consumer behavior is shifting during COVID-19, here’s how [Video & Blog]
Purchasing behavior is changing before our eyes
Kristin recently recorded a Facebook Live to discuss recent shifts in consumer behavior, what we're seeing sell, and advise our community on how to best position a specialty brand in what could be the start of a very active search and engagement window around outdoor gear.
Summary:
Kristin takes a deep dive into how consumer behavior trends continue to shift week-over-week during the COVID-19 pandemic. We dug up the most recent information for you on today’s consumer behavior from the Channel Mastery podcast, e-commerce data from our clients, Klaviyo (our preferred email service provider) and additional resources. We begin by covering broad trends, and finish with our thoughts on what this means for specialty brands in the outdoor space.
On April 15, Women’s Wear Daily published a piece titled: Not All Change is Bad: Consumer Behavioral Scientist, Patrick Fagan shares insights into ongoing trends as coronavirus continues to cause change.
Patrick Fagan shared that he’s seeing a trend in consumers called the ‘behavioral immune system’.
When people feel threatened they show predictable behavioral responses, including becoming more conservative, more risk-averse, more insular, and do more stereotypical thinking.
Fagan also told WWD that, “the virus has been a boon to ‘transhumanism’ — that is, the merging of humans and technology.
For example, socializing and entertainment has become an almost entirely digital thing, now.
But socializing and entertainment are not the only things to go almost entirely digital…
Across the board, we’re seeing a strong spike in e-commerce - as reported by our clients, large retailers and search trends.
CNBC published an article yesterday sharing Q1 earnings from the retail giant Target. A few interesting takeaways are below. We invite you to consider your own retail strategy as you hear the following consumer-behavior analysis tied to this earnings report:
Consumers are prioritizing needs over wants, changing the mix of what they’re purchasing through the Coronavirus – no matter what the channel.
Investors are trying to figure out customers purchasing patterns, as Target’s sales show a progression from “pantry loading a little bit, then taking a rest, then shopping again, but on the online side of it.”
So far in April, comparable digital sales have increased by more than 275% from a year ago.
Same-day services have gained popularity during the pandemic. In April, Target has had weeks when drive-up volume was seven times greater than normal. It’s had single days when the volume of order pickup was twice as high as Cyber Monday. On the Friday before Easter, Target did more volume through Shipt than it typically does in a week.
Analysts expect consumers new habits to stick, as they discover the ease of driving up and having Target employees put purchases in their trunk or having a shopper from Shipt drop bags of groceries at their home.
What could that mean for your retail ‘re-opening’ strategy?
The International Council of Shopping Centers (ICSC) reports that 60% of Americans will feel comfortable going to malls in June or soon after. This is from an article published April 15 on Chainstoreage.com.
50% of those surveyed said that they “imagined themselves getting their nails or hair done, working out at gyms, or receiving massages.”
Nearly half (49%) said they would be spending their stimulus money on groceries and other household essentials, while just over a third said they’d devote them to housing costs such as mortgage payments.
The Target earnings report story on CNBC also shed interesting light on the broad-view of “new essentials,” which in itself sheds light on consumer mindset and behavior. We can easily relate with this, right?
Don’t forget that you’re (being a specialty retailer/brand) a great bellwether to shifting consumer preferences right now…
“Target announced in late March that it would change focus on strategic priorities, too, such as plans to add fresh food and alcohol to curbside pickup.”
This hurt, I’m sure, as Walmart and Amazon have doubled down on this and recouped a lot in doing so. In this same report, it was cited that there have been days where Target saw a 7x increase in BOPIS (Buy Online Pickup In Store).
Consider BOPIS carefully - it is literally not going to go away and it was already gaining steam. What’s happened with COVID is about a four-year acceleration to digital in our markets. Retailers and vendors must be prepared to serve consumers and keep in mind, those consumers have a different, higher bar on what ‘friction’ entails in their research and shopping experiences.
Consider what “In Store” means now. Chris Walton and Anne Mezzenga of Omnitalk consider it in its basic sense - a place where consumers get goods. While we’d like for them to shop with us, they may consider us now to be pick-up points.
