Turns out, we can learn a lot of things about people by studying rats.

When the scientific world wants to better understand human behavioral psychology, they often run extensive experiments using them. I’m reading an interesting book about urban development and population density called Rat City.  The book documents the many decades of scientific research conducted by Professor John B. Calhoun who used the Norway Rat to simulate the behavior of humans in crowded living conditions. His goal was to help urban planners improve city center design. It is a cleverly crafted history lesson on the evolution of cities, including my hometown, Baltimore, using rats as the main characters.

Punch line: Intensely overcrowded conditions caused most of the rats to turn violently on each other, become cannibalistic and dramatically shrink the population. You should still read the book to find out which rats survived and why. And why rats were the reason that Thomas Jefferson didn’t like cities very much.

A year ago, Scientific American published an article explaining research done at MIT about people and habits. Specifically, how people form habits, and why it’s hard to break old ones and form new ones. And yes, the research was done using a series of controlled experiments using rats.

The research outcomes confirm much of what we already know because we live it every day: most of the habits we form and behaviors they trigger are standardized and largely preprogrammed into our brains.

However, the research also finds that even as new habits are developed, old behaviors are never totally erased from our brain’s hard drive.

Old habits are merely suppressed. When presented “cues” associated with old behaviors, it can get easier (more tempting, perhaps?) for those old habits to replace the new ones. Although, the stronger the reward for the new behavior, the less likely it is people (or rats) will revert to their old patterns.

That brings me to one of the longest running, most insightful, real-time modern behavioral experiments ever run on humans: COVID-19.

Lockdowns and New Habits

It’s hard to believe, but five years ago this week, on January 23, 2020, the Chinese government imposed a mandatory 76-day lockdown in City of Wuhan located in China’s Hubei province.

No one ever dreamed that would become the starting line for a once in a hundred-year global pandemic that would kill more than seven million people and infect nearly 778 million others over a five-year period.  I remember, as I am sure you do too, when the mandatory lockdowns in the U.S. were expected to be about two months. Little did we know then….

With the COVID pandemic now in the rear view, many speak of the return to pre-pandemic behaviors. We are back to shopping in stores, back to going to movie theatres and live events, back to eating out at restaurants and back to seeing doctors in person, back to riding in Ubers without having all the windows rolled down during the trip.

And, of course, all of that is true.

But it’s also true that the rapid shift to digital, driven by the pandemic, has formed new digital-first habits.

And that the correct comparison point for measuring consumer digital engagement isn’t from the peak of the pandemic and the physical-world constraints on doing business in person, but from how consumers used digital channels in January of 2020 — before the pandemic began.

PYMNTS Intelligence began tracking the shift to digital by consumers in March of 2020 — on March 4^th, to be precise — to examine the durability of the shift to digital across key segments of the digital economy. We believe that we have the most robust data set to systematically track how consumers shifted digital over the last five years.

“Shifting digital” — as measured by the research — means using more digital than physical channels to perform many everyday tasks. This data set has been refreshed monthly, using national surveys of consumers, for the last five years.

The digital shift we observe over that time isn’t concentrated within a certain demographic cohort. Everyone has increased their use of digital channels, from the 16-year-old Gen Z to her 86-year-old great grandma who orders her groceries from Instacart, pays her bills online, orders stuff from Amazon, Facetimes with her granddaughter and even Venmos birthday money.

And those new habits haven’t totally reverted to the physical-first behaviors that were second nature in 2019.

Even as stores, restaurants and doctor’s offices are visible cues for consumers to once again fully engage in the physical world.

Tracking the Digital Shift

By the end of 2024, PYMNTS Intelligence data finds a consumer who has gone back to shopping in the physical store. But  an estimated 41% of retail shoppers do more of their shopping using digital means today than they did before the pandemic. Nearly three quarters of those consumers say they plan to stick with or accelerate those behaviors in the future.

