The U.S. has mobilized the largest COVID-19 vaccination rollout of any country in the world. The Biden administration has set May 1 as the date that all states will be required to lift vaccine requirements to include any adult who wants to get the jab. President Biden says he’s hopeful that the U.S. will be ready to celebrate a return to normalcy come July 4. After a year of living life under lockdown, all of that is certainly welcome news.
Why, then, do most Americans still think it will take until this time next year — March of 2022 — before a return to the physical world as they left it in March of 2020 is likely?
That’s one of the big headlines from PYMNTS’ latest installment (the tenth) in our year-long research project exploring the impact of COVID-19 on consumers’ retail, grocery shopping and restaurant behaviors. PYMNTS studied a population-based sample of nearly 22,000 consumers, starting on March 6 over a 12-month period, to methodically measure the U.S. consumer’s shift to digital for buying retail products, grocery shopping and eating food from restaurants. And to better understand when they think that the physical economy, as it used to be, will reopen.
We have consistently found that the consumer’s instinct for when things in the physical world will truly return to how they define normal is generally more pessimistic than that of most pundits, governments and the hopeful speculation of the business community.
And, at least so far, it’s generally more realistic.
Reading The Wrong Tea Leaves
At the start of the pandemic, in March of 2020, when governments said the shutdown would last two months, the U.S. consumer said it would be more like August.
In June of 2020, when the conventional wisdom called for a reopening by the end of the year, the average U.S. consumer added about six months to that timeline. In December of 2020, they added 13 months.
Based on survey data from Feb. 26, 2021, the average U.S. consumer added another year. That’s March of 2022. (Those who have been or plan to be vaccinated said it would be a month earlier.) Definitely not this summer.
And that was their projection despite news at the time of the study that everyone who wanted a vaccine could get one by summer and that the COVID curve had started to flatten, with some states loosening reopening restrictions.
So, what’s the disconnect?
For consumers, returning to the physical world doesn’t seem to be based on state governments lifting restrictions, or their reassurances that there will be enough supply for all adults who want a vaccination to get one. It’s about the experiences that consumers will find when they remerge — and the restrictions that may still exist when they do.
By summertime, will store fitting rooms remain closed, or will consumers, as they once did, be able to pick clothes off the racks, go into fitting rooms and try them on? And will they feel comfortable trying them on even if they can?
Will navigating store aisles still involve sharing space with sales associates who are cleaning and steaming merchandise?
Will their favorite restaurants and coffee shops be open — or will new ones have reopened in their place? In either case, will they have their pre-pandemic look, feel, experience and buzz? Will reopened fitness studios still have plexiglass partitions and require masks? Will consumers be able to shower after their workouts there?
For summer vacation travel that doesn’t involve visiting family and friends, will the hotels they want to stay in be open? Will the restaurants be open and will room service be reinstated? Will the shops and restaurants on Main Streets be open, and will those cities and towns be vibrant?
Of course, vaccinated consumers are ready to get out and about. More than 60 percent of the consumers PYMNTS studied who have been or plan to get vaccinated say they are raring to break free from quarantine. We’ve all read the stories of the vaccinated Baby Boomers and seniors taking their post-vaccine victory laps. As more and more people get vaccinated, more and more people will be busting loose.
Sure, watching a concert inside a gaming metaverse or livestreamed on a big screen in their family rooms was better than going a year without seeing any live performances — but it isn’t even close to the experience of being in an arena with thousands of screaming fans.
Even eating restaurant food at home is no substitute for eating it at the restaurant — even though PYMNTS research shows that 38 percent of consumers who did that used restaurants’ mobile apps to order ahead and pick up to eat at home.
It’s those experiences in the physical world for which there is no acceptable digital substitute — being tourists, going to live events, eating in a crowded restaurant on a Friday or Saturday night, going to the amusement park with the kids — that consumers really miss.
But more than simply re-engaging in the physical world, consumers want a return to a physical world that is safe — and that doesn’t include the physical-world reminders that COVID remains an unwelcome intruder.
That’s why consumers believe it will be longer than a few months, even longer than the rest of the year, before the experiences they remember so fondly, miss so much and want very much to return to the way they were before the pandemic. They realize it will take time before they can have those experiences again.
