Those that fail to address the demand for sustainability obligations and for multiple retail touchpoints may be left behind …

In a study of over 19,000 consumers in 28 countries regarding their shopping habits in September 2021, two findings were gleaned from the data.

The queries about the respondents’ consumption patterns, brand and product choice, and any tendency to change behavior based on personal values and beliefs, point to their increasing preference for sustainability and for multiple touchpoints across physical, digital and mobile services.

The report covered all consumer-packaged goods, including insights relevant to the food and beverage industry.

Two main findings
For the period studied, data from the global respondents led to these two takeaways:

  • Changed consumer shopping behavior requires retailers to be more agile to meet customers where they are, and to integrate digital and in-store experiences
    • Hybrid shopping was on the rise: respondents were mixing physical and digital channels in shopping journeys out of necessity during the COVID-19 pandemic.
    • 72% of respondents indicated they used the physical store as all or part of their primary purchase method.
    • Top reasons respondents chose to visit a store included touching and feeling products before buying them (50%); picking and choosing their own products (47%); and getting products right away (43%); what in-store shoppers were looking for varied by product category.
    • 27% of respondents reported hybrid shopping as their method of choice. Gen Z consumers surveyed were most likely to be ‘hybrid shoppers’ compared to people of other age groups.

    According to Mark Mathews, Vice President, Research Development and Industry Analysis, USA National Retail Federation, which conducted the study in conjunction with IBM’s Institute for Business Value: “While many surveyed consumers still place high value on the traditional in-store shopping experience, they also now expect the flexibility to build their own shopping journey—according to the behavior prevalent to their age range, available tools, and the product category they are looking to purchase. This ‘hybrid’ (shopping) approach is a fundamental shift in consumer behavior.”

  • Sustainability has become increasingly important
    • The largest segment of respondents (44%) were found to be purpose-driven consumers, who choose products/brands based on their values like sustainability.
    • 62% of respondents were willing to change their purchasing habits to reduce environmental impact, up from 57% two years ago.
    • Half of respondents indicated they were willing to pay a premium (an average of 70% more) for sustainability. This is roughly double the sustainability premium indicated in 2020.
    • 31% of respondents indicated that sustainable products made up most or all of their last purchase, indicating a probably gap between intention and action.

    IBM Consumer Industries’ Global Managing Director, Luq Niazi, said: “It is becoming essential that retail brands demonstrate sustainable choices and options in each step of the customer experience. At the same time, hybrid shopping has taken hold in most categories, particularly in home goods and apparel; and while stores continue to play a predominant role in grocery, hybrid shopping is growing in these categories, too.”

Addressing the findings
The survey data indicates that over the last two years, sustainability has become even more important to global respondents, despite a gap between intentions and actions. This could be due to the lack of information in the buying process.

To serve these multiple customer preferences, many retail brands are continuing to rapidly transform operations, customer experience and supply chains with technologies such as AI, cloud computing, and blockchain.

According to Colin Tan, Technology Leader, IBM Singapore, omnichannel efforts are as important as ever, and those without the correct data systems in place will be disadvantaged. “Even as the demand continues to change, technology can help retailers them to extract what the real demand will be, and to ensure the correct supply chain is in place to drive fulfillment to react to that demand.”