US Retail Channel Trends and Disruptions - COVID-19 Impact

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US Retail Channel Trends and Disruptions - COVID-19 Impact

US Retail Channel Trends and Disruptions — COVID-19 Impact: Consumer Expectations

U.S. consumers show varying motivations for wanting retailers to offer digital shopping options going forward. They also have different priorities regarding specific shopping options/services, including delivery, curbside pickup, contactless payments, "online inventory status updates," and "in-store mobile wallet acceptance." Below is an overview of the findings.
  • PYMNTS' survey showed that U.S. consumers are showing no indication of reverting back to pre-COVID-19 shopping habits. About 35.7% of consumers were using online channels to purchase retail goods as of May 23, 2020, compared to 29.2% as of April 11, 2020.
  • PYMNTS conducted another survey of over 2,000 U.S. consumers to determine "how their shopping behavior continues to evolve as state economies begin to reopen." It also explored what consumers want or expect from retailers. The firm has also been tracking over 14,000 U.S.-based consumers since March 23, 2020.
  • In a quest to understand the evolving consumer behavior and expectations, the survey, dubbed "The Great Reopening: Shifting Preferences," identified four main persona types:
    • Social shifters: are consumers who are currently shopping online but are most likely to revert to shopping at physical stores and engaging in their pre-COVID-19 activities.
    • Safety shifters: are consumers who embraced online channels to shop and are the most concerned about getting infected by COVID-19.
    • Convenience shifters: are consumers who prioritize convenience and speed, and their choice of merchants is based on digital offerings.
    • Office shifters: are consumers who have been working from home but desire their old outdoors and office lives.
  • While safety shifters' comparably higher concerns about COVID-19 has led them to digital channels, they are also the demographic that misses shopping at physical stores the most (63.6%). About 62.8%, 57.5%, and 52.6% of social shifters, convenience shifters, and office shifters miss shopping at physical stores, respectively. Overall, the desire to shop at offline locations among all four demographics is higher than the U.S. average (52.1%).
  • Notably, U.S. "consumers who have gone online to do their grocery shopping are the most likely to say they consider it crucial that merchants provide digital alternatives." In line with this, about 52.3% of safety shifters said that it is 'extremely' or 'very' important for retail merchants to provide digital options going forward, compared to 43.1%, 42.9, and 39.5%, of social shifters, convenience shifters, and office shifters, respectively.
  • However, retailers should understand that consumers in all four groups have varying motivations for wanting retailers to offer digital shopping options going forward. A majority of social shifters (47.5%) and safety shifters (47.2%) demand for online shopping options because of their concerns for safety, compared to 41.6% for convenience shifters. On the other hand, convenience shifters are the most likely to cite convenience (21.4%) and speed (21.4%) as their motivations for demanding online channels.
  • The PYMNTS survey found that despite all persona groups agreeing that retailers must offer online shopping options, they have different priorities. About 83.5%, 84%, 73.4%, 70.7%, and 43% of safety shifters want merchants to provide delivery, curbside pickup, contactless payments, "online inventory status updates," and "in-store mobile wallet acceptance" services, respectively. While safety shifters are the most demanding (requiring retailers to offer more options than the other groups), the survey shows that all groups seem very interested in all five options.
  • PYMNTS states that "many consumers are using digital options like online ordering for curbside pickup and mobile order-ahead more often than they did before the COVID-19 outbreak, and will continue their new digital shopping habits into the post-pandemic world. Their propensity to maintain these habits may vary by how their online behavior has shifted during the last few months, however." Regardless, there is a high likelihood that they will still require retailers/merchants to satisfy their current expectations going forward.

US Retail Channel Trends and Disruptions — COVID-19 Impact: Retailer Insights

Target has enhanced and expanded its same-day delivery and BOPIS services. Target's CEO noted that these are uncertain times and Target's best strategy is to stay flexible. Walmart has managed to efficiently integrate the operations of its digital and physical teams, which has led to the improvement in its BOPIS and the introduction of express delivery.


