-19 while also becoming intensely individualistic.  In facing the immediate threat of the pandemic, we are now more than ever concerned for our health, our families’ health and our futures. We have become deeply anxious, and whether we like it or not, the anxiety has set in and looks here to stay.  How we feel about shopping is no different.  The pandemic has fundamentally changed how we go about our daily shopping activities, including how, where, what and when we buy. Emotions, rather than rationality, have become the hallmark of consumers’ new behaviours and routines. The furtive, nervous looks in the eyes of passing shoppers as they dart in and out of stores; the shuffle further away from customers in the check-out line and the feverish wiping down of all contact surfaces in-store tells us all that we need to know about what is going through their minds.  We are now dealing with a new phenomenon. The anxious consumer.  This emergent consumer is fuelled by pandemic stress, worry, fear and apprehension. We are emotionally charged and sitting on a psychological precipice. We are desperate to return to a state of normalcy (91 per cent of shoppers say they miss shopping in-store), but we find ourselves in a constant state of fear of the next wave of infections and restrictions. The vaccine can’t come fast enough. Covid-19, with all of its uncertainty, will continue to have a deep and entrenched impact on our shopping behaviours. It represents an ever-present threat to our freedom and choices as consumers every time we head to the shops. What is shopper anxiety? Just about everybody is feeling anxiety. At the extreme, anxiety about a threat such as Covid-19 can be more than consumers can bear. For some shoppers, this anxiety is immobilising. Mckinsey & Company reported that 73 per cent of consumers are reluctant to go out. They are deeply worried about shared environments and being in crowded spaces.  Consumer anxiety could also present itself as a low-grade residual and gnawing worry. Some of us will admit to feeling anxious; many will not. The big question is, what will trigger the anxious consumer in 2021, and how can retailers allay their fears? The answers lie in understanding future shock (economic), in-store blues (we’ve got the jitters), fear of the unseen (dirty money) and the great escape via the flight to online. Future shock: economic woes They say the deeper the economic impact, the greater the shock, therefore, the longer it will take for consumer behaviour to return to some semblance of normality. Only 51 per cent of executives expect the global economic conditions to improve as risks and uncertainty about vaccinations and waves of outbreaks remain high. The story isn’t much brighter on the consumer side: almost 75 per cent of the population is worried about the domestic and global economic outlook.  These economic jitters will have a filter-down effect on purchase behaviour in 2021. Consumers are expected to pull the purse strings tight on big purchases in 2021, spending less on cars, investment properties, school fees and holidays. In fact, 46 per cent of consumers are already spending less on holidays, entertainment (48 per cent) and eating out (41 per cent). They’re worried about the big questions “How will I pay my mortgage?” “Will I lose my job?” “Can I maintain my lifestyle?” and their decision making is now planned, price-sensitive and value-driven. Yet amid the economic woes plaguing consumers’ minds is another lingering threat: looming debt fuelled by the boom in buy now, pay later (BNPL) schemes, and it’s a growing source of anxiety. Shopify reported that its merchants recorded a 60 per cent increase in deferred payments since the start of the pandemic. BNPL solutions are expected to triple over the next two years, and consumers are planning to use not just one service but multiple BNPL providers. As 2020 came to a close, one in three millennials were using Afterpay every month.  But BNPL has a dark side. It’s a debt trap, and it’s contributing to consumer anxiety. One in five consumers using BNPL have reported missing payments. BNPL debt has almost doubled in the past 12 months, leading some consumers to go without essentials, skip meals and also take out new loans to fund their BNPL debt. In-store blues: situational jitters Pre-pandemic, the main thing we contemplated when we went shopping was whether or not we would bag a bargain. Now, the majority of us also contemplate our safety.  Deloitte’s recent study of 18 countries found that less than half the world feels safe going about their daily activities, which has a fundamental effect on how consumers think about their shopping expeditions.  In Australia, two in five (40 per cent) consumers feel uncomfortable shopping at a large shopping complex or a large mall, indicating anxiety at the thought. The story is no different in the US where in-store anxiety is on the rise, with 57 per cent of consumers saying that they feel anxious. As of June 2020, 61 per cent of consumers were delaying their purchases in-store due to fear of transmission.  