Transcript: Episode 51

How have our shopping habits changed?

Vivienne Parry  0:04  
Hello and welcome to Coronavirus: The Whole Story - UCL's award winning podcast about the groundbreaking research and monumental community efforts that UCL has contributed to fight Coronavirus. I'm Vivienne Parry, I'm a writer, broadcaster UCL alumna and your host of this very special podcast. Now lockdown is easing. The vaccination programme here in the UK is making steady progress, and the sun is even shining. It almost feels as if the end is in sight. But what is the normal that we're returning to going to look like? The pandemic has changed a lot of things about the way the world works, and one area in particular is shopping. So today I'm going to be talking to UCL experts in consumer behaviour to understand how the pandemic has affected our shopping habits, from delivery apps to online purchasing to the death of the high street. My guest this week is Professor Tomas Chamorro Premuzic and the psychologist author and entrepreneur and Chair of Business Psychology in UCL Department of Clinical Education and Health Psychology. Tomas's research explores everything from consumer behaviour to entrepreneurship to creativity, which he uses to help organisations and individuals understand, predict and maximise their performance. So Tomas, firstly, I want to establish what kind of impact Coronavirus has had on consumer behaviour because obviously, the lockdowns have prevented us getting absent the shops, and I suspect it hasn't stopped us from shopping.

Tomas Chamorro-Premuzic  1:36  
That's right, you know, well, obviously, leaving aside the issue that physical or brick and mortar shops close, I think there's also extra time that people have found particularly once they sorted out the new Dynamics or schedule of their lockdown, or COVID-19 life habits, right, then I think if all you can do is either stream, Netflix or Spotify, which by the way, should be included as very important categories of consumer behaviour. And we consume media music, people don't read that much. They listen to books now more than they they would read. But then of course, there's the time you have with Amazon or on whatever kind of retail upsy spent. And we've known for a long time that people try to relive their anxieties, with consumer behaviours and you shop to feel better. I mean, there's a reason why everyone understands the meaning of retail therapy. And that only gets exacerbated or turbocharged by digital retail or online shopping. And I think the most interesting sort of finding or insight to me is the fact that even though we were able to do everything shopping related or retail related online, before the pandemic, once you remove when you completely touch people from the physical or analogue versions of experiences, we miss it. And we value you know, the kind of experiential aspects of going to a shop more than we did before. Much like, for example, people now, when they're returning to offices, will think and experience their in person encounters with others in a different way than before, when they said, Oh, you know, I can just message you or email you. And that's fine, you know, so I think we're humans, and therefore we need to see feel, touch and experience things in the physical world. And that's what people are looking forward to returning to now to the degree that it's safe, and that they have that option.

Vivienne Parry  3:40  
And there are some things that are actually quite difficult to buy online, because of the experience. I mean, I don't care if I'm buying knickers online, because I don't need to do anything, just pick up a packet. But actually, if I want to buy a dress, I want the full experience of looking at several things. And that's important. And is that widely experienced by people?

Tomas Chamorro-Premuzic  4:07  
It is. And it's important to understand maybe and that the practical aspect of being able to try something and looking at yourself in the mirror. And by the way, also the immediacy that comes from you find something you like it and then you take it right you don't have to you don't have to wait for days and maybe then thing that you have to return it all those practical issues are being addressed or have been addressed pretty well in the last few years. Right. So delivery times are shorter, you have lots of different apps or functionalities that enable you to size or get a sense of whether the item will be the right one or not. So in a way, you know, one of the goals of anything digital is to reduce errors to improve efficiencies and to reduce serendipity. But actually I think that's what we miss.

