Businesses everywhere are being forced to adapt to the uncertain economic climate. E-commerce is experiencing a boom as in-store shopping sprees have been prohibited. Online shopping is a contact-free, safe method of obtaining goods … or is it?

In South Africa, the delivery of parcels has been suspended until the end of lockdown, with post offices staying open to conduct essential services like managing certain financial transactions, paying out SASSA grants and delivering medication. 

Despite deliveries being prohibited through the post office, this has not put a stop to online retailers working around the restrictions by delivering essential goods. Leading supermarket Pick n Pay has teamed up with alcohol delivery app Bottles. Yes, the sale of alcohol is still prohibited — this is why Bottles has repurposed its app to deliver groceries instead. This innovative strategy has opened the door for a whole new world of contact-free shopping, which is bound to be hit by anxious consumers. According to Jessica Knight, head of online at PnP: “Grocery Essentials will offer customers an easy and more efficient way to stay safe and top up everyday basic essential items.” 

Two businesses that are successfully acclimating to the dynamic e-commerce environment are popular food delivery services UberEats and Mr. D Food. The apps have modified their services to deliver essential items during the lockdown period. The essential goods in question include medication, baby formula, nappies, toiletries and basic groceries. 

Globally, e-commerce is reaching new heights with online shopping predicted to bring in $6.5-trillion by 2023. An increase in consumer demand has resulted in a frenzy among retailers who are battling to keep up. This begs the question: ‘what are consumers buying so frantically, and why?’

Changes in purchasing behaviour

Panic buying

Ah, panic buying … the unforeseen hazard to emerge alongside the Coronavirus. Seemingly overnight, toilet paper, hand sanitizer and protective masks were sold out in every store, and consumers everywhere were working themselves into mass hysteria.
Cambridge Dictionary defines panic buying as ‘a situation in which many people suddenly buy as much food, fuel, etc. as they can because they are worried about something bad that may happen.’ 

According to Paul Marsden, a consumer psychologist at the University of Arts London, panic buying plays into the fundamental human need for:
  • autonomy — needing to feel like they are in control of their fate, especially when they feel this control slipping away
  • relatedness — the need to feel like their actions are benefiting themselves and their families, and 
  • competence — the consumer wanting to feel like they are making the astute choice with their purchases. 
Once this acceleration in buying begins, other consumers may feel the need to participate in fear that their spending power will expire and the supply of these goods will cease; this is where the craze begins. 

Both online and in-store retailers have felt the strain of panic buying, struggling to keep up with consumer demand. Some have taken the unethical route, choosing to capitalise on their consumer’s dismay with price gouging

This is where the bullwhip effect comes in — a domino-like effect where it becomes impossible for suppliers to keep up with such a high level of demand. This then leads to empty shelves, which further increases panic. 

This is explained by Kinaxis as “the customer feeling the pain of empty aisles, the retailer losing potential sales and customer service suffering.” This affects distributors as they have to fairly disperse goods and manufacturers as they have to manage this intense spike in demand. 

What are consumers buying?

During these trying times, online shopping has skyrocketed; however, this does not ring true for all retailers. As consumers are leaning towards buying essential items, the fashion and luxury good markets are showing significant losses. 

According to Vogue Business, the luxury goods market could face a loss of €10-billion in profits due to the Coronavirus outbreak in 2020. This market relied heavily on Chinese consumers, which make up a third of the luxury goods market

Major fashion retailers have also taken a visible blow as stores like Nike, Apple and Macy’s have shut down multiple stores, due to the pandemic. Not only are these retailers losing money, but in many cases, employees are also being laid off

Now that we know what consumers aren't buying, what are they spending their money on? The most popular, growing product categories during the pandemic are:
  • health and wellness products — vitamins, cough and cold medication, as well as pain relievers
  • protective gear — hand sanitizer, medical masks and aerosol disinfectants
  • pantry preparations — longlife groceries like canned products, milk substitutes (particularly oat milk) and frozen foods, and
  • toiletries and infant care products — disposable diapers, baby food, sanitary protection, toilet paper and wet wipes.
Demographic differences in purchasing behaviour

Different age groups have been dealing with COVID-19 in different ways, with some showing more extreme purchasing behaviour than others. 

A survey done by CSA revealed that 47% of men admitting that they have been stocking up on groceries in comparison to 38% percent of women. Women reacted to the virus differently, with 59% stating that COVID-19 has impacted how much they are spending compared to 56% of men.

Men have also presented as more prevalent in the online shopping markets in comparison to women, taking a keen interest in contact-free services like curbside pick-ups and subscription services. 

In terms of generational purchasing behaviour, there is a notable contrast in how different ages are buying during the pandemic. Studies show that 47% of Millennials and 49% of Gen Zers have proved more inclined to stockpile on groceries in comparison with other generations. Baby Boomers have shown a recent boost in panic buying, with 34% now claiming to stock up in comparison to three weeks prior where only 10% were stockpiling

Baby Boomers have also been the least frugal with their purchasing behaviour, seemingly preemptively, as other groups cut back on costs. 

How has the pandemic impacted your purchasing behaviour? Let us know in the comments section below.

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Want to know more about how COVID-19 is affecting the industry? Be sure to check out The impact of COVID-19 on the marketing industry.
*Image courtesy of Vecteezy