Covid has turned retail therapy into retail anxiety. Whereas in past years, in-store sales were something of a national sport, consumers are now more preoccupied with shopper density and close interactions with others, not bargains.  Shoppers are much more gun-shy in their shopping behaviours, and they are more deliberate, they plan in-store visits, target specific products, and shop in-store less frequently. Dirty money? That’s how consumers globally now feel about handling cash.   According to a recent survey, 54 per cent of consumers are anxious about touching coins and notes, and 45 per cent want a cashless society. One in five consumers tried contactless payment for the first time during the pandemic. Already, 87 per cent of US shoppers prefer to shop in stores with touchless check out options.  With consumers now hypersensitised to hygiene, the fear of handling cash is not about to disappear: 60 per cent of consumers plan to use touchless payment systems in 2021.  The flight to online A risk mindset will define the consumer of 2021. They have a greater sense of alertness about their in-store experiences, and as a result, they also have a greater propensity to stay online in what can be viewed as a flight to safety.   According to the Australian Bureau of Statistics, one-third of Australians, or 33 per cent, plan to increase their online shopping in the coming months, and 32 per cent indicate that they will continue to shop online for the next 12 months.  Statista reports that digital buyers are expected to grow from 1.92 billion in 2019 to 2.14 billion in 2021. Shoppers in 2021 will continue to seek safety and convenience, and shop on-the-go: 45 per cent of consumers globally will be shopping online from their smartphone.  This doesn’t signal the death of in-store, but it does signal the need for a hybrid rebirth in retail. The shopper of 2021 will be omnichannel. In 2021, it will be no longer relevant to talk about online versus in-store as two separate shopping methods.  Hybrid business models offering shoppers an experience journey will gain popularity as consumers become increasingly tech-savvy, research-informed and planned in their shopping behaviour.  All this begs the question: Where to from here? How to target the anxious consumer No doubt, all retailers have grappled with the challenges of Covid-19.    In light of the continued uncertainty, retailers have no choice but to become more agile and resilient when navigating the landscape of the anxious consumer. Consumers crave normality, but their risk mindset will remain a relatively permanent fixture until the pandemic is over. In the meantime, it will be necessary for retailers to draw upon their ingenuity and creativity to reassure nervous consumers and build trust, while also attempting to serve them profitably: a challenging balancing act.  Fundamental to the sector’s success will be retailers’ ability to understand the anxious consumers’ state of mind so that they can offer reassurance and rebuild confidence.  Here are some ways that retailers can engage with these consumers: A simple approach is to follow the COVID retail strategy acronym. Connect Consumers want a richly personalised, connected experience. They seek warm and empathetic interaction with staff online and offline, supported through customised and curated communications. Tailored communications build connection, trust and a relationship while dispelling risk. Observe Many of the changes that we see in consumer behaviour regarding how they think, feel and act are here to stay. They expect their brands to be omnipresent in their lives, connecting them across the retail ecosystem. Observing consumers and understanding what they like, dislike, and value provides deep insight into their rapidly evolving patterns of behaviour and enables brands to effectively meet consumer needs. Visualise This year has been dubbed the ‘phygital’ year — a blend of physical and digital realities. Augmented reality (AR) and artificial intelligence (AI) are here to stay. As consumers continue to move online, technology will help consumers more tangibly assess products and reduce risk while bridging the gap between the digital and the physical.  Innovate Amid the challenges related to mitigating consumers’ Covid-19 anxieties, there are longer-term opportunities focused on strategically investing in retail innovations. Hybrid business models that enable brands to stay agile and abreast of evolving consumer needs while maintaining a consumer-first mindset are central to retail innovation success post-2021. Data-driven decisions Be sure to track, monitor and measure consumer behaviour. Understanding the channels that consumers are using and when and how they are using them via data-driven insights enables brands to tap into the consumer journey funnel, stay top of mind and foster shopper interest. Jana Bowden is Associate Professor of marketing and consumer behaviour at the Macquarie University Business School. Her academic and industry work focuses on consumer psychology.