verde consumer behavior report - december 1, 2020
If Thanksgiving is usually a time for gratitude and reflection, this year the turkey (or tofurkey, for our vegan friends) seemed to come with a shot of anxiety. We truly hope you found some fun and some peace this past weekend.
If your weekend included some outdoor time, you may have been in the minority. While widespread Black Friday/Cyber Monday sales results are still dripping in, it’s clear that many people committed to the couch for some serious online shopping. Here’s what we know.
“The leading economic indicator is...the virus”
The team over at Marketplace has heard that so many times, they attribute the quote to an undetermined number of analysts. In its daily COVID-19 related statistics, Marketplace reported for or Nov. 30, 2020 (one day, not cumulative):
Record high COVID-19 patients in the hospital (93,219)
Rising number of new cases (134,814)
1.17 million air travelers on Nov. 29, 2020
Whereas over 9 million people flew in the same time period last year
So how did the surge affect holiday shopping? Black Friday online sales were 21% higher than 2019
Enough about online. How’d brick and mortar fare?
In a nutshell: low traffic, high conversion. Despite the grim title, “Bleak Friday for Stores as Pandemic Pushes Holiday Traffic Online” The New York Times weekend shopping round up wasn’t all bad news for physical retailers.
Morgan Stanley estimates an overall drop of 20% in Black Friday sales compared to 2019
Online sales (as noted above) were up 21.6% over 2019 on Friday, hitting $9 billion (the second biggest day ever for online retail)
From Friday through Sunday, online sales totaled $23.5 billion (up 23% over 2019)
Foot traffic in-stores was down 52%, according to Sensormatic Solutions
So where’s that “okay” news for brick and mortar stores?
Target CEO, Brain Cornell, predicts a long holiday season, where shoppers will proceed at their own pace and will be less affected by a Black Friday spike
Customer Growth Partners president, Craig Johnson, told the Times that those who did venture into physical stores this past weekend were there to buy, pushing conversion rates higher than previous years when window shopping was more prevalent
Simeon Siegel, a retail analyst at BMO Capital Markets predicts that the online shopping boom of 2020 will rebalance itself once people feel safe returning to physical stores
Same Day Delivery Continues to Thrive
If specialty and independent businesses need any more reason to work out last mile solutions, check out the same-day delivery service Shipt. Shipt is a member-driven, same-day delivery service that launched in 2014 in Birmingham, Alabama.
We don’t have growth numbers from 2014 to 2019, but according to the company’s website and Yahoo!Finance, the company began 2020 with 100,000 members. As of November, they’re up to 200,000 members and are operating in 260 cities. The goal is to exceed 350,000 members by the end of the year.
Our take: COVID remains the primary force shaping consumer behavior right now. With case numbers spiraling upward, states and counties are grappling with new rounds of safer-at-home measures and lockdowns. Economists are increasingly concerned for a significant economic downturn when the remaining stimulus and protection programs from the CARES Act end on December 31, 2020.
Though many of our specialty consumers fit into a higher economic bracket, and will therefore be less affected financially through the end of this year, it’s important to recognize the human face and heavy toll the pandemic has placed on everyone.
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