What also happened during COVID is not only are consumer shopping behavior changing, but retailers are pivoting, they're forced to change the shopping experience. Now in order to bring people into their stores, retailers started to improve their offline customer experiences. What shoppers were saying, is that when they went into the store, they saw big improvements. I can even tell you just anecdotally, my local grocery store was suddenly cleaner. It was much easier to shop, because they were expecting me to buy groceries there. They had more interesting things. The physical retailers, in order to get people to come into their store, felt more need to improve that experience and the experience got better, in physical stores. We also saw that, brand loyalty was lacking. 48 percent, about 50 percent of respondents said, that during COVID, they couldn't buy the products that they had typically bought for a number of different reasons. Maybe they weren't going into the physical store, so they were shopping online and they were buying different products online, so they were buying the competitor's online alternatives. Some of it was because of stock outs, or price or something like that. A very big percentage of respondents said, that they had switched. They were not buying the products that they bought before, as a result of COVID situation. That is what happened in December 2020, looking at how shopping behaviors changed. Now the other thing we were trying to figure out is, how does in-store experience affect your online behavior. How does when you go into that in-store, if you have a positive in-store experience? What is that going to do about your spend, and how you're going to react to that positive experience? We specifically asked, if you have a positive in-store customer experience are you more likely to spend more at that visit. You can see more than 50 percent, 60 percent said, yes if I have a good in-store experience, I will spend more. 30 percent said no, it's not going to affect what I'm going to spend, it's what I expect. A good experience is what I expect it doesn't affect what I spend. Another, whatever is leftover 10 percent said, I don't know, who knows? Or I've never had a positive experience. But it's really interesting to see that more than half said, you know what a good in-store experience is going to affect how much I spend. Now, we're going to try to uncouple part of the reason why that happens. Now the next question we ask, is when you have a positive in-store customer experience, how does that affect your online experience? Because now, and understand what this question is implying, and I'm going to double down on this implication, is that what happens in-store does affect online also. I'm going to make this point that it's not online or offline, it's omnichannel. These two things interact. When you have a positive in-store customer experience, are you more likely to purchase from that brand online? Look at this, 65 percent of the people say, yes. A good in-store experience makes me more likely to purchase other products online. That is very interesting. That says even if people are purchasing more online than in the past, it is not independent of what is happening in the physical store. Some people, 22 percent, 23 percent, no it doesn't affect it, and the rest say, I don't know, I've never had a positive experience, etc. But what to focus on here, is that more than half, 65 percent said yes. What happens in the physical store does affect what happens online. The last question we asked is, what are the factors that influence your in-store customer experience? What can we do to make your in-store customer experience better or what affects it? A full third, 33 percent, said, "The products that I see, the variety that I see in the store, that's going to affect how I pass or think about this in-store experience." The variety, the perceived variety, the actual variety, the assortment, affects what's happening in my store. But almost as much, 31 percent, say it's not just about the products and the variety, it's also about the service. This is really interesting to me. What I'm talking about is why I'm going into the store, it's about the product I buy, but it's also about the interaction, the customer experience. Keep that in mind because I'm going to build on that idea. A full two-thirds of the customers or the shoppers say what effects in-store experience, the products and the experience. The others say things that I'm going to categorize as amounts to convenience factors. If the store is laid out well, the organization of the products, that affects how fast I can shop, how much time does it take me to check out and pay? How can I find information and whether or not health and safety protocols are there. All of that, I'm going to argue, is about convenience and organization time, things like that. If I look at this chart and I simplify it just for the point of argument, a third of the people say it's about the product, a third say it's the customer experience, and about a third say it has something to do with the convenience of the shopping experience. We're going to build on these ideas in the framework that I present later on what does it take to win in shopping experiences going forward into the future? One of the things we're going to really spend a lot of time looking at is what happened during 2020. What can we learn about shopping behavior, because this seems like a big experiment that we put on the entire world to try to figure out shopping behavior. We saw a lot of activity in grocery stores during COVID. In the beginning, it was essential retail, it was the only things you were allowed to go into the store. By the end of the year some of the rules were relaxing. We saw more behavior, more shopping and other things. The first thing to note is that it varied by different retailers. But in 2020 if you look year over year 2020, compared to 2019, there was a little bit differences in the different retailing chains. Albertsons, and that represents a bunch of different supermarkets, Safeway Bonds, I think is at Albertsons, but it's a bunch of stores. They had increase in shopping behavior in visits to their store