COVID-19 Changed Retail Buying Behavior
Nearly three years after the pandemic forever changed our lives, the timetable for “life after” remains unclear. Manufacturers, distributors, and retailers in the food and beverage business continue to pursue long-term strategies that consider the economic environment, supply chain management strategies, and consumer buying behavior.
The pandemic drove isolated consumers to online shopping. This shift generated an additional $105 billion in U.S. online revenue in 2020. It also accelerated the growth of ecommerce by at least two years. The latest data shows that ecommerce in the United States continued to grow at a nearly 11% clip in the third quarter of 2022.
Over the last decade, U.S. online sales increased 13% to 18% annually. In 2020, ecommerce sales jumped more than 32%, based on the latest U.S. Commerce Department data.
A 2020 Nielsen article, “COVID-19: Tracking The Impact On FMCG, Retail, and Media,” identifies consumer behavioral shifts and shows how brands can adapt.
- Emphasize quality and efficacy. Manufacturers, retailers, and other industry players must communicate why consumers should trust their products and supply chains.
- Deliver supply chain transparency. Shoppers want complete transparency and details on safety measures taken along the way. Promoting a product’s local origins could help manufacturers and retailers reduce some consumer concerns.
- Leverage technology. Companies that can leverage technology — by enabling seamless interactions through direct-to-consumer offerings — can earn consumer loyalty well after consumer concerns subside.
In the lingering wake of the pandemic, the likelihood of discord between consumer goods companies and retailers is rising. While government officials have reported no food supply shortage in the United States, much of how the supply chain has traditionally operated has changed.
Many face-to-face negotiations have shifted to video and voice calls, making them more transactional. And the traditional retail supply chain is offset by more online shopping, curbside drop-offs, and home deliveries.
The outlook for domestic production of agricultural commodities, including cereals, meat, and dairy, remains robust. USDA’s World Agricultural Supply and Demand (WASDE) report shows most commodities on the rise. Even red meat and poultry will continue to recover in 2021.
How can private label brands adapt to this new buying behavior?
The demand for food products isn’t slowing down as consumers see the light at the end of the tunnel. And many private label brands are reacting quickly to meet rapidly changing consumer preferences.
When developing new products or updating existing ones, we hear from many store-brand owners that creating and managing specifications is labor-intensive and slow. As a result, companies struggle with effective collaboration across departments, and the slow-motion collaboration gets worse regarding suppliers.
Companies find that, on average, 80% of their suppliers are already on TraceGains Network when they log on for the first time. With Networked Specification Management, companies can connect to their suppliers, items, and ingredients on TraceGains Network and gain instant access to all that data to speed up the specifications process. They no longer must track down suppliers and ask for information and documents because they already have what they need. And if a supplier can’t meet your requirements, we’ve made it easy to find a better alternative.