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How the pandemic is changing the way we shop and what we’re buying

But the dash from cash is just one of the big consumer trends at work right now. The pandemic is profoundly re-shaping the way we spend.

The disruptions to daily life have forced us all to do things differently and that has affected our consumption patterns.

Millions have used alternative stores, products and brands for the first time. Retail industry insiders call it a massive “loyalty shock”.

A recent survey by the McKinsey consultancy found a majority of Australians have tried “new shopping behaviours” since the onset of the pandemic and most intend to continue with them.

Fresh habits tend to stick once they’ve been consistent for a few months. So, as the crisis drags on, our new spending behaviours will become entrenched.

We’ll keep going to different stores, buying different products and using different purchasing channels long after the crisis abates.

Australians were relatively slow to adopt online shopping.

Australians were relatively slow to adopt online shopping.Credit:James Alcock

Perhaps the most striking shift is our embrace of e-commerce.

Australia had been something of a laggard on this front – the prevalence of online shopping here has been lower than in many comparable places including the US and Europe.

But the restrictions that came with COVID-19 compelled a whole new group of Australians to get a login and make purchases online for the first time. Many who shopped online occasionally have become more frequent users.

“The increased use of online shopping, either through necessity or preference during the ‘stay at home’ period, seems likely to be a permanent shift,” said the RBA’s Michele Bullock.

Surveys show a clear increase in the use of online shopping and online services by older age groups which have been hardest to convert. Alternative payment methods, such as buy now pay later, also appear to have thrived during the pandemic.

“By some estimates we have vaulted ten years ahead in consumer and digital business penetration in less than three months,” said one McKinsey report.

The sharp increase in online shopping has triggered a boom in delivery services.

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The standout example is food delivery via mobile phone apps.

A spending tracker developed by analytics firm AlphaBeta, a part of Accenture, and credit bureau illion, showed national spending on food delivery in the week of August 2-9 was 342 per cent higher than the weekly norm before the pandemic.

It’s likely some of the curbside pickup and drive-through services which have flourished during the pandemic will also be more prevalent in future.

But the shift to e-commerce runs much deeper than simply purchasing things online.

The pandemic has nudged us towards more digitally driven lifestyles.

This includes everything from “tap and go” payments at the local cafe to attending medical appointments via a laptop.

Our digital consumption is higher than ever and a lot of it is done sitting on the couch. The AlphaBeta-illion spending tracker shows demand for subscription television, apps, games and music has been especially strong during the pandemic.

There’s also been a well-publicised spike in online gambling – it was 95 per cent higher than the pre-pandemic-norm during the week of August 3-9, the spending tracker shows.

COVID-19 restrictions have forced us to try out new forms of digital interaction like online gatherings with family and friends, telemedicine and streamed gym classes. A recent poll found a majority of consumers who have done fitness activity online during the pandemic intended to use the service longer-term.

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“There’s been a shift towards a more digital life in all its aspects,” says AlphaBeta director Andrew Charlton.

Much consumer behaviour disrupted by COVID-19 will drift back towards the pre-pandemic norm once health risks decline.

But the many changes that do persist will accelerate structural changes already at work in the broader economy, and potentially create new ones.

A substantial, lasting increase in the share of shopping conducted online, for instance, will affect the retail sector, one of Australia’s biggest employers. The need for in-store workers may decline while demand for logistics and delivery staff increases.

New online purchasing habits might reduce the overall number of visits to shopping centres meaning smaller, and possibly fewer, bricks and mortar retail spaces are required.

The pandemic-induced changes to our spending habits will cause lasting disruption.

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