IBM Consumer Study Points to Potential Recovery of Retail and Travel Industries
According to the findings of a new global consumer study released by IBM's Institute for Business Value (IBV), respondents are mostly confident in the safety, effectiveness, and distribution of the COVID-19 vaccines and indicate a desire to return to 'normalcy' after being vaccinated. But different rules, personal preferences, and social norms formed during the last year means that key industries like retail, travel and transportation may need to provide more seamless, personalized marketing and client experiences, to help remain competitive and successfully engage customers.
The study of more than 15,000 adults surveyed globally, found most people are confident in the safety, effectiveness, and distribution of COVID-19 vaccines, and more than half expect the COVID-19 vaccine to keep them protected. Economic progress can happen gradually, however, as most respondents surveyed indicated that vaccination levels will need to exceed 70 percent in order for them to feel comfortable returning to life as it was before the COVID-19 pandemic. If current COVID-19 vaccine rollout rates continue, it purports that most people may not regain pre-COVID-19 pandemic comfort levels until well into 2022. Amidst this uncertainty, consumers are rethinking the way they want to work, socialize, travel, and shop, according to the study.
"Habits formed during the COVID-19 pandemic have raised consumers' expectations of digital engagement, especially in service industries like retail, travel & transportation," said Jesus Mantas, senior managing partner, IBM Global Business Services. "As we anticipate the 'post-COVID-19 pandemic normal,' businesses should accelerate their digital evolution with AI and Cloud based solutions to help remain competitive. Investing in hybrid physical and digital experiences can help provide a more personalized experience."
According to the study, the tides may be turning for the ailing retail industry, with global consumers surveyed indicating a strong desire, once they are vaccinated, to return to malls and shopping centers. While many surveyed consumers may not abandon the online shopping options they've become accustomed to using during the COVID-19 pandemic, with at least one in five respondents surveyed stating that they plan to continue shopping primarily online, once vaccinated, they expect to buy items in-store much more often. The biggest categories that may see shifts toward in-person shopping are toys, games, and hobbies, (+121 percent) and apparel, footwear, and accessories (+76 percent), according to the study.
With convenience indicated as the main reason global consumers surveyed continue to shop online, followed by value and the wide variety of products available online, to lure consumers back to physical stores, retailers can look to in-store promotions and local products. In-store promotions were the top factor that could drive consumers to shop in a physical store, especially for Gen X (54 percent surveyed) and Boomers (52 percent surveyed). Additionally, local products that are not available online, such as small batch food products and hand-made apparel, may attract nearly 50 percent of surveyed Millennials, Gen X and Boomers, to shop in person.
While consumer travel has yet to rebound, there are promising signs on the horizon. The study showed plane travel may see an uptick in demand, with 30 percent of people planning to fly more often, though this is offset by the 23 percent of respondents surveyed that plan to fly less. The study found that roughly 1.5 times more vaccinated consumers surveyed expect to take an overnight trip in the next six months. Still, a sizeable subset of the population plans to stay home indefinitely, with roughly one in four surveyed consumers saying that they do not plan to travel in 2021, even after they receive the COVID-19 vaccine.
The vaccine may also reinvigorate professional travel, increasing the number of respondents comfortable travelling for business two to four times in most countries. However, older business travelers surveyed are less confident. Only eight percent of respondents surveyed over 55 are comfortable traveling for business without a COVID-19 vaccine, and just 25 percent are comfortable after they're vaccinated. The study showed personal automobile continues its prominence, both during the COVID-19 pandemic period and after people receive the COVID-19 vaccine. While 10 percent of respondents surveyed plan to use a personal vehicle less often after getting the shot, 47 percent surveyed say they will use it more.
The survey showed that other forms of transportation may either see a very slight increase or a net reduction in demand as more people become vaccinated. The cruise industry may experience the most significant net decline, with 26 percent of people surveyed saying they will use cruise ships less and only 17 percent surveyed saying they will use them more.