board during a global pandemic and keep it there? The answer is still, in part, personalization, though the way that it looks has changed. This now includes adapting their marketing strategies, pricing, etc., to reflect new consumer needs that the pandemic created. Adaptations such as “strengthening their offer in categories that have gained relevance” says BCG, or focusing their resources on “pent-up demand” items like home gym equipment or DIY products.

Personalization now not only requires that retailers make it about the consumer, but make it about the environment COVID has created as well. Some are boosting their sales by hosting live streams, focusing their messaging on safety and cleanliness, or using loyalty programs to track their customers’ attitudes. Regardless of the “how,” consumers expectations have changed and retailers must change with them or COVID may leave them behind.