As Stores Reopen, Which Customers Are Most Likely to Return?

New research reveals how consumer preferences have changed and how retailers can adapt.

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The COVID-19 pandemic and associated lockdowns throughout the U.S. have dramatically affected shopping behavior and shifted priorities for retail customers. While the pandemic has resulted in revenue declines for the majority of businesses, some brand owners and retailers have seen significant growth by adapting their offerings and communication to capitalize on new customer needs and behaviors.

We investigated the scale and variation of the lockdown’s impact on shopping behaviors across a number of product categories, fielding three surveys (in late March, late April, and late May 2020) among a representative sample of more than 5,000 U.S. households. The key findings of our March survey formed the basis of our article “Growth Opportunities for Brands During the COVID-19 Crisis.”

As it became clear that the reopening of the economy would be phased, we extended the focus of our April and May research to identify a new spectrum of customer segments and the factors influencing their likelihood to return to in-person shopping. This article draws on these findings to identify how retail stores and brand owners that rely significantly on physical retail can reengage with former customers or tailor their offerings and communication to appeal to these new customer segments.

What We Found

Our research (see “The Research”) shows that, as the lockdown eased, retail shoppers could be grouped into five segments, each of relatively equal size, based on their motivations for in-person shopping — for example, whether shopping is an activity that they enjoy in its own right, as part of a sociable lifestyle, or simply as a means to an end.

In order to understand the factors that might motivate each customer segment to return to in-person shopping, we also asked respondents about their quarantine experience and associated emotions and attitudes. This revealed wide variability in these situational factors that greatly exceeded the differences observed on traditional demographic factors.

Studying the situational, attitudinal, and behavioral factors at play (more than 60 in total) has allowed us to develop detailed and actionable customer segment profiles, together with recommendations for how retailers and brand owners can appeal to each segment in a relevant and emotionally compelling way.

Segmenting Shoppers Based on Their Motivation

A key component of our approach was to ask respondents to evaluate the degree to which they had missed nine aspects of the in-person shopping experience. These included functional aspects such as “familiarity with the store layout,” experiential aspects such as “being able to touch and feel things,” and social factors such as “shopping with family and friends as a social activity.” We also included the option “There is nothing I miss about in-person shopping.”

Using a machine learning technique (statistical k-means clustering), we identified five major COVID-19-related shopper segments: functional, tactile, experiential, diversion, and reluctant. (See “Relative Importance of Nine Shopping Factors to COVID-19 Customer Segments.”)

Functional shoppers are willing to return in-person to retail environments where they are already familiar with the layout and range of products offered. However, they remain concerned about health risks and won’t be going out without their hand sanitizer. This segment also values the experience of coming across new items and interacting with other shoppers, as long as the store has good safety protocols in place. They are keen to try something new, especially if it comes with a discounted price tag.

Tactile shoppers have been bored at home and are eager to hit the stores once they perceive there’s a relatively low health risk during the pandemic. They feel lucky to have kept their jobs but have overdosed on Zoom calls and Netflix and now are excited to get away from the internet browser and back to in-person browsing. When they are finally able to visit their favorite retailers, they will be thrilled to actually touch items (assuming it is allowed) that they have previewed online and will be open to trying new brands if products feel as good in real life as they looked on screen. Tactile shoppers have high standards, though, and will not return as customers if the experience is less than great.

Experiential shoppers aren’t at the store just to check off items on a shopping list. For this consumer segment, a shopping trip is an event in itself, offering the promise of novelty and the joy of finding something they weren’t actively looking for, with the added opportunity to bring a friend along for the experience. They are especially responsive to brand recommendations from people they trust and always keep an eye out for items they can recommend to others.

Diversion shoppers are eager for the excuse to get out of the house and were among the most excited about stores reopening — a little retail therapy is what they need to end the monotony of lockdown. A price discount might persuade a diversion shopper to try a new brand, and they’ll buy again if they like their purchase but won’t be chatting much to their friends about it. Diversion shoppers can take or leave the social aspect of shopping.

Reluctant shoppers were never ones to be excited about in-person shopping, even when there wasn’t a pandemic. Whether they go to a store or shop online, they just want to get what they need, avoid distractions, and get out again. This shopper appreciates the greater range of options now that stores are opening up again, but for them, shopping was and always will be a chore — convenience and simplicity are the main drivers that keep them coming back. To the extent that they have adapted to online shopping, reluctant shoppers are among the least likely to return to stores.

We profiled each segment across a large number of situational, attitudinal, behavioral, and demographic variables. (See “COVID-19 Customer Segment Profiles.”)

Perceived health risk, quarantine mood, financial situation, and level of stress were each assessed on a seven-point scale. The percentages shown are the proportion of respondents in each segment who rated their experience as higher/lower on this dimension. (The remaining respondents said things were “the same as elsewhere,” “neutral,” “no change,” and “moderate,” respectively.)

“Supervising children’s schooling” represents the percentage of respondents in each segment who reported having children aged 14 and under at home who required assistance or supervision with remote schooling.