To vendors, that could mean micro-fulfillment
To retailers, that is a very different perception of foot traffic
Consider what the options are for creating value and a lifetime consumer in this new framework of expectations by the COVID-19 consumer
Let’s look at consumer trends, essentials, and outdoor recreation
1. Stocked up on household essentials, food, and medications.
What does that mean for us?:
At the start of the shelter in place mandate people were buying essentials and emergency preparedness products – this was when stores and businesses were closing
2. At the start of April (mid-pandemic), Target saw a spike in supplies needed to work and attend school remotely, as well as games as they sheltered in place.
What does that mean for us?:
Items like bikes were purchased in droves. Our client Diamondback said that bikes were literally flying out of the warehouse. It also means entertaining accessories from outdoor manufacturers began to sale, like ‘camping at home.’ That is in addition to the continuing sales of ‘prepper’ products.
3. Then we get to recent weeks. Target saw customers listen to government and public health officials and return to shops while wearing face masks.
What does that mean for us?:
If you have not yet, retailers should consider curbside pickup options, and brands should be doing all they can to support this. Take every opportunity to build relationships with consumers as they’re picking up product - get creative and scrappy.
How are Verde’s clients doing from the direct-to-consumer e-commerce point-of-view?
We took a look at our clients Google Analytics data from April 1-22 versus the prior 22 days and found some interesting trends.
Google Analytics Data: April 1-April 22, 2020 vs March 9-March 31, 2020
Insights:
'Survival' products are trending down, those were a big focus for people early on in the pandemic.
Bikes, such as our client Diamondback, are seeing bikes fly out of the warehouse, and bike shops are extremely busy servicing and building bikes (mostly by appointment and drop-off).
Health/wellness/camping are trending up:
Why is this?
Consumers are shifting away from prepping/nesting/essentials and starting to think about summer.
Consumer are looking to buy online/direct as retailers are closed and Amazon delayed shipping and fulfillment of non-essential items.
With several brands, the data and graphs clearly show when the stimulus checks started hitting accounts on April 14th/15th.
We had lots of window shopping over the last month, and now they are coming back to buy (Do you have your abandoned cart emails activated?).
We did see a dip on Average Order Value - That is being caused be a couple of things: consumers are price sensitive right now, and brands are seeing more new customers who may be new to the sport - which would align with purchasing an entry level product.
Case Study:
Our client, Cascade Designs, has also seen a shift in sales - from the water category (preparedness products) to tents and sleeping bags. This shows that people are starting to think about summer outdoor activities. Tents are also a higher price point, so it makes sense that people waited for their stimulus checks.
Within the past seven days, five out of the top ten pages with the most website traffic are for tents. This shows a shift from a few weeks ago, when the majority of page views were for emergency preparedness products, such as water filters and stoves.
They have also experienced a number of NEW visitors. Over the past 7 days, 77.4% of visitors to the site were new. This is why having media placements and search optimization are so important - without these visitors would have never found MSR.
Let’s take look at Klaviyo’s 32,000 email customers
Over the past month, Klaviyo has been surveying their 32,000 customers and sending daily updates with the data. The result have been fascinating.
Disclosure: Verde is a Klaviyo Master Partner and we manage several of our clients email programs using their platform.
Here are some of the results:
The week of April 16, 2020 had a massive increase in ecommerce sales, especially in the new essentials category.
Average daily sales in April increased 39 percent above averages in March.
This spike could be attributed to individuals receiving their stimulus checks, but this is just an assumption at this point.
Sporting Goods sales have increased 83 percent since March 15, 2020. This is likely to accelerate into the spring and summer months as people look forward to getting outside.
We combined average daily sales across the same 32,000 Klaviyo customers. Below are the increases month-over-month (MoM):
January–February: 13 percent increase
February–March: 15 percent increase
March–April: 39 percent increase
We don’t expect this trend to slow down until brick-and-mortar stores start to open and things get “back to normal.” Consumers say they don’t believe stores will open until June, so, in theory, we have about two more months of these growing trends.
What does this mean for your re-opening strategy? We want to hear from you!