How COVID-19 Has Changed the Way We Shop Locally
Months into the COVID-19 pandemic, it’s no secret that nearly every aspect of life has been upended, and nowhere is that more apparent than in the retail industry. We have new definitions of busy shopping districts, packed restaurants, and bustling strip malls. Even in cities that have entered Phase 3 and lifted stay-at-home orders, customers have changed their shopping habits, shifting dollars away from local stores or not spending.
A survey from Tech.co found that 80% of small business owners say COVID-19 has hurt their businesses. It’s no surprise, really.
The three-fold changes of lockdown orders, less need for quarantined consumers to spend, and a dampened economy have drastically altered how shoppers spend in 2020. But this isn’t all for the worst. Some small businesses have found an opportunity to pivot and go digital, given that consumers are spending 76% more in online shopping than the previous year.
There are also a few ways the market has changed shopping local.
Supply Chain Shutdowns and Shifting Behaviors
One of the most immediate impacts of the COVID-19 pandemic has been supply chain disruptions. Transporting inventory in outbreak regions shuttered almost immediately as countries went into lockdown. That triggered a domino effect causing businesses to attempt to scramble to find substitute resources while alerting customers of delays.
Meanwhile, for many local shops, the introduction of new products was delayed or shelved altogether. In June, Supply Chain Quarterly reported that nearly half of the electronics industry had delayed product launches due to “pandemic-related challenges.”
Naturally, consumer behavior has adjusted because of these disruptions. How and where they spend their dollars, especially when spending on local shopping, looks very different from 2019.
Fear and Shopping
The biggest concern about shopping during COVID-19 has been fear of contracting the virus, which currently has no cure. The Centers for Disease Control and Prevention guidelines indicate that the coronavirus spreads mainly from person to person, “through respiratory droplets produced when an infected person coughs, sneezes, or talks.”
Therefore essential retailers allowed to stay open, such as grocery stores, began to enforce strict protocols to limit contact that changed the way people shop. Those included:
- Limited numbers of shoppers
- Reduced store hours
- Employee handwashing regulations
- Hand sanitizing stations
- Contactless payment systems
As stores have opened up across the country, these “new protocols” are quickly becoming the norm.
If you are a local business owner and wondering how to stay connected with customers while also following county guidelines, check out our article, “Curbside Pickup 101: A Guide for Local Retailers” for all the information you need on staying afloat during a shift in local sales.
The Psychology of Pandemic Spending
Ernst & Young suggests that even though consumers are relatively optimistic about the future post-coronavirus, we’re in what they describe as “anxious new territory” when it comes to spending habits. EY found four new consumer segments in this pandemic:
- Save and stockpile consumer (35%)
- Cut deep consumer (27%)
- Stay calm and carry on consumer (26%)
- Hibernate and spend consumer (11%)
The EY Future Consumer Index suggests that as the pandemic threat retreats, consumers will return to previous spending habits. For instance, the “Save and stockpile” group will migrate to two new segments: “Remain frugal” and “Cautiously extravagant.”
Because of the changes in the way people shop and how people decide to spend their money, online sales have gone up. But not just for the big chains of the world. Small local businesses have seen an increase in e-commerce revenue as consumers look to avoid in-person contact and follow stay-at-home orders. Even the so-called “save and stockpile” consumer has to eat, which has driven a demand for things like online groceries.
What consumers deem essential has also been altered drastically by the pandemic. Things like blowup pools, which traditionally see a small surge in sales during the summer months, have seen record growth this year as parents look to entertain children during the quarantine.
Likewise, products as diverse as electronics, recreation boats, and even flour (think of all that sourdough bread you made), have seen booms as people look to entertain themselves at home or in socially isolated situations.
“Shop Local”: A Trend Helping Small Businesses
The drastic evolution of consumer spending habits, as illustrated above, may send shivers down the spine of many small local businesses, especially those with 2020 projections for sales of common items that now have been deemed unessential.
But there’s good news too.
Even with browsing out of the picture and storefronts indefinitely shuttered, research suggests that shoppers have a renewed desire to shop locally. According to a Nextdoor survey, 72% of members believe they will frequent local businesses more often after this crisis.
People want to support local businesses, and that includes purchasing their favorite craft beer at the local brewery or a blouse at an area boutique. Moreover, shoppers are willing to go out of their way to do so via online local shopping, curbside pickup, or delivery.
Here’s the proof:
- Big tippers – According to a May CNBC.com story, 68 percent of people tipped more than they usually do between April 9 to April 14 of this year.
- Farm-to-table – Beginning in April, small scale food producers began to see an uptick in sales, according to Reuters. With restaurants closed and some consumers too nervous to wade the tight grocery store aisles, people began to shop locally for produce.