Vivienne Parry  4:56  
Yeah, the serendipity is the thing we love

Tomas Chamorro-Premuzic  4:58  
exactly, you know I you know, of course, if I need to buy a book, I will just go on Amazon and follow somebody recommendations search in an instant, I can have it in no digital format only, but also will arrive in a couple of days time. But what about randomly stumbling upon a book in a bookstore, or seeing what's on the shelf and is the same with dresses or with anything you buy? So I think this is very interesting, sort of dynamic, whereby technology adds in efficiency and accuracy and all of that. But then because of that, we just miss the randomness or the serendipity of the physical world and these encounters and the experience itself, right. So because all the time you saved thanks to online products or online tools for injecting more efficiency into your life, what are you going to do with the time you're you're saving? Well, it turns out, we're spending it on other apps and more screen time. So then it's not very useful.

Vivienne Parry  5:57  
So customers are only one side of the equation. And you've already mentioned the kind of things that retailers are doing to make the shopping experience more pleasurable, but also to shorten the waiting times. What other innovations have we seen,

Tomas Chamorro-Premuzic  6:14  
the main innovation, I would say, is trying to make the experience more hybrid, it started with trying to make the online experience more like the real thing. And you know, we still have relatively small adoption of things like VR for consumer shopping experiences, virtual reality. But if you think about the way websites or apps are designed that trying to immerse people in the real or physical environments, and at the same time, more recently, we've had shops or whatever is left of the shops, trying to kind of bridge consumers into the digital ecosystem, which by the way, is a very smart way to connect their data, their online data with their offline data or behaviours. This started with supermarkets. I mean, if you think about analytics companies like dunnhumby is in the UK, they started merging with supermarket loyalty cards. You know, if you actually look at what people buy in a store, and then you can connect or stitch together that data with what they buy online is start having a much more in depth and accurate information of who consumers are, which then in turn enables people to customise the way items are presented or shown or displayed in the shops, you know, so in a way, personalising things online is easy, but imagine trying to personalise or at least optimise for the majority of the people when you are in store. So in a way stores physical stores have become a lot smarter because of technology. And because they in a way, have become more of a hybrid environment or ecosystem where digital influences coexist with offline or analogue behaviours.

Vivienne Parry  7:54  
And there is something inherently stupid about some of those algorithms that the minute you've bought, say, a tent bombard you with offers of tents, I just bought a tent, I don't want to tents. There is some of it doesn't really appear to be very smart.

Tomas Chamorro-Premuzic  8:14  
Yep, I would agree. And I think, you know, algorithms need more data and better data to get smarter and to learn for sure. They're only as smart as the decision people make as well. What's more worrying than the example you described is the fact that you actually are more likely to pay attention to these stupid or trivial recommendations, where algorithms in essence, at best will tell you what you already knew. and at worst, will actually keep on showing you something you bought, or something you clicked on by mistake. But that's not to say that they have reached the pinnacle of their artificial intelligence. And we are going to move into a world where our different kind of digital footprints are going to be more connected. And if you think about it, this is, of course, why there is so much concern around the ethics of AI and consumer privacy and why in Europe, there is such crackdown on what big tech firms are doing. In a way. This is the big bet of big technology firms that if you own so much of people's times and eyeballs that you can actually connect their communications, let's say in WhatsApp with what they like on Facebook with what they post on Instagram. And it's all designed to create basically to replicate the experience of going into a physical mall, you're just going into different windows of a virtual version of that, then you can expect the AI and the algorithms to become smarter. Now, granted, that's not just going to be useful for organisations in theory and for the owners of this data, but it should also be useful for consumers. The issue then is how much information should Companies have What else could be done with that information? And are their potential disadvantages of knowing too much? Imagine the opposite scenario of what you described, which is company makes a really, really stupid recommendation. You just bought a pair of shoes, and it shows you the same shoes for two weeks. You know, that's stupid. But what if it actually created the perception or the sensation and knew that it knows you better than you know yourself? To the point that is kind of creepy or spooky?

Vivienne Parry  10:28  
Gosh, it seems to me that all this time we say this is the death of the high street. But the high street has had the sword of Damocles the death sword hanging above it for quite some time. And yet, I mean, look at the vast queues for Primark.

