Value in the Age of COVID-19: Changing Online Behaviors

Today we are launching our first Value Consulting Blog Series, authored by our global Value team. We will be reviewing industry research and addressing topics such as what is changing in the current crisis, how to add value to your users’ adapted experiences, and how to balance innovation with crisis management. 

Since mid-March when shelter-in-place orders began for much of Europe and the US, online and offline purchasing activities have changed dramatically. Now, a little over a month in to social distancing, consumers are continuing to evolve their online behaviors. Many of these changes we believe are indicative of long-term trends, demonstrating the valuable nature of your digital customer experiences.

Optimizely’s Value Consulting team has identified a few key themes:

• New types of users are purchasing online. With physical stores closed and concerns about in-person contact, many users across all ages, regions, and demographics have gone online to fulfill their needs. For some users, this is their first time interacting with online brands, such as grocery delivery, remote learning, and online banking; others have changed their go-to brand (McKinsey, April 2020). Previous user data does not capture the needs of these new users, and testing is crucial to learn about these groups.
• Customers are purchasing new types of items. Needs continue to evolve, and purchasing behaviors are following. Companies must continue to monitor this to understand the rapidly changing popularity of different items, and adjust supply chains and marketing strategies accordingly. Test out UX and messaging (on all types of devices) to display newly popular and in-stock products, and see additional tips from our Services team.
• Users intend to continue many new behaviors long-term. Companies that have experienced a surge in traffic are uncertain about how long this growth will last; is this a new normal or a temporary change? While time will tell, consumers have indicated an initial intent to continue many of their new online behaviors post-crisis. Rather than adopting a wait-and-see approach, it’s important to understand these users now.

Nearly all businesses are struggling, but overall, those with strong online channels have emerged with a cautiously positive outlook. As our partner ContentSquare has noted, online traffic, page views, and purchases overall have increased dramatically since the shelter-in-place orders began – not only compared to an average week in Jan-Feb 2020, but also with strong growth each week in online demand.

Source: ContentSquare, COVID-19 eCommerce Data Impact Hub, 22 April 2020 (week of April 13-19)

Similarly, AppAnnie recorded the highest ever quarter for consumer spend on app downloads, with 31 Billions apps (!!) downloaded globally between Jan-March 2020 and +20% YoY growth in the time spent in apps per week. 2 in 5 apps downloaded were Gaming apps.

Get to Know New Types of Users

This increase in activity is not only coming from existing, brand-loyal customers and personas. Rather, online usage and purchases across many industries spans all ages and regions, including many first-time users.

McKinsey & Company surveyed global consumers to ask about online activities. In Germany, they found many categories where respondents said they had used online services for the first time in the past few weeks because of COVID-19, including (McKinsey, April 2-5 German survey):

• Video Conferencing for professional use: 4 in 10 users are using this service for the first time (32% of all respondents)
• Remote learning for children: 3 in 10 are first time users (29% of all respondents)
• Online personal training/fitness and Wellness apps: 3 in 10 are first time users (22% and 23% of all respondents, respectively)

Similarly, in the US, McKinsey focused on generational groups to study the differences (McKinsey, March 30-Apr 5 US survey). Across all age groups, the group with the highest category planned increase in online spending for mid-April was Gen X (currently aged 40-54), buying children’s products (non-food) online. For Baby Boomers (aged 55+), the largest growth in online spend was entertainment at home, followed by online groceries.

While younger generations showed a higher likelihood overall of increasing online purchases, the rapid increase for certain categories by older populations show these users growing their online activities out of necessity.

Note: See McKinsey’s Global Consumer Sentiment hub for more countries and evolving information. The Boston Consulting Group has also run a similar survey; see BCG’s generational insights here (Mar 27-30 survey).

New Types of Online Purchases

During the pandemic, purchasing behaviors for all demographics have evolved. Growth categories in March included surprising hot items such as bread machines and hair coloring. ContentSquare has analyzed their data weekly and determined that online traffic and purchases have closely followed Maslow’s Pyramid of Needs, with users first meeting physiological needs (online groceries, pharmacies), followed by safety (employment, finances – such as work-from-home monitors and furniture, as well as online banking and financial services). Connection has been fundamental throughout this period, with telcos and ISPs reporting record usage and high call volumes as users demand quality service.

As we’ve settled into a steady state, ContentSquare observed weekly online purchases focusing on amusement and self-improvement, such as video streaming, gaming, toys, home improvement, sports equipment, and language learning. Demand for fashion has returned, with +33% more online transactions for fashion than in Jan-Feb 2020. Indeed, this analysis followed the peak in online searches by users looking for hand sanitizer, then food delivery, and now… hot tubs.

Finally, while purchasing behaviors of your consumers have evolved, their device usage is also changing. As the New York Times noted, this virus has “changed the way we internet”. Users are favoring larger screens rather than phones, with increased traffic to desktop websites. After years of prioritizing optimization for mobile, it’s crucial to ensure that your desktop and cross-device experiences are also in top shape.

Here to Stay?

In these uncertain times, we don’t know how user behavior will continue to evolve. Will new users and those with new online behaviors continue as a new normal? Or will a gradual reopening of economies result in consumers returning to their old ways?

The good news for companies that are experiencing growth is that initial research is indicating many consumers do intend to continue to utilize their new online behaviors. McKinsey asked US consumers which online services they’d used since the crisis began and their intent to continue using these services long-term. Across almost every category that had experienced growth, they found that at least 4 in 10 respondents intended to continue or increase usage after the crisis ended. For example, 79% intend to continue using their new Wellness Apps, and 69% of new users intend to continue ordering meal-kit delivery.

We don’t know what lies ahead, but consumers are telling us that they want positive customer experiences online. Optimizely is here to help in these difficult times.