To gain a fresh perspective on the global economy, Digital Journal caught up with David Bernard, Experian’s SVP Strategy, Marketing & Digital of Global Decision Analytics. The focus was on how consumer demands for digital banking, payment and retail transactions has shifted since COVID-19 and how business aren’t quite prepared.
Digital Journal: How have consumer and business outlooks shifted since COVID-19?
David Bernard: There have been several shifts in both business and consumer behavior since the start of the COVID-19 pandemic but one of the most notable changes has been the increase in volume of online activity. According to our Global Insights Report, consumers are engaging with businesses online more than ever before. The study found there has been a 20 percent increase overall in consumer online transaction activities, including a 41 percent increase in online grocery shopping, a 40 percent increase in applying for loans online and a 22 percent increase for both ordering food online for delivery or for takeout.
DJ: Do you believe the increase in online activity will continue after the pandemic?
Bernard: I believe that we will continue to see consumers and businesses engage together online, even as economies start to recover. Consumers who were resistant to shopping or banking online prior to the pandemic had no choice once they were sequestered at home. The majority will continue the trend since they have now seen the convenience first-hand. And, there’s another interesting trend we’ve started to observe. Despite the known risks of online activity, people feel safer banking and shopping online than in-person. In fact, we found that as many as half of consumers globally expect their spending online to increase in the next 12 months even though many businesses have started to re-open.
DJ: Was it surprising that business weren’t quite prepared for the online surge?
Bernard:The trend for digital was always there but the rate of it was moving rapidly increased in a compressed amount of time that could not have been predicted. Businesses acted as quickly and efficiently as possible, but still were not prepared for the surge of activity. In fact, according to our report only 32 percent of businesses have made operational adjustments to meet new consumer demands for digital banking, payment and retail transactions. I think there’s been a bit of leeway on the part of the consumer. People have stayed loyal to businesses as the digital customer relationship took hold echoing the sentiment “we’re all in this together”.
But as the “new normal” is defined by digital relationship, people will start to expect more from the businesses with which they interact. The good news is that businesses understand the necessity of adapting to these changes and are planning to make strategic adjustments to give consumers greater access to goods and services and manage customer relationships. In fact, we found that 60 percent of businesses plan to increase their budget for analytics and credit risk management.
DJ: What can businesses do in order to thrive while adapting in the new economy?
Bernard:Now more than ever, consumers expect to have meaningful connections with the businesses they interact and engage with. Yes, they want a secure experience, but they also want transactions to be accessible and convenient. In order to continue thriving, businesses must invest in digital transformation to accommodate increasing consumer demand for features that enhance the experience, such as giving quick access to products and services that don’t lead to frustration or abandonment. One of the key tools to achieve a successful transformation is data.
Businesses can quickly recognize their customers (versus fraud attempts, even with correct credentials) and deliver the right products (pricing, optimization or affordability strategies) if they can integrate data, analytics and technology. Accessibility to these tools is a key factor to consider.
DJ: Were there any other surprising findings?
Bernard:The study also found that 38 percent of customers would give an organization more business if they felt they were treated fairly during the pandemic. Consumers in the U.S. (52 percent) and Brazil (44 percent) were a bit higher than the global average reflecting possible differences in competitive options to move their banking or shopping dollars. One of the top challenges all businesses believe they will face is managing increased demand across channels and functions, supporting the need for an increase investment.