Tomas Chamorro-Premuzic  10:46  
Yep, exactly. And I think, you know, you always have examples of companies or brands that are thriving, you know, while others are not even if the majority or traditional brands and approaches or businesses are collapsing. So I think there's more of a replacement sort of reimagining or kind of transition from companies that understood what consumers want today, if they go into a store, and companies that assume that the old ways of operating or businesses user usual is just enough. And I think what you're seeing is that the impact or the sector that is most impacted and most negatively impacted is sort of the middle of the normal distribution of the background. So you have very, very cheap and aggressively kind of discounted stores such as Prime are doing really well, because they managed to kind of attract such volumes of shoppers, that actually, the experience in itself is worthwhile. And then of course, will cascade or trickle onto lots of online purchases as well. And then the very high end of the spectrum, right at the very high end, if you're going to Louie Vuitton, or Chanel or airmass, etc. You can buy a lot of these things online. But actually going into the store and having this luxury is experienced is part of the reason why you spend this enormous amount of money on these brands. And ultimately, anything we buy, you know, we have so many choices, that actually people will always gravitate towards products and shopping decisions that actually enable them to display certain elements of their identity and their personality and their values. And that's not just in having in wearing something that is of a certain brand, or driving a car that you know is I don't know, if you drive a Tesla, it's an expensive car, but you're choosing to display the fact that you care about the environment, for example, right. And that's how you buy a Tesla and not another expensive car. So the choices say a lot about who we think we are and who we want to be. But the experiences that actually are needed to get to these products also need to fulfil or enable us to kind of project or display certain elements of our identity. So I think you know, for some people, even the whole experience of going to a store enables them to cement or kind of display certain elements of who they are.

Vivienne Parry  13:13  
And it also cements friendship, bonds, shopping is very often an experience that you do with a friend or friends and who is not, especially during their teenage years being crammed into a changing room, your friend Sharon saying, You look awful in that absolutely not. Which allows you of course, to say exactly the same about Sharon, but in her frock. But that that experience of shared understanding seems to be a very, very important one, which actually internet shopping does not replicate.

Tomas Chamorro-Premuzic  13:45  
Exactly. So there's a friendship component. If you're a parent, and you have kids going to the store, even if it is to buy groceries, at the end of the day, it's part of transmitting a certain understanding of the world and how you live. And you know, you go and buy stuff, what you need, etc. You know, that's part of socialisation. And even if you're alone, by the way, and you enjoy interacting with the products, or the things you buy in a store, it's still very important because today that experience might represent people's downtime, you know, if it gets you off your phone and of your screen, and you can at least disconnect from the online world to actually be present in the physical world. It's interesting, because that's actually a very mindful activity. Even if you're saying, Oh, you know, you're buying stuff that you don't need, etc. But at least you're living in the physical world. And that's really interesting, because before the situation was sort of reverse there was an asymmetry where we're mostly in the physical store. And then in the beginning, we would maybe check if the item was cheaper online, and maybe they're not bite on the store. But now anything that gets us to disconnect from our screens and not be looking at our smartphone all the time, it's actually a very meaningful physical activity.

Vivienne Parry  15:00  
To finish up, I'd like to ask what are the retail companies doing to make themselves future pandemic proof are the things that there could be doing? And what do you think the shopping experience is going to look like? Say in a year's time, when hopefully, we are finally out of this?

Tomas Chamorro-Premuzic  15:18  
The You know, this is a really good question, because I think I would break it down into two parts. First, from a kind of logistics, health and safety and safe proofing physical environments in their shop situation, I think it's clear that there are measures that have been taken, and that will continue to be taken to ensure that people have a safe return to the shops. And it's quite interesting, because at the beginning, actually, those measures were not that coherent, right, we made fun of people for going and buying too much toilet paper, but actually getting people to wash their hands 100 times a day was not the issue when a virus is transmitted mostly through breeding. So I think companies have shown that they need to be quick and agile and science driven in their efforts to kind of save proof shops and environments. But what's even more important, and we often forget is that people will remember how the different brands remain connected and behave during this period of heightened stress and anxiety. You know, because the shop is just a very, very small area of this connection and relationship that brands have with consumers. So most of us will have followed our brands approach to or a favourite brands approach to treating their employees to sending us messages, and to helping us understand, you know, this very ambivalent, ambiguous and uncertain situation. Ultimately, brands are a promise to deliver something, but they're also an attempt to establish an emotional bond or connection between consumers and the products. And that transcends the physical store and is now much more dispersed, or, you know, sort of diluted in different environments. I mean, it's no different than saying, you know, if you think about traditional advertising and the 80s, in the 90s, started to kind of be less function and less about the product and more about the emotional connection. Now we're seeing it not just in store, but in all the campaigns, the thought leadership and the personalised relationship that brands have with consumers through all these digital environments, and digital ecosystems and channels.

Vivienne Parry  17:30  
So there's, again, there's that sense of almost family, isn't there? Are you part of the white stuff family? Are you part of the Bowden family? Because if you are, you are with other customers who are like you who share your beliefs and values.

Tomas Chamorro-Premuzic  17:48  
Exactly. And I give you maybe one little example that most listeners will be able to relate to, which is when organisations and businesses are free to open or reopen, for example, you know, there is a tension there is a conflict between do I open very quickly, and then make up some of the financial losses that I had to endure? Or do I stay close, because I'm not sure if it's safe to return. And I care about my employees and my staff and continue to lose money, you know, and of course, that depends on financial means. But it also depends on values, and on what your take and position is visa v this pandemic. And that I think sends an important message, it sends an important message where consumers say, Well, I miss going to the shop. But actually, I care more about this brand now than before. Because their approach to dealing with this actually, much as mine and represents my values.

Vivienne Parry  18:43  
It's fascinating, so quick, and look into your crystal ball telling us which are the companies that are going to survive long term and which sectors will do well,

Tomas Chamorro-Premuzic  18:52  
if anything has been shown in the last year and a half is that predictions are easy to make and very hard to get right. So I'm not going to pretend to be the Oracle here of the future. But I do think we're going to see i furcation. Basically, in terms of size, the big big retail companies have been forced to innovate and this year and a half and are going to be better off in the future because they managed to become more digital than before, and also incorporate the lessons of the learnings into the physical environments. And I do think we're going to see at the other end of the spectrum, a lot of entrepreneurial activity and innovation in smaller firms that basically are benefiting from the renewal of old and now defunct brick and mortar stores and more time that people are going to still be standing online because if you think about it, whether it's the UK or the US or Europe, even in industrialised nations actually online and digital shopping will continue to grow at a much faster rate. You know, so I think the question is, how will we experience or Why? What are the main reasons we will actually seek To spend more time in physical stores and environment and I think that's to do with some of the factors you mentioned maybe into the weather, kind of bonding, affiliation seeing others and because we need to actually find ways to enjoy our analogue or physical time, and for that, I think will seek experiences and anything that gets gets us off our screens and of our smartphones.

Vivienne Parry  20:22  
absolutely fascinating. Thomas, it's been so interesting talking to you. You've been listening to Coronavirus the whole story This episode was presented by myself Vivienne Parry produced by UCL with support from the UCL Health of the Public and UCL Grand Challenges and edited by the splendid Cerys Bradley I was joined today by Professor Tomas Chamorro-Premuzic and if you'd like to hear more of these podcasts from UCL Minds, subscribe wherever you download your podcasts or visit ucl.ac.uk forward slash Coronavirus. This podcast is brought to you by UCL Minds bringing together UCL knowledge, insights and expertise through events, digital content and activities open to everyone. Hope to be with you again soon. And I'm just off shopping.