How COVID-19 has changed consumer trends forever

As consumer trends continue to shift, businesses may need to rethink their marketing strategy, mix and spend in order to set themselves up for success through COVID-19 and beyond, according to Sparro co-founder Cameron Bryant

The COVID-19 pandemic has brought about significant change for many. It has altered consumer trends and, as a result, the trajectories of many Australian businesses.

 In 2019, Australia Post forecast 12 per cent of all consumer spending would shift to online by 2021. Yet, with the seismic shifts experienced last year, online shopping accelerated and hit 12 per cent of total retail sales by March 2020. By April 2020, some 200,000 consumers entered the online market, purchasing something online for the first time, according to the analysis by Australia Post. In total, roughly 5.2 million Australian households shopped online in April 2020.

Online retail became the new normal, but it wasn’t just where and how people shop that changed; what they bought was vastly different from previous years.

Home appliance and loungewear sales surged during the pandemic

During the pandemic, the demand for comfortable and trendy activewear and loungewear, for example, surged and continues to sell well for many online retail stores. The global sleepwear and loungewear market is predicted to grow by 7.6 per cent by 2024, as millions of people continue to spend more time at home.

This trend is just one example of the change brought on by COVID-19, which has forced a shift in many marketing practices, said Cameron Bryant, co-founder and partner at Sparro, a leading digital marketing agency which employs more than 60 staff to manage in excess of $120 million in ad spend on behalf of almost 100 clients. Mr. Bryant, a UNSW Business School alumnus, was recently interviewed by UNSW Business School’s Veronica Zixi Jiang, lecturer in the School of Marketing.

As people were not going out and instead staying at home, Mr. Bryant told Dr Jiang the fashion industry saw a shift towards loungewear and activewear instead of evening dresses and suits. Inevitably, this affected all of Sparro’s fashion clients, who had to adjust their strategies to meet the changing consumer demands. “We [also] have a lot of travel clients, and overnight, travel had gone to zero,” Mr. Bryant said.

“People had to work from home, so they needed office chairs and they needed desks, and then as their kids were off school [they] needed to buy outdoor play equipment. So, these kids were distracted while they were trying to work as well,” he said.

Consumers are more conscious of sustainability

But COVID-19 also highlighted the value of health and minimising waste. As a result, more people are moving towards more sustainable products – a trend present before COVID-19, which Mr. Bryant said has subsequently accelerated significantly.

“We saw that trend happening before COVID-19 as well,” he said. For example, he noted Sparro has several clients within this space, such as eco clothing brand Boody. The success of brands focusing on sustainability shows people are caring more about where their products come from, what materials they’re made of, how much plastic is used in the process, and where it’s shipped, he said.

In a bid to look after themselves and the planet better, Mr. Bryant said COVID-19 has accelerated a trend in which people are adopting healthier and more sustainable options.

A three-year forecast

There will be a number of consumer trends that will continue post-COVID. Businesses cannot ignore the shift to online shopping, which Mr. Bryant predicts will only accelerate over the coming three years. “People will not need to go as much to the shops to buy big heavy goods, because they can do that from the comfort of their own home as well,” he said.

This also means the shift towards home delivery will continue to grow, and businesses will need to work out how to adapt to this trend as sustainably as they can – for their company as well as the planet.

Another notable trend on the part of consumers is to shop for sustainable brands. An analysis by CourierPlease recently found that nine in 10 Australian consumers would purchase ethical and sustainable products, and this trend is also likely to accelerate.

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Then there is also the acceleration of buy now, pay later platforms including AfterPay and ZipPay. An average of 17,300 new customers joined AfterPay every single day during the past financial year, while this increased to 20,500 new customers per day in the last quarter of 2020. AfterPay’s active customers more than doubled over the 2020 financial year to 9.9 million, and active sellers and retail stores rose 72 per cent over the year to 55,400.

There are even more players (such as Klarna) entering the market, which emphasises the shift towards consumers looking for convenience. “Buy now, pay later platforms are an easy way to offer someone convenience when they’re purchasing from your e-commerce store as well; [it] also allows people to manage cash flow better, etc.,” said Mr. Bryant.

With brick-and-mortar stores increasingly offering a buy now pay later option at store checkouts, Mr. Bryant said this trend is only going to continue to get bigger.

How COVID-19 has affected marketing agencies

COVID-19 has had an enormous impact on organisations across the board, with many adopting work-from-home arrangements through 2020. This has pushed the boundaries of organisational culture at firms such as Sparro.

“For us, building a culture online is hard. So we’re doing a lot of events together, such as online trivia, online karaoke, anything online that anyone can join together and hang out together as they normally would,” he said. “And as a bigger organisation, we’re coming together at different points… so that’s everyone coming into the office to have a barbecue or everyone’s coming into the office to do a Halloween event... [it's] bringing people together so they can work together,” he explained.

For an organisation like Sparro, he said it was essential to offer both options: collaboration in a physical space, and the opportunity to work and collaborate safely from home.

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From a marketing standpoint, he said COVID-19 still presents a range of considerable challenges and continues to affect the industry, especially as advertising sales are shifting to digital away from traditional offline channels such as billboards and TV ads.

“People are dealing with those channels a bit less... so it’s obviously playing a huge impact on the marketing space, as well,” said Mr. Bryant.

For businesses looking to optimise their marketing mix, he said it was important to make sure they’re spending money where it’s going to be most effective, such as reaching customers through social media channels.

Veronica Zixi Jiang is a lecturer in the School of Marketing at UNSW Business School. For more information, please contact Veronica directly.