The “influenced to try new brands” score is an index based on the percentage of respondents in each segment who reported having been influenced to try a new brand by either a promotion, discount, or recommendation, relative to the percentage of trial among the overall population.

Finally, we measured sociability on a six-point scale ranging from “sociable” to “reserved,” with index scores above one representing greater sociability.

How Retailers and Brand Owners Should Target Each Segment

In our previous article, we put forward a framework for action based on a modified version of the four P’s of marketing (product, price, promotion, and place) that we call SAVE (solutions, access, value, and education).

Functional shoppers: These customers desire routine and familiarity despite the disruption. Office supply chain Staples recognized that this segment represented a majority of its customers and that many did not like to order online. The retailer now provides personal shoppers who take orders and source the items in the stores while customers remain in their cars. Extending this model, convenience store chain Wawa will have its first drive-through-only location by year’s end.

Safeway has taken a different approach to meet this segment’s need for familiarity by expanding the search options on its website. It is common for grocery store customers to search online by brand or product, but Safeway’s innovation was to simulate the in-store experience online by enabling shopping by aisle.

Tactile shoppers: This segment seeks opportunities to engage with products. The concept of a personal shopper is not new for many people familiar with high-end fashion brands, but the introduction of the service by thrift store Uptown Cheapskate is a welcome development for the tactile shopper in the age of COVID-19. Based on the responses to an online questionnaire, an Uptown Cheapskate employee selects garments matching the customer’s specifications. The retailer keeps customers coming back by featuring new outfits each day to entice them to connect with personal shoppers in their local markets.

Tactile shoppers love the browsing experience. Ted Baker (a U.K.-based luxury brand) launched a digital pop-up shop during the lockdown that featured limited-edition pieces and donated 100% of profits back to the community. This kind of event-based, product-centric customer experience speaks to the motivations of the tactile shopper.

Sephora recently joined traditional retailers H&M, Abercrombie & Fitch, and Target in using Instagram’s digital store platform to allow shoppers to buy products directly from its Instagram feed, expanding opportunities for new kinds of browsing, engagement, and sales generation.

Experiential shoppers: For this segment, it is as much about the people as the products — the “who” and the “how” of shopping as much as the “what.” Brick-and-mortar store owners might respond to the continuing health concerns of these customers by creating exclusive shopping hours for them (similar in concept to the “senior hours” offered by many warehouse clubs and grocery stores) or even dedicated venues. An example of the latter is the concept of the retail closet — small retail spaces within commercial or multifamily properties, where brands can bring their collections in front of customers, who can come in alone or with a few guests. This type of personalized and exclusive shopping environment is safe and entertaining, especially for the experiential shopper.

In the online environment, fashion retailer Madewell caters to this segment by satisfying their curiosity with unique grid-style curated collections and “inspiration boards” complete with videos. In an effective replication of valued aspects of the in-person shopping experience, customers can watch each product in use as it would be on a “typical day” while also receiving recommendations based on their selections. Madewell, along with other brands such as home goods retailer West Elm, have been ahead of the curve by using this strategy even before the pandemic. They are leaning into this strategy, appealing to the experiential shopper by allowing discovery and exploration while mitigating health concerns.

Diversion shoppers: These shoppers are looking to escape the monotony of their daily routines during the pandemic. The startup COVID-19 Essentials provides you with an unchallengeable reason for getting out of the house: stocking up on COVID-19 safety essentials. The pop-up shop features an array of face masks, UV-light sterilizers, and other pandemic accessories.

Atelier Restaurant in Canada was renowned for a dining experience that was as much about abstract art as food, featuring fantastical dishes reminiscent of snow globes, flower arrangements, and fashion accessories. When pandemic restrictions forced the restaurant’s closure in March, Atelier quickly pivoted to a pickup version of its multicourse tasting menu. Chefs compressed 12 courses into five and sold limited tickets at $100 per person, allowing only 10 vehicles per service, on weekends only. In what was often their first outing in months, customers brought their own picnic tables to dine tailgate-style in nearby parking lots or drove around the block before returning to pick up the next course.

Reluctant shoppers: These customers are a key focus for businesses that pivoted to digital offerings during the pandemic in order to continue to serve their core customers by migrating them online. Buffalo Exchange, a thrift and clothing consignment store, has transformed its consignment process to be completed totally online and by mail. A consignment customer can request a bag through the mail and fill it with 20 to 40 items of clothing. Once the bag is received by Buffalo Exchange, the commission payment for saleable items is digitally transferred to the customer, and any items not suitable for resale are mailed back. This example provides a practical road map for physical retailers to reimagine their shopping experience online, or for brand owners considering a move to a direct-to-consumer model.

The coronavirus and associated stay-at-home restrictions have given rise to new and evolving customer needs. Now that nonessential stores are starting to reopen, the segmentation presented in this article provides an actionable framework to help brand owners and retailers understand and address this new spectrum of consumer needs and preferences. Specifically, we highlight how businesses can tailor their offerings and communication, whether the objective is to reengage former customers or to retain new customers acquired in the age of COVID-19 — major challenges at a time when marketing budgets are being curtailed.


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