- eCommerce win – Savvy small businesses that invested in online shopping sites pre-COVID-19 are reaping their rewards now. The U.S. Chamber of Commerce cites Gary’s Wine and Marketplace, a small four-shop chain, and their mobile app which has exceeded expectations during this time. Before the pandemic, it had 2,000 users. By the second week of April, 15,000 people were using it—a 750% increase.
- Intentional spending – Shoppers don’t want to see their favorite local businesses fail. And that’s true now more than ever. The National Retail Federation reports that 49% of consumers “have made a purchase specifically to support local small businesses during the pandemic.”
Benefiting from the “Shop Local” Trend
The proof is in the pudding. Consumers see their neighborhood businesses struggle, and they want to help out. Shifting dollars from big-box stores to small businesses is becoming not only popular but on-trend.
“Shop local” is more than just a slogan; it’s a symbol of solidarity in the COVID-19 consumer marketplace. Businesses have had to use unique business strategies to cope with COVID-19, and they can continue to meet consumers where they’re at by leaning into this trend.
Here are ways businesses can capitalize on local shopping:
Communicate with Your Local, Loyal Customers
First things first, you need to build the communication bridge. One helpful opportunity is to update your hours and safety precautions across all platforms. Ensure your information is current everywhere your business is customer-facing, including:
- Physical storefront
- Nextdoor Business Page
- Google My Business
- Social media
Get Discovered and Promote Yourselves in Your Neighborhood
Nextdoor is the neighborhood hub where locals share information, offer recommendations, and keep each other updated. With a Nextdoor Business Page, you have access to local shoppers who live in your area. This provides a great resource for small businesses during this time.
Haven’t created a Business Page, yet? It’s totally free and easy to set up.
Check out our “Video Tutorial: How to Navigate Your Business Page in the Nextdoor App” to learn how to use the Nextdoor App to manage your Business Page and quickly and easily connect with local customers.
Offer Curbside Pickup and Online Delivery
To meet social distancing protocols and to provide consumers peace of mind, try setting up curbside pickup and online delivery services. This doesn’t only apply to restaurants. Retailers of all forms can creatively work with customers both online and in-person to meet their needs.
Partner With Other Local Businesses
Consider other companies that would pair well with your product or service offering. Are you a bagel joint? Say hello to your nearest barista center. What goes great with a new haircut? A brand new outfit. Try to find other local retailers and create promotional content together.
This helps keep dollars in your hometown and shows your community that you care for it and are willing to invest in it. Sounds simple, right? The old equation goes that for every $100 you spend locally, $68 of it stays local. That’s according to Amiba.
How Small Businesses Benefit From Changing Shopping Behaviors
With all this emphasis on shopping locally, small businesses can get in on the action by meeting their customers where they’re at. As a business owner, you may be wondering how to communicate change to your customers. The current times have created an upheaval of day-to-day life for businesses and their customers, making it difficult to connect within the community.
That’s why Nextdoor has been so instrumental in helping small, local businesses flourish.
A Nextdoor survey found that 98% of users say local businesses make a substantial positive or positive impact on their neighborhoods' quality of life. Better than a social networking site, Nextdoor is a community-centered hub full of real people who work and live in your community. There’s no hiding behind fake names. Instead, it’s full of the same people you might meet at your local school or grocery store.
Small Business Trends. 80% of Small Business Owners Say Pandemic Hurt Business – 55% Feel Positive About Future. www.https://smallbiztrends.com
Supply Chain Quarterly. Report: Product launches delayed due to COVID-19. www.supplychainquarterly.com
Ernst & Young. Future Consumer Index: How COVID-19 is changing consumer behaviors. www.ey.com/
CNBC. 7 ways the Coronavirus pandemic is going to change the way we shop. www.cnbc.com/2020/05/01/coronavirus-7-ways-the-pandemic-is-going-to-change-the-way-we-shop.html
Reuters. Farmers prosper in pandemic as Americans shop local. www.reuters.com/article/us-health-coronavirus-farming-trfn/farmers-prosper-in-pandemic-as-americans-shop-local-idUSKBN22C2YX
U.S. Chamber. Investments in E-Commerce Yield Big Gains for Small Business Amid Pandemic. www.uschamber.com/co/good-company/launch-pad/how-local-stores-are-moving-to-selling-online
National Retailer Federation. 3 ways the Coronavirus is impacting consumers’ shopping behavior. nrf.com/blog/3-ways-coronavirus-impacting-consumers-shopping-behavior
American Independent Business Alliance. The Multiplier Effect of Local Independent Businesses. www.amiba.net/resources/multiplier-effect/
Claim your free Business Page to get started on Nextdoor. For resources on how to use Nextdoor to stay connected with your local customers, pertinent news affecting businesses, and more, follow us at @nextdoorbusiness on Facebook.