Trip consumers are pulling again on impulse purchases amid a coronavirus pandemic
When vacation shoppers rummage through the aisles of shops, wait at the cash register and let themselves be carried away by the sparkle of Christmas music, they often throw additional items into their shopping carts. A box of pralines. A tube of lip gloss. Or the perfect gift for a friend or family member who wasn’t originally on the list.
This year, however, retail analysts expect a decline in buying impulses as consumers start shopping earlier, take fewer business trips, and search for certain gift items online during the coronavirus pandemic.
According to The NPD Group, impulse shopping typically accounts for 25% of total vacation spending. An 18% to 20% increase is expected this year – a potential drop in revenue of $ 5 billion to $ 7 billion for the season, the research firm estimates.
Marshal Cohen, chief industry advisor at The NPD Group, said the acceleration in e-commerce sales during the pandemic – which is expected to outlast the global health crisis – will force retailers to puzzle out impulse buying in an online To promote the environment. He said spending “goes into the equation, regardless of category,” but is a particularly important sales driver for some goods such as beauty.
“Stores used to take advantage of the crowds, price points, and the ground to get products that weren’t expected in places where they weren’t normally seen,” he said. “How do I navigate in store online without the traffic so you can see things you didn’t expect? This is the challenge facing retailers today.”
This is one of the factors that could lower overall vacation spending, according to the NPD. Customers plan to spend an average of $ 691 during the holiday season – less than the $ 740 they planned to spend last year, according to NPD’s survey of 3,400+ consumers. Respondents said they plan to do about half of those online purchases while on vacation this year.
Some withdraw from giving after losing a job or receiving a cut in wages. Others spend less because they are interested in homemade or meaningful gifts and have different attitudes due to the devastating effects of Covid-19.
During the holiday season, retailers used digital tools to recommend items to customers or to encourage them to purchase more. At Walmart, for example, the retailer has added a “Last Minute Deals” page to its website that spices up fun items, from toys to small kitchen appliances, that shoppers can buy on the fly. The aim is to put together gift guides to provide stunned buyers with ideas or to introduce them to items they might not otherwise discover.
This Christmas season, Bed Bath & Beyond has put together a range of products that go together to encourage people to add complementary items to their shopping cart. For example, there’s a Cozy Backyard Holiday Collection with throw pillows, copper mugs for hot drinks, candles and a fire pit – a selection inspired by families, friends and neighbors who have come together outside to reduce the risk of being together while the pandemic. The homewares retailer has also upgraded its website so it loads faