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Shopper Trends|May 19, 2020

ECRM Podcast with WSL: The ‘Cautious Pause’: How Consumers Will Shop Post COVID-19

The 'Cautious Pause': How Consumers Will Shop Post COVID-19, with Elizabeth Gretkowski of WSL Strategic Retail.

As many states look to start opening up their businesses, fear and financial insecurity are still the main drivers of how consumers are shopping.

Fear of the coronavirus is keeping many people indoors even after being quarantined for two months, and with the number of newly unemployed now hitting Great Depression levels, fear of running out of money is leading shoppers to stretch their dollars as much as possible.

These are some of the topics ECRM's Joseph Tarnowski touches on with Elizabeth, who is a Senior Consultant at WSL Strategic Retail, as they review some of the findings of WSL's latest research on how Covid-19 has impacted shoppers.

When Joe interviewed WSL CEO Wendy Liebmann six weeks ago the quarantine was still fresh and consumers were still in panic-buying mode.

Now, consumers realize they are in this for the long haul, and so Liz and Joe explore what the shopping landscape will look like as we progress through the pandemic and beyond it.

If you’d like to learn more about WSL’s ongoing series of How America Shops® in and after the COVID-19 crisis, please reach out to: Elise Marshall at or visit our Shopper Insights page.



Joe Tarnowski  0:00  
Welcome everybody, Joe Tarnowski with ecrm here, and I have a special guest with me, actually, again, it's Elizabeth Gretkowski. She's the senior consultant with WSL Strategic Retail. And today we're going to talk about some updated research they have on the impact of covid 19. On how shoppers are shopping. So, Elizabeth, thank you for joining me.

Elizabeth Gretkowski  0:27  
Thank you so much for having me, Joe. Great to be here.

Joe Tarnowski  0:29  
So this is what our third or fourth time we're doing an interview together. All right. Well, always a pleasure. And I'm looking forward to digging into this research. So can you tell me to start off? Um, can you just give an overview of the research and how it's been updated since the last time when I spoke with Wendy, what was that maybe a month and a half ago? 

Elizabeth Gretkowski  0:52  
Sure and yes, I think you spoke with my colleague, Wendy Liebmann. Earlier, probably last month, but we at WSL, we do ongoing research with shoppers. So we're always in the field, doing qualitative and quantitative work to understand how shoppers are feeling, how they're living, how they're shopping, why they buy what they buy. And so we of course, right now, this is a really important time for us to be in the field, understanding the impact of COVID on shopping life. So we've done two pieces of research. One was in May, I mean, I'm sorry, March. And I think that's what Wendy was speaking to you about. And so we went back again in April, to assess if there were changes, if shoppers were feeling differently, and to, you know, get a sense of what the sentiment was and how they were shopping, and how that was changing.

Joe Tarnowski  1:41  
Great. And so since then, we've had, what 30 million people have, you know, apply for unemployment benefits. And so I remember when he started talking about, you know, people kind of acting like they did during the recession. But now 30 million unemployed people later, that's got to be really, really hitting hot. So how is our financial insecurity kind of playing into how consumers are thinking about shopping?

Elizabeth Gretkowski  2:16  
It's a good question. So um, well, I think just, you know, before we get into this, it's important to set up that shoppers are living in fear. And fear often drives behavior. And so when we ask shoppers, about their feelings about the virus, 85%, are worried about getting the virus. And on top of that, they're dealing with so many other stresses, they're worried they're not going to be able to pay their bills, not going to be able to put food on the table, they don't have childcare, they're homeschooling, they're worried they're going to blow through their savings. So shoppers are really feeling the burden of all of this. And so they are feeling more pessimistic about their financial situation. So just to give you some context, we always ask the question about financial stability, because it does frame up how they're going to view their shopping. So back in November of oh nine, it was 29% of shoppers felt pessimistic about their financial situation, meaning they felt like their financial situation was probably going to get worse. And now fast forward to mid April, that has jumped up to 40% are feeling pessimistic about their financial situation. And that does of course, vary with income, the lower income shoppers are more worried 50% of those with incomes, I think under 50,000, feel pessimistic versus the higher income, it's only about a quarter who feel pessimistic. So that is important to think about that shoppers are feeling concerned about their financial situation. And when you're concerned about your financial situation, what do you do, you're more cautious about your spending. So it is interesting to think about the recession type behavior that they're going to start doing when it comes to shopping. So just to give you some examples, and we know all this, because we stayed very close to the shopper during the '08 recession, and then all that financial crisis was going on. What we saw was that shoppers were trading down to lower price brands, they were using up less. So for example, instead of taking a vitamin every day, maybe you take a vitamin every other day, maybe you cut your vitamin in half and take half a vitamin, maybe you put water in your shampoo to make it last longer. We have to give shoppers credit because they have become so incredibly smart and savvy when it comes to saving money. And one of the big differences between this financial crisis and what we've been through before is digital. And the fact that she has all these digital tools. She has mobile apps that help her track and manage her money and find coupons and find the best price. So shoppers are definitely smart and savvy and they're going to be finding ways to trade down cut back and make smarter choices.

Joe Tarnowski  5:00  
I think that also part of that, because I've been thinking in this way, too is they don't know when stuff is going to run out that they need, well be it online or be it in the store. Obviously, the toilet paper was a classic example from this whole thing. But I'm seeing that across other different categories. And I'm seeing a couple of things, um, maybe opportunities that come up from that, you know, from talking to buyers and suppliers. And I'm wondering if you're seeing this too, but it's almost kind of driving trial of emerging brands only because that's what's there, you know, so let's say, I'm looking for pants on Natasha, and the traditional brands that are always on the shelf and not there. But let's say that buyer for that retailer, I found some emerging brands that had some stuff in stock, and put it on the shelf. As a consumer, I'm gonna get it really, because there's nothing else and I need it. But I might get it and like it. And then all of a sudden, there's a new brand that now that is engaging with consumers. Are you seeing some of that happening?

Elizabeth Gretkowski  6:15  
Absolutely. We're seeing shoppers, first of all, they told us, one is they're trying new websites, different online retailers. And I think a lot of that is the inventory problem. You go to your local supermarket, there's nothing there, you can't find your brand, you can't find any replacements. So perhaps you'll try an online retailer and get something shipped to you. So we do find I think it's about one fifth of shoppers are have already tried a new website to buy their goods to get them delivered. And the same thing with brands exactly, as you said about I think it's a quarter are trying new brands. And it's interesting to see because we we've learned this from again, the previous recession is that when shoppers are doing all of this trading, they realize that they discover new brands and new retailers that they like, and they don't necessarily go back to what they considered their favorite beforehand. So I definitely see a lot of this trading a lot of this swapping, and that's again, this is the call to the brands to keep your shoppers engaged, keep them in the brand, whether they're going to trade up or down, what are you doing to engage them and keep them with you?

Joe Tarnowski  7:24  
Gotcha. And at the same time, one thing that I've learned is there's a lot of things that I can live without. And, you know, if maybe things I thought I needed or things I needed to do, or you know, and obviously I'm not going out to local restaurants and hanging out with my friends and spending all that time and money, you know, out. And the thing is, you start thinking, do I really need? Did I really sure I need to I want to spend some time with my friends is up. But do I need to do that frequency? Or do I need these things, when I can get those things that are cheaper will last longer, so on and so forth?

Elizabeth Gretkowski  8:03  
You know, it's funny, you mentioned that because I think that when when shoppers see so many things get stripped away from their life, whether it's, you know, God forbid a loss of a loved one, or even just kids sports events all being canceled or sporting events being canceled, you know, you can no longer go to church or whatever you used to do before and you're forced to stay at home in isolation, you really start to think about what are the priorities in your life. And we've seen that in our research, half of shoppers say to us that they are now reevaluating what's important to them in their life. And shoppers are also really focused on staying calm. It's amazing. Again, going back to the shopper who is so smart now. And so in control that she knows I say she but you know, she and he. They know that they need to do things to become and they're proactively managing their health and well being and doing things to stay calm. And also the other thing that they're while they're staying home and rethinking their priorities. They're spending a lot more time focusing on their finances. So thinking about how can I manage my finances better? They don't want to get into the debt and all the craziness that happened to them before. So they're really trying to prioritize how to be financially responsible. 

Joe Tarnowski  9:20  
So what are these some of the things they're doing to stay calm? Obviously, probably a lot of self care activities. Reading, TV. 

Elizabeth Gretkowski  9:28  
Yes, there's lots of self care going on and a lot of wellness going on. So the interesting thing is, is wellness, as I'm sure you know, this has been an evolving trend. It's not even a trend. It's a lifestyle. It's a movement. For a long time, at least five years shoppers have been extremely focused on their well being. And so COVID now is like a catapult to all of that. They are more focused on their well being than ever before. They are doing things like Learning and reading about health and wellness, I think Let me try to think for a second, it's a third of people are doing more reading and learning about wellness, another third are doing more exercising at home, about a quarter are eating healthier, another quarter are doing more to take vitamins. And also sustainability fits within that whole wellness thing. And I wasn't sure really how this was going to play out, you know, the whole value around sustainability. But still 20% of shoppers are so focused on sustainable practices, even during COVID. And I think it's because it makes them feel good. And at this time, they're really doing whatever they can to feel good, whether it's recycling, reusing, being sustainable, exercising, getting more sleep, meditating. You know, we see this across the board, this is really what they're focused on during this time.

Joe Tarnowski  10:49  
While I certainly can attest to that, just personally, I mean, seeing what's going on and seeing, you know, to things short term, I think people doing things for the health like me, for example, I loaded up on, you know, like immunity boosting drinks, and, you know, probiotics I've always taken, and you know, some of those zinc gummies, you know, things like that, just to like, increase my immunity for the short term. But then I think the long term what you were talking about earlier, diet, you know, eating healthier. In fact, you know, I was always trying to eat healthier over the past few years. But it's gotten a step further, I'm getting more organic stuff, I'm getting a lot more vegetables, a lot less pasta, you know, spending more time working out, because now I'm thinking more in terms of longevity, too. So you have the short term, what can I do now to boost my immunity and all that, but then the long term? How do I make myself better prepared, so that if this happens, again, better protected. So I see both of those happening. Exactly.

Elizabeth Gretkowski  12:01  
And also, the other piece of wellness is the whole mental aspect of this. I'm sure you know, we've all heard and read the headlines about the emotional and mental toll that this is taking on people, the loneliness, the depression, the anxiety. So that's the other part of this. And it's been really, it's been, it's been great to see the retailers and brands really step up their messaging, you know, change it up from just the standard old, you know, 20% off and really focus on shoppers mental state, you know, reminding them to be calm, reminding them that everyone's accepted. We're all in this together. It's so that's the other part of wellness that yes, it is about exercising and meditating and all the things that we're proactively doing to build our immune our immunity right now and also long term, but it's also the mental aspect of this. I think that's a huge opportunity for brands.

Joe Tarnowski  12:50  
I agree. Um, what's what's funny is I've been reading books on people facing adversity. So two different things I've been reading, and this has helped me feel better. I read a book about the plague in 1665. And I read a book about Spanish influenza. And the reason why is because it puts it in perspective, what we're going through now is nothing compared to 1914. So you read that book, and it's like, okay, two years versus we're only two months, you know, that I just read a book about Ernest Shackleton, who was an octave art Antarctica Explorer. And he was stuck the idea of you probably saw the video post. So and it's like, wow, these dudes were stuck in the ice in a boat for 10 months straight three of those months in pitch black darkness. Okay, this is not that bad now, so. But I think the thing you said about the messaging, I really I agree, I think it's key, you really can't be tone deaf. When you're addressing consumers. Now you really need to put things in the context of what they're going through, so that you can show them that you understand you're there for them, you know, sure, they need discounts and pushing a discount, or sale is important. But what's more important is what we we're here to help you and these are the things we're doing to make your life easier right now.

Elizabeth Gretkowski  14:20  
Exactly. Or when you push the promotion, the 20% off frame and up in a way um, we care about you so much. We want you to have this so that you can get what you need. You know, so there's just so many little nuances that retailers could and brands could do to show their shoppers that they feel their pain, they understand what they're going through and they really care about them.

Joe Tarnowski  14:44  
Yep. Or you know, Hear hear these bath bombs, right? You're feeling stressed? Yeah, these bath bombs with CBD will help relieve anxiety or things like that, or like Wendy brought up in our interview, you know, and she was really forward thinking on that, once you mentioned, you know, eventually people are going to start seeing their roots, their gray roots showing and their zoom videos. And guess what, six weeks later it's happening. In fact, I just gave myself a buzz on with clippers because my hair was just getting too crazy. And I just, you know, so but it's saying it's happening, people are now seeing themselves on zoom, and they know that it's, it's here to stay, it's not going away, even once things get better, it's going to be incorporated in. So now in the beginning, maybe they're thinking I'll be in my pajamas, and I have a ponytail or whatever. Now they're actually I'm seeing a lot more people are trying to look as if they were working in the office. Are you seeing that too?

Elizabeth Gretkowski  15:49  
Yeah, you know, I've seen different things. It's interesting. In fact, I was thinking about that when I got dressed today, I was like, should I wear like, you know, like, I'd be giving a presentation or is this more casual, but I do feel like now there's this whole new sense of humanity coming out, which I love seeing people I was worried, I'm like, gosh, my three-year-olds gonna come running through the door during this interview, it's bound to happen. But this, this whole new sense of realness is coming out. And it's really beautiful to see that. But I do think that shoppers know this. And they are buying hair color. They're buying the medicine, read all these things that we've been seeing all these online direct to consumer brands, who have real value propositions. Shoppers are going to be buying these and doing these at home treatments. In fact, we already seen in our research that doing at home beauty treatments is up right now. Although the flip side of that is that spending time on your beauty routine has gone way down. So I don't need to put on a full face that's going to last all day. But I'm going to touch up my roots,

Joe Tarnowski  16:52  
Or just do what you need to do for that first meeting. And that's it. So the you, you touch on something before you when you mentioned what consumers are spending time doing. And one of the things is they're spending a lot more time on social media online, just to stay informed and busy. What kinds of things you seeing in your research along those lines?

Elizabeth Gretkowski  17:15  
Well, it's interesting that most of them are watching the news, which I don't know why if you're trying to be calm but half of them are doing more, you know, watching the news and playing video games, watching movies, the whole entertainment aspect. But really, it's about the whole wellness piece. And doing more cooking at home spending more time with pets, you know, you only can do so much when you're home? 

Joe Tarnowski  17:42  
Where do you see this going? And as we start to get out of it? Um, which were at least attempting to do you with states opening up and things how do you see this continuing on shopper behavior and how the retailers and brands are addressing it? As we kind of open up more. And then in a and this is looking a little bit further out? Once the pandemic passes? How what's the lasting impact?

Elizabeth Gretkowski  18:14  
Well, I think there's a couple of things. One is the financial piece, which I think I already touched on, which is just that shoppers are going to be much more cautious about their spending. There, there was something we used to talk about called the cautious pause. So even when they get back to spending and shopping in the stores are going to get to the checkout, look at their basket, take the item out and say is this a smart use of my money. So that these behaviors are going to be ingrained? And they're going to be ingrained for years to come? I don't I'm not an you know, I don't want to make predictions about the economy. But when we looked back at the '08 recession, it wasn't until 2015 till we really saw these behaviors stop. Or I should say decrease. So they're going to be this saving money, cutting back prioritizing their spending is going to be here to stay for a while. wellness is going to be here to stay for a while. I think that COVID is just ramping it all up a lot. To your point. If there's going to be a second wave of this, you know, what can I do right now to make sure I don't get it. These are all concerns that they have. So they're wanting to get in the best shape possible. And again, when we talk about wellness, I think it's really important to remember that we're speaking holistically. It's about physical, emotional, mental, financial, it's across the board. They just want to feel well, but I think when it comes to shopping behavior, the big thing and we haven't really talked about this yet, is online shopping. And it's no surprise that shoppers are staying out of stores and they're shopping online. And we see about half and half so 50% still prefer to go to the stores, but the other 50% are finding new ways to shop and it might be shopping online and doing curbside pickup drive thru pickup delivery, you know, what have you, there's just going to be a lot more of these alternative ways to get goods and services moving forward. But the interesting thing that I just want to call out is that what we've been tracking for the past 10 or so years, is that when shoppers start to buy online, and they realized that it was, well, it was easy, it was convenient, it was quick, I got great prices, they stick with it. So coming out of this, we're going to see shoppers who, who bought online for the first time, they're going to stick with this behavior. And they're going to rethink the reason to go to the store, especially as retailers are now rethinking the stores, you know, getting rid of merchandise and sampling. And all of this stuff are shoppers really going to go and browse and, you know, sit down and have craft beer and listen to a concert at the store anymore. I mean, maybe not, it might be a while before we get back to this. But I think the important thing to remember is that those who are buying online right now, so just let's take a category, for example, for beauty 43% of women have purchased beauty online in the past month. And of those 43% 28% have done it for the first time. So those people who are now doing it for the first time, are more likely to stick with this behavior. And we've asked shoppers, you know, after this is all over, are you going to still shop online, and three fourths say that they do. Now we know that what they say they do and what they actually do is different. But still three fourths of those who buy online say they're going to stick with it. So I think this is going to be the biggest shift. And it's really important for retailers and brands to think about their distribution strategies, think about how shoppers are getting their products, how you've got to innovate new ways to get your products in their hands in fast, convenient, clean, transparent ways. Whether it's clicking collect, drive through instacart, Uber, whatever it is, that's really what needs to be done right now to prepare for the future.

Joe Tarnowski  22:06  
Great point. I agree, I think if any retailer is not seriously, considering e commerce and clicking collect, if they're not doing it already, then they should be seriously considering that because it really the landscape has is going to change tremendously on even things that you know, there for. Some people are forced online because of out of stocks in the store. And other people, like you said, they don't want to leave the house, they don't want to be around people, maybe they got parents with them that you know, have existing conditions, they don't want to risk it, but then they get so used to it, we're we've actually seen the same thing in parallel with the virtual world, you know, once when we launched our virtual meetings, people coming on, originally, because there's no place else to go. But once they do it, they're realizing, Oh, this is so easy, I'm still getting the same effect. And it is sure when not obviously, face to face, in-store that face to face relationship, you can't replace that 100%. But we're starting to realize, you know, we got good bandwidth we got this is a pretty good approximation, you know, especially when the other you don't want the other alternative. So, um, I think that online is going to be a major part, I'm certainly shopping online a lot more than for things that I never got before. And the same thing, it's just so easy to just right click reorder now that I'm going to stick to those categories. Fortunately, I'm here in New York, I have a lot of smaller stores right around my block. So I can pretty much just dart in and out. But not everybody is in that situation. And they probably don't want to drive to a store and deal with all that. So, alright, looking forward, you know, um, what recommendations do you have? For retailers and brands, you talked about, you know, some strategies, the five strategies to survive.

Elizabeth Gretkowski  24:11  
Yeah, so um, so there are we do have five strategies to survive that I would like to suggest to the listeners, I do want to just preface this by saying that everything that we've talked about is so high level, and there are so many nuances when we think about specific categories when we look at specific shopper segments and even different regions across the US. So and that's one of the things that we'd love to do at WSL is, is really help our clients understand these future scenarios and what the future is going to look like. But for the sake of this conversation, of course, there's five things that we suggest to help brands and retailers survive right now. And number one, as I already mentioned, is to feel their pain. And, again, just in the messaging and the promotions. You do in the marketing, it's so important to be relevant to the place where your shoppers are at. And they're feeling fearful. They're feeling anxious, they're feeling scared about their financial situation. So there's just a big opportunity for brands and retailers to say we understand we feel your pain. And here's a little way we're helping. Here's an example. I mean, this is so little, but it's just so smart. So again, going back to 08 staples and Office Depot, everybody had lost their jobs, and people were on a job hunt. And they came out with a, an advertisement that said, you know, we want to help you find a job. So come in whenever you want and you can print, print your resume, for free, totally small, doesn't cost them a thing, but just a way of saying we really care about you, here's how we're going to help you out. So that's number one, feel their pain. Number two is to understand this new context that we're living in, you cannot return to retail and expect to do business, the way that you've done before. This really requires you laying everything out how you do business, how you sell how you go to market, deconstruct it all and basically rebuild it, considering the new landscape that we're living in and the new shopper that we have before us. Three is keep your shoppers in your brand. Again, as we talked about, there's going to be so much trading up there will be trading up believe it or not, and trading down. But the important thing is that you keep your shoppers engaged so that when they do make the switches they stay with you. And four is be where they want you to be not where you want to be where they need you to be. And this really talks to your distribution, you know, I have to wonder about these premium beauty brands who are in the mall. And what's going to happen to them, they have got to rethink how they're at retail. And it's not just them, it's everybody else to everybody has to step back and rethink about it. If you're in a mall and people are no longer going to the malls, how are you going to get your products to shoppers. So again, it just you have to be where they are you have to be truly omnichannel and it has to be easy. And then the last one is just about embracing well, because wellness is it used to be a lifestyle. And right now it is life saving. And shoppers are so focused on it. And there's a tremendous opportunity for brands to frame up their message their products, their marketing everything in a in a wellness frame of mine, it doesn't mean you need to have you know recyclable packaging and you need to be organic. Even just the mental nod to the shoppers mental well being Hey, you're beautiful just the way you are. Take the CBD and you'll be calm, whatever it is. There's just a really big move opportunity to resonate with the shoppers desire to be well.

Joe Tarnowski  28:02  
Awesome. Well, those are certainly great recommendations to, to kind of wrap this whole thing up with. And, you know, for those of you who are interested in learning more about WSL and what they do on the website is WSL Strategic Retail. I get that right now. All right. All right. And then also they have a Future Shop podcast. And they have a ton of content all around dealing with COVID-19 and how to survive and thrive in the midst of all of that. So Elizabeth, thank you so much for joining us. And I look forward to keeping this going and hopefully eventually doing this with you guys in person again.

Elizabeth Gretkowski  28:48  
Hopefully soon, Joe and thank you so much for having me. It was fun as always,

Joe Tarnowski  28:52  
always take care and be safe.

Elizabeth Gretkowski  28:54  
Okay, you too. Bye

Joe Tarnowski  28:55  


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