Say ‘ho ho ho’ to the hybrid shopping future

Irish shoppers are blending in-store with the online shopping experience, new research from PwC reveals.

While Irish consumers have become more digital and are spending more online, in-store shopping remains important and will do so for a long time to come.

Irish shoppers are becoming more digital across most age groups and the challenge for retailers is to ensure that the in-store shopping experience and the smartphone shopping experience go together.

“The events of the last two years have changed how we live, work and shop”

New data from PwC’s Global and Irish Consumer Insights Pulse Survey indicates that consumer sentiment is still fragile because of the pandemic.

Around half or more Irish consumers expect no change in their spend over the coming six months compared to the previous six months. For example, 48pc expect no change in their spend on fashion, 55pc will hold their spend on groceries and 58pc will hold their spend on health and beauty. 60pc said they expect to spend the same as last year on Christmas presents.

When it comes to in-store shopping and online shopping, in-store shopping has recovered with almost half (45pc) of Irish consumers visiting a physical store at least once a week, back to 2018 and 2017 pre-pandemic levels (45pc).

However, at the same time 47pc of Irish consumers say they have become more digital in the last six months and online shopping maintains its upward trajectory.

A third (32pc) shop by mobile or smartphone at least once a week, up from 19pc in 2019 and 9pc in 2017.  However, there is still some way to go to catch up with global levels (41pc).

Fashion is top for online shopping (58pc) while grocery continues to lead for in-store (40pc).  Consumers plan on spending more on out-of-home activities: from in-store shopping to entertainment and travelling.

A generational gap is closing when it comes to shopping via mobile. Whilst it has long been recognised that the older generation prefers to shop in-store, this is changing.  Over one fifth (21pc) of those aged between 55 and 64 now shop at least weekly via mobile/smartphone, a six-fold increase from 2017 levels (3.5pc). At the same time 44pc of 18-24-year-olds shop at least weekly via mobile/smartphone. 

“The events of the last two years have changed how we live, work and shop,” said John Dillon, leader at PwC Ireland’s Retail & Consumer Practice.

“The evolving Irish consumer is responding to the current macroeconomic challenges with an increasing focus on savings, price sensitivity, purchasing online via multiple channels, customer service expectations and sustainability expectations. 

“However, faced with cost of living increases and threatened by rising Covid-19 levels, it is not surprising that half or more than half of Irish consumers plan no change in spending levels in the next six months. Understanding the new and emerging consumer needs will be key to winning in these ever-changing times.”

Hybrid working, saving money and sustainability

The study reveals that 34pc of Irish survey respondents are hybrid working, with 16pc working from home all of the time.  Half (49pc) are required to be in their physical workplace all of the time. The most optimistic consumers are those who are hybrid working with 76pc of these workers feeling optimistic versus 57pc for non-hybrid.

60pc of Irish consumers increased their focus on savings and prices in the last 6 months.   Getting the best deal is the top priority whether shopping online (77pc) or in-store (75pc). Other important shopping priorities are buying from a variety of retailers to suit customer needs, an efficient delivery or collection service and buying locally.  

Irish consumers care more about sustainability than ever before. 50pc of Irish respondents stated that they were more eco-friendly focused compared to six months ago. Helping to make healthier/better lifestyle choices (45pc) is one of the most important factors when shopping.  Other key considerations are retailers taking responsibility for staff wellbeing (44pc) and providing products with a traceable and transparent origin (42pc). Those aged between 54 – 73 (baby boomers) are most concerned about product origin.

Data risk and trust

Protecting personal data (47pc) is the single most important driver of trust in a brand, according to the survey. A quarter (25pc) are unwilling to trade their data for financial compensation or discounts.  Other important drivers of brand trust are exceptional customer service (38pc), always meeting expectations (37pc) and sharing relevant discounts (34pc).

However, sustainable practices are also a key attribute for driving trust amongst Irish consumers. This is particularly so for millennials (age 25-30-year-olds) – 76pc of this group reported that taking positive steps to limit environmental impact plays a role in building brand trust.  

“Environmental, Social and Governance factors are of growing importance for Irish consumers,” said Owen McFeely, director of PwC Ireland’s Retail & Consumer practice. “They want to do the right thing for society and for the environment. Products can’t be one dimensional when it comes to consumer expectations and need to satisfy the multiple needs of the increasingly complex consumer.

“While consumer sentiment is fragile due to Covid-19 uncertainties, we see a retail sector having to adapt their models to account for current market complexities with consumers continuing to evolve with these changing market dynamics.

“Consumer-focused organisations need to take 3 key actions to ensure they remain relevant to this evolving consumer: understand and segment your customers in order to deliver on their specific needs, take steps to robustly protect data and avoid over-targeting their customers with bespoke offers and build a sustainability strategy that supports the climate challenges whilst also exceeding customer expectations,” Dillon said.

John Kennedy
Award-winning editor John Kennedy is one of Ireland's most experienced business and technology journalists.