Unsurprisingly, this trend is also carrying over to stores in general as nearly 33% of respondents said they are avoiding physical stores with more than 50% saying they will avoid if coronavirus spreads further. Among different age demographics, older consumers are saying they are more likely to take these precautions (almost 9 in 10 of those over 45 years of age) but there is still a significant number of younger consumers that are also avoiding physical stores as well.
Of course, with this shift to online, it is also understandable that there will be delays to shipment timing and that consumers shouldn't expect the same express delivery that they would get under normal circumstances. Amazon, for instance, has been notifying consumers that have placed orders that there may be delays and additionally, have used site messaging to indicate that availability may also be limited (see 2nd image below for Whole Foods).
Speaking of Whole Foods, it shouldn't come as a surprise that it is consumer packaged goods staples that are surging with this shift from brick-and-mortar to online. Consumers are stocking up on products such as oat milk and in terms of health-related CPG items, Nielsen found that sales for items such as medical masks, grew +78% during the first week of a four-week period ending on February 22, compared with the same period last year.
Personally, this shift in overall spending from physical stores to online doesn't come as a surprise to me nor do I think it should be a surprise to anyone else. What I do think retailers will need to be careful is extrapolating findings based on these preliminary results. For example, while demand for consumer packaged goods is up online vs. recent trends and perhaps vs. last year as well, the same won't hold true necessarily for luxury goods, where macroeconomic shocks will have a much more significant impact on willingness to pay and price elasticity. Accordingly, while I expect there to be a continued shift in penetration from off-line to online as consumers are reluctant to shop publicly, I don't believe it would be prudent to expect an actual rise in online and/or omni-channel sales vs. last year in all product categories and sectors. Retailers will need to be careful in determining what is the appropriate online opportunity for them right now and how much macroeconomic factors will influence willingness to pay for their products.
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