Local Retail and Auto Sales Could Get Pandemic Boost
An IBM survey of 18,000 consumers offers potentially troubling news for retailers when it comes to spending levels and shopping patterns.
The new report from the IBM Institute for Business Value found that more than half of U.S. consumers expected a "sustained-to-major economic downturn over the next year or more,” according to Jesus Mantas, senior managing partner, IBM Services. As well, about 66% of respondents expect a second wave of the pandemic to hit. "The results signal that consumers are preparing themselves for more permanent changes in behavior because of the pandemic and their fears about future outbreaks," he said.
Amid all the gloomy news for commerce — and much of it remains very gloomy — one of four U.S. consumers say they are shopping more often with local merchants, or buying more locally sourced products, during the pandemic and its stay-at-home mandates.
“In response, consumer brands are now moving into a more thoughtful, proactive stage looking for hyperlocal demand insights to better serve their customers,” according to Mantas. “Many are using (artificial intelligence) to look for patterns in the demand signals and starting to realign production, potentially with local sourcing, and adjust supply chains accordingly.”
The findings were based on surveys of consumers in May and early June, as retailers tried to regain their footing for the second half of 2020 and wondered what the holiday shopping season might or might not bring.
All areas of retail need to prepare for such possibilities, the report indicates. That includes auto sales. The pandemic has changed attitudes about transportation and, for now at least, consumers seem more confident in using their own vehicles than ride-sharing services, traditional taxis or mass transit.
“One in four respondents said they would use their personal vehicles exclusively as their mode of transport, and an additional 17% said they’d use them more than before,” Mantas said. “A full 60% of those who want to use a personal vehicle but don’t already own one said they would buy one. The remainder in this group said they would rent a vehicle until they felt safe using shared mobility.”
That’s a signal for car and truck sellers to improve their offerings.
“To adapt to these new mobility patterns and preferences, the auto industry must provide an increasingly customer-centric experience — one focused on deeper customer relationships instead of transactions alone,” Mantas said. “Sales associates and dealerships will need to adopt digital services like virtual assistants, contactless delivery, and augmented reality (AR) apps for remote diagnostics, and how-to manuals to make the experience of pre-sale, sale and service more personalized and digitized.”