Although many consumers want to get back to a lot of the things they loved about the physical world, many say they plan to stick to the digital-first ways they learned in the last 12 months.
Where It’s Digital-First — And Maybe Even Digital-Always
Before the pandemic, spending data showed a consumer who was more interested in experiences over goods — more travel than trinkets, more dining out than diamonds, more concerts than clothes. As the pandemic shifted consumer spend to goods, it also shifted this experience-centric consumer’s focus to who and what made it easy for them to buy what they need — an experience that’s defined by convenience and influenced by the brands that made it easy and safe.
Over the last 12 months, we’ve watched as consumers have honed their digital-first skills across all of the categories they shop and evaluated the brands that delivered the best shopping and buying experiences.
This now digital-first consumer is no longer forced to think about the channel as their shopping starting point, and has shifted their focus to the products they need.
“ Buying groceries “ doesn’t only mean going to the grocery store. According to the latest PYMNTS research, 62 percent of consumers who now do less of their shopping in the physical grocery store say they won’t revert to their in-store shopping experiences even after the pandemic officially comes to an end.
The conversation that once started with “I have to go to the store because we are running low on paper towels” has become “we’re running low on paper towels.” And then a decision is made about the easiest way to buy and get them when they are needed.
But it’s not just groceries. In just 12 months’ time, PYMNTS research shows that the U.S. consumer is as likely to buy anything they once bought in a physical store, online. That’s consistent across generations and all purchase categories: Boomers are just as likely as bridge millennials to buy their clothes, electronics and even home furnishings online as they are to take a trip to the physical store to make that purchase.
There’s also no guarantee that the physical channel consumers once preferred is their go-to in the digital-first world. The brands that make it easy and seamless for consumers to outsource those once-essential shopping purchases to a digital channel will get and keep that business.
And likely more of it — as the U.S. continues to navigate vaccine rollouts, consumers will continue to lean on their digital-first heroes to get what they need. PYMNTS research shows that nearly half of all U.S. consumers have now shifted to digital channels to make retail purchases, buy groceries or eat food from restaurants.
While they are raring to bust loose from the limitations they’ve faced from the quarantine, nearly 80 percent of them say they’ll keep all or more of their habits even as the physical economy reopens.
Why wouldn’t they?
It’s not just the convenience that digital channels provide that consumers like, or the efforts brands have made to make those digital experiences satisfactory. It’s the time that consumers save when they use them.
A consumer who has now delegated these everyday purchases to digital channels can better use that time to do other things, like the important physical-world activities they’ve had to give up as a result of the pandemic, and for which they haven’t found digital-first substitutes.
The Competition For Consumer Time — And Spend
Harry Selfridge, who founded the iconic British department store Selfridges in 1909, was credited with ushering in a new retail shopping paradigm. Until then, department stores were mostly about making it efficient for consumers to buy what they needed all in one place.
Selfridge aimed to turn that idea upside-down by creating a destination defined by the experience of being in that store. In addition to making goods more accessible to the consumer, he equipped the store with things that made shoppers want to visit and then spend more of their time there — cushy chairs, restaurants, reading rooms, even a “Silence Room” where tired shoppers could relax and kick back. Selfridge wanted to turn shopping from something that consumers had to do to buy what they needed into something they wanted to do — and do more of in his store.
The silver lining of the pandemic is that it has given all sectors of the economy, not just retail, the opportunity to think deeply about how to bifurcate the delivery of the customer experience — and how to use digital-first channels to replace or enhance what could once only be done in the physical world, and adapt physical channels to deliver a better, richer, more relevant experience.
That’s equally true for doctors and their patients, bankers and their accountholders, employers and their workforce, and retailers and their customers.
As the world contemplates the physical reopening of the economy, competition for the consumer will now take place on a different stage. In a world in which digital now influences the decisions consumers make about their time, the money they spend and who’ll they’ll spend it with, it will take more than a vaccine and a promise to reopen to get consumers fully re-engaged into a physical world routine. Consumers have tasted the efficiencies and value-added dimensions that a digital-first experience can provide — and for that, there’s no turning back.
Even for those physical-world experiences that consumers say they miss the most.