in 2020 compared to 2019. Publix are a decline and Kroger saw a little bit of a difference, a little bit uptick. Just in general, looking at the whole year, that's what you saw in terms of grocery store. Grocery stores, interesting to look at 2020 and to try to figure this out because the first half of the year is going to be different than the second half of the year. During the second half of the year, June to November. You're going to start to see how when the restrictions are relaxed a little bit, what happens. What's very interesting here is we're still during COVID. You're still worried about going to stores. In some of the chains you saw, the visits went up. We saw that same pattern from Albertsons to Publix to Kroger's that Albertsons had increases in visits in the other two, maybe less. What's really important in this data from June to November is the amount of time that they spent in the store went up significantly. The way we're interpreting this is you don't want to go into stores too often because you're afraid of exposing yourself to some risk. You go to stores less frequently, but when you're there, you spend more time in the store. We know, especially in grocery, the more time you spend in the store, the more likely you are to be buying more items or at least exposing yourself to different types of products and learning about more products. But most likely in a grocery, the more time you spend in the store, the more you're likely to buy. We saw big upticks in the amount of time spent in grocery stores during the second half of COVID. The other thing that we saw. If I go back to that original data that I showed you, there were two points that I made in that slide. I should now reiterate those points, what the two point was. Was the first point and that's what I just talked about, was yes, during COVID you spent more time online. But and the point I was making there was you still wanted to go into physical stores and your behavior in physical stores affected your online behavior. Although COVID said, yes, you're spending more time online, it had implications for the time you spent in the store also. The second point I made in that original slide on those survey effects was that COVID cost switching. Because you couldn't get the products you wanted, because of stock out, or the supply chain wasn't in the right place, you switched to brands that you weren't used to buying. Also, when you moved from physical stores to online shopping, you tended to buy things online from a competitor rather than the stores, the products you were typically going to buy in the store. You saw a lot of switching. Now is the second big point on that slide, but even though COVID caused some switching, we still see very strong patterns of loyalty. That's very interesting and I'm going to build on this idea as we go forward also. Fifty seven percent of the consumers, and this is in a different study, but trying to get really drilled down on this loyalty versus switching effect, which was a big thing that we observed during COVID. Are people really trained now to switch all the time or do they still want to be loyal? What we know, 57 percent to almost 60 percent, way more than half want to remain loyal to a brand, even during the chaotic 2020. Forty five percent of the consumers. This is very important so listen to this. Forty five percent of the consumers say, yes, I want to remain loyal, I remain loyal, and I would like to feel like the brands appreciate my business. This is an important point. That consumers want to feel like they have a relationship with the retailer or with the brand. Say thank you to the customer. Remember to say thank you to your customers for staying loyal. That customer wants to feel like the brand appreciates their business. They also want to feel like the brand knows me or the retailer knows me. If I'm loyal to you, you should know me. It shouldn't be that every single customer that comes into the store is treated the same. You should know who I am. That's an important idea. We can use that from personal relationships. Local retailers certainly can do that, but we can also do that with data. The other thing and this is going to lead to what I'm going to talk about later when I talk about brands, is the brand has to come to mean something else. Now you're going to see shoppers go to brands and go to retailers where they feel like we have a common cause or a common set of values. There's a lot of intuition in this data as to what it takes to remain loyal or to keep your loyal customers coming back. There's a couple takeaways. The points that I'm making are important, show appreciation, show you know the brand, and have a common set of values. The other thing that's interesting is if you want to know what it takes to keep your customers loyal, ask them. They'll tell you. Among those who switched, why did they switch and what does it take to bring them back? Now, the people who said they switched during 2020 and remember, this is a chaotic year. Things weren't available. All things were going on. A year of some economic distress. Some people, 18 percent said the reason they switch is because their brand wasn't available. They had to find something else. Some of them said 16 percent. Look, it was a better price. It was a discount. Like money was tight. I lost my job. Whatever it is, money matters. I'm going to go after the brand that offers me the best price. That's what's motivating the switching. To my first point, when we now ask marketers, what's important to you? They're going to say collecting first-party data is a 2021 priority and frankly, it's a priority going forward. What's first-party data? That means first party is your consumers, your end-user. I need to get data for my end-user, from my customer so that I know how to give them value. Now, why is this important? Because some brands who sell in wholesale do not get first-party data. The retailer gets the data and the brand does not get the data. This becomes a priority going forward for those brands that are not connecting directly to their end-user, they're connecting through an intermediary to their end-user, now say it's very important to get first-party data.
