verde consumer behavior report - august 19, 2020
How will the ‘stay-at-home’ economy impact the holiday season?
Every other week we share the latest trends in consumer behavior that are impacting specialty brands today. COVID-19 has accelerated a number of consumer behavior trends. Just last week, we reported that we have seen 10 years of growth in e-commerce in three months because of COVID-19. Three months!
E-commerce sales are up 55% year-over-year for the first seven months of 2020. This year, online sales are slated to surpass the total online sales in 2019 by October 5th - well before the holiday season. As we head into the holiday season - a make-or-break time for many brands and retailers - how are trends in consumer behavior going to impact spending?
Last week, Retail TouchPoints released a special report on how the ‘stay-at-home economy’ will reshape the 2020 holiday season, including key planning tips for retailers. The introduction underscores the major changes in consumer spending and retail related to the “stay-at-home” economy. The World Economic Forum noted that consumer preferences will:
“Continue to evolve rapidly as consumers discover new ways of accessing goods and services, receiving an education and doing their jobs. As a result of the crisis, the stay-at-home economy has received a major boost and will catapult to new heights of value creation.”
As we are all trying to better understand this “new normal” or “next normal,” one of the report's contributors, Michael Brown of Kearney, says that we are better off accepting that there is likely to be “no normal,” at least through the close of the year 2020.
Being nimble is the best practice today, retailers and brands that are able to adapt their businesses to meet the consumer where they are - online - are best positioned to get through the holiday season and 2021.
The report continues to share ten trends that should drive your retail strategy for the holidays. The full report - which is absolutely worth a read - can be found at Retail TouchPoints.
Consumers will favor in-store efficiency over ‘experience’ or ‘entertainment.’ This holiday season, focus on safety and efficiency and use ALL of your channels - digital and in-store - to communicate what exactly it is that you’re doing to keep staff and customers safe. For more information on best practices in retail this winter, check out the latest Channel Mastery podcast with Ryan Eittreim of Wintersteiger.
Start planning earlier and be ready to change your plans as needed. Build flexibility into your strategy for the holiday season and try to account for various scenarios, for example: another widespread COVID-19 outbreak.
Start earlier and spread out campaigns. Prepare for the uncertainties surrounding brick-and-mortar traffic and e-commerce spikes by spreading out the holiday season. Sixty-seven percent of shoppers expect to make their holiday purchases online to avoid crowds and exposure. Some brands and retailers will roll out holiday campaigns as early as the end of September.
“Zoom holidays” will shift spending patterns. Fifty percent of Americans plan to host fewer friends and family during the holidays this year. Similar to what we saw with back-to-school spending, we’ll see shifts in priorities as families choose not to host big gatherings or attend holiday parties.
Inventory should have transparency and be accessible across all of your focal channels. Plan to accommodate spikes and shifts in demand. Sixty-six percent of consumers plan to spend more online this holiday season, but in-store inventory is needed for local delivery and curbside pickup.
Optimize your holiday workforce. How are changes in fulfillment, traffic, rules and regulations in safety going to affect holiday staffing? One example: Allocating staff to manage traffic and make sure customers are social distancing and wearing face masks.
Get creative with fulfillment, that will be the point of differentiation for your brand. A few ideas pulled from the report: Small touches, like gift wrapping, or creating digitally integrated experiences - like using a small QR code on the package to access a personal video greeting from a family member.
Change store hours to accommodate traffic and store sanitation guidelines. Big-name retailers including Best Buy, Walmart and Target have all announced that they’ll remain closed on Thanksgiving Day. Many other retailers are limiting hours to guarantee enough time for cleaning.
Use tech to provide the missing magic and a more convenient shopper experience. It’s all about “harmonizing” the brand experience for all consumers - in-store and online - through interactive content, social commerce, voice commerce and more. The top two technologies that consumers want more of, mobile payments (80%) and mobile app ordering (56%).
Utilize appointment setting tools to limit crowds. Best Buy was one of the first retailers to start using online appointment scheduling when COVID first hit. Shoppers felt supported with one-on-one attention from associates, they were able to efficiently manage traffic and keep customers and staff safe.
The Takeaway: Retailers are going to have to go above and beyond the call of duty to create a remarkable experience for shoppers this holiday season - in-store and online. Tap into all of your channels to “harmonize” the consumer + brand experience in-store and online. This means communicating the extra precautions you are taking to keep shoppers and staff safe, curbside pickup and other fulfillment options, as well as sharing original, authentic content to excite and connect with your community. Be flexible and act with humility and empathy - because we are all in this together!
Verde publishes bi-weekly Consumer Behavior Reports on Verde Voice. Be the first to know when the next report drops by signing up for our newsletter below.