Eating out at restaurants (and back inside of those establishments) is back too, as anyone who’s tried to get a reservation at the last minute can attest. But 19% of restaurant diners use digital means to order food from aggregators more than they did before the pandemic. Seventy-two percent of these consumers say they plan to maintain these behaviors going forward.

People are back shopping in the grocery stores. But the share of consumers buying their groceries online and picking them up in stores has increased almost 30% since January of 2020 — even at Walmart. PYMNTS Intelligence data finds that more than a quarter (27%) of Walmart+ subscribers say they got their subscription to get free grocery delivery. These same studies show that Walmart’s online acceleration is driven, in large part, by grocery purchases.

The doctor’s offices are again places where patients gather to wait for their appointments. But today, nearly a third (31%) of consumers use telemedicine services every month to talk to their healthcare providers. At the beginning of the pandemic, it was estimated that only 5%-8% of the U.S. population even knew that telemedicine (visiting your doctor from home) was even an option.

And yes, fewer people are working remotely in 2024 than during the pandemic. But return-to-work mandates are meeting resistance after consumers have spent the last five years forming new habits and schedules that don’t include commuting to and from the office.

The apps that consumers have on their smartphones are the visible, and actionable, cues that prompt their engagement in this digital-first world 24/7/365. These apps have become the easy buttons for connecting to the physical world. They are a starting point, though maybe not always the only or even the ending point, for the path to a transaction, whether that transaction is a purchase, seeing a doctor, ordering food or watching a movie.

We observe a shift to digital that is durable, and a physical world that has truly become an extension of the digital experience. It’s now second nature to nearly every consumer on the planet.

The Five-Year Flashback

I wrote last week about the finite number of hours that each of us have to spend over our lifetime. How each of us makes trade-offs about how we spend them, especially when faced with a serious threat or a massive opportunity that could add or subtract hours in that hours bank. In March of 2020, every person living in the world faced a serious threat to how many hours they might have left. On March 11, 2020, the World Health Organization declared Covid-19 a global pandemic. Life as we knew it ground to a halt.

At that time, cases outside China had increased by thirteen times, with the number of affected countries tripling. The WHO expressed grave concerns about the disease’s severity, rapid spread and mounting death toll. Their advice: isolate and socially distance. Those were the only weapons the world had to fight the disease at that time. A vaccine would not be available for most people until April of 2021.

Fear gripped communities as people fell ill and hospitals filled. We all knew someone who had gotten sick. Cities became ghost towns overnight. Lockdowns and masks became the norm.

The pandemic’s toll was staggering.

New rituals that defined the physical world emerged: queuing on footprints spaced six feet apart in stores, outdoor dining in winter, and daily checks of local case numbers. Even after the vaccines rolled out, the threat of severe illness loomed as variants compromised the efficacy of existing vaccines. That kept many wary of venturing out. So did the friction associated with doing business in the physical world.

For more than two years, people retreated indoors. Out of an abundance of caution, and with the fear of getting extremely ill or even dying, most consumers gladly traded their old physical shopping habits and moved online.

This forced all businesses to get scrappy and innovative — and fast-track their digital agenda to make those experiences better.

Restaurants that never did takeout suddenly figured it out. Online marketplaces stepped in to give once physical-only retailers a place to sell their inventory. Curbside pickup became the hot physical retail ticket. Messaging platforms became sales channels. Clienteling using new apps became a way for customers and associates at stores to engage. Video meeting platforms became substitutes for meeting in the physical world — and remain that way five years later.

Even doctors didn’t want patients in their waiting rooms and shifted scheduled visits to Zoom. Insurers changed their reimbursement policies to give doctors the same payment for a telehealth visit as an in-person session to encourage the shift.

The physical world began to reopen in the second half of 2022, even though it would take until May of 2023 for then-President Joe Biden to officially declare an end to the pandemic.

By then, engaging with businesses online had hit its stride. And the numbers tell the story. PYMNTS Intelligence estimates that there is an additional $90 billion in eCommerce volume, an additional 1.2% in online retail sales, as the result of the permanent shift to digital caused by the pandemic behaviors.

The Revenge of the Physical Experience – Sort Of

People, a little stir crazy and hungry for the social engagement of the physical world that was irreplaceable online, reengaged with the physical world. They booked flights to travel anywhere and everywhere, went back to restaurants in full force and got in their cars and went to the store. “Physical retail is back,” the media and pundits exclaimed.

But “back” is all about what you might be measuring. Physical retail wasn’t exactly in great shape before the pandemic. Department stores sales were in a downward decline for the two decades prior to the pandemic, declining by 51% nominally and by 66% on an inflation adjusted basis from 2000 to 2020.

When people went back to the physical store in 2022, 2023 and even 2024, the cues they got there were different. The merchandise was different (limited), and the service levels were different (not enough salespeople). At first, physical retail sales appeared to tick up, in part because of inflation and in part because people did return to the store. However, when adjusting for inflation, department store sales declined by slightly more, or 67.7% from 2010 through 2024.

At the same time, digital experiences were getting better and better for many of the things that consumers once only did in the physical store. The efficiency of online for certain, predictable everyday or regularly-replenished purchases had moved online. People were still going to the physical store, but not as often — and once there, they were buying different things. Maybe not even spending as much. Their visits were purposeful, and mostly for the things they needed the same day or wanted to inspect before committing to buy.

Take groceries.

Many of the center isle items that consumers once put in their grocery baskets in the physical store in 2019 are now being bought online. Before the pandemic, three out of four consumers regarded canned foods as grocery products to be stuck into their grocery baskets in the store. Today, PYMNTS Intelligence data finds that fewer than two-thirds do. The same holds true for condiments, spices and cooking supplies. The share of buyers who believe that household items like cleaning supplies, paper products and personal or healthcare products are now the things only or regularly purchased in the grocery store has decreased by 10%.

The Digital Shifters

The pandemic has fundamentally reshaped consumer behavior, creating a seismic shift toward digital-first interactions that goes well beyond a temporary hiatus from the physical world. What began as a survival mechanism during global lockdowns has evolved into a permanent — and digital — reimagining of how people engage with businesses, services and experiences.

This transition mirrors what the MIT scientists found in their lab rats. Consistent exposure to a new environment with stronger rewards creates a durable preference for the new, even as old cues with their associated reward systems are presented. Lasting behavioral change occurs when new systems offer greater rewards and the contrast to the status quo reinforces the reason for the change — a phenomenon that is observable in human behavior post-pandemic as well.

Of course, certain physical interactions remain irreplaceable — like getting a haircut, watching Taylor Swift live in concert, going to the Super Bowl, or sharing a meal with friends. But the convenience, efficiency and personalization offered by digital platforms have established entirely new expectations. Consumers now demand seamless, smart experiences that blend technological convenience with human connection.

Emerging technologies like generative AI will accelerate this transformation, promising even more personalized, contextual interactions that blur the lines between digital and physical worlds.

The most successful organizations will not force consumers to choose between digital and physical channels, but instead create experiences that feel natural, intuitive and responsive. They’ll leverage data, artificial intelligence and user-centric design to meet customers exactly where they are — whether that’s on a smartphone, in a physical store or somewhere in between. The pandemic didn’t just change habits; it rewired fundamental expectations about convenience, accessibility and personal interaction.

For a new generation of consumers, digital isn’t an alternative, it’s the primary mode of engagement. Companies that understand and embrace this reality will not just adapt but lead in a world where technology and human experience are increasingly interconnected.

The future belongs to those who see beyond traditional boundaries, who recognize that the most powerful experiences are those that feel both cutting-edge and deeply human.

Businesses that recognize this fundamental shift and view consumer engagement as a fluid, integrated ecosystem will be the true winners.