  • According to Brian Cornell, Target's CEO, Target has been offering customers several "options for receiving goods on the day of digital purchase." Customers can either pick up their items at Target stores or have them delivered via Target's Shipt. Both services accounted for about 5% of the retailer's comparable growth in sales.
  • Cornell added that Target's "enhanced digital services" were instrumental in attracting new shoppers and promoting loyalty among existing customers.
  • According to Cornell, the retailer's decision in 2017 to adopt the digital shift by serving as fulfillment centers paid off during the pandemic as more and more consumers embraced Digital 3.0. Target's strategies have enabled it to "capture more than its share of ecommerce" with digital sales surging by 141%.
  • Also, about 80% of the retailer's digital sales in the first quarters of 2020 was fulfilled in stores. Demand for "buy online and pick up in-store (BOPIS)" services surged with same-day pick up increasing by
  • 278%. Since mid-March over 5 million new customers went to, and over 2 million used Target's (BOPIS) services. Additionally, about 70 million shoppers have enrolled for the "Target Circle smartphone app."
  • Cornell observed that there are also several non-digital consumer shifts caused by the pandemic, and Target is ahead of them. It is striving to satisfy consumers' desire for safety by focusing on in-store safety measures in a bid to "make Target America’s easiest and safest place to shop." The retailer will continue being committed to offering contactless payments and shopping, as well as other in-store safety measures, past the pandemic and for years to come.
  • Ultimately, Cornell said that these are uncertain times and Target's best strategy is flexibility. He said, "Right now, we know that consumers are living differently. They’re shopping differently. They’re adapting to the new environment. So, it’s really a time of uncertainty, and it’s why we’re making sure we’re as flexible as possible."


  • In an interview with the Wall Street Journal, John Furner, Walmart's U.S. President and CEO, said that there is a high likelihood that the current digital transformation among U.S. consumers will remain part of their shopping habits even past the pandemic. He believes that many changes will be permanent.
  • Since the exit of the previous U.S. CEO, Walmart has managed to efficiently blend the operations of its digital and physical teams. Furner reported that the pandemic has accelerated and smoothed the integration process as Walmart responded to the "rapidly shifting retail environment."
  • In the past months, Walmart brought the digital and physical teams together. Furner said that they have managed to bring synergy to both distribution channels, and they are now able to "approach the business as one team." He said this has had more positive effective than anything else the retailer has done.
  • These developments enabled Walmart to improve and expand its BOPIS services. Furner noted that Walmart's 'reshop rates' and customer satisfaction levels among digital shoppers has increased, especially among BOPIS customers. At some points, Walmart's BOPIS sales grew by up to 300%.
  • Furner also said that Walmart's key advantage is its omnichannel nature. He said, "Customers will continue to come back and return to shop either online or in-store as long as we deliver. It’s really the nature of being an omnichannel retailer that has helped Walmart in the last few months."
  • Walmart's strategies seem to have paid off as the retailer's online sales in the first quarter of 2020 soared 74%. Overall sales increased by 10.5%.
  • Furthermore, Walmart began offering express delivery services in May 2020, that would deliver digital orders within two hours. The project was initially launched at 100 locations, but will operate in 2,000 locations. The $10 service, dubbed Walmart Express Delivery, enables shoppers to order across over 160,000 products ranging from food and consumables to general merchandise.
  • Similar to Walmart's home delivery curbside pick up options, the new Express delivery will adhere to the retailer's contactless safety protocols made possible by its 74,000 personal shoppers charged with picking and packing the shoppers' orders.
  • In the Wall Street Journal interview, Furner said that, "Walmart’s physical store network might end up being the company’s secret weapon, keeping up with consumers’ desire to access the goods they’ve digitally purchased as quickly as possible. That’s what has kept Walmart performing well during the pandemic period — and it’s what will likely keep pushing Walmart forward when recovery really gets underway."
  • Additionally, Walmart added it employee count by over 200,000 for the benefit of fulfillment and distribution centers. It also launched the "Neighbors Helping Neighbors," which allows members to request or offer shopping assistance at Walmart locations. Vulnerable members can coordinate the delivery and pickup of their items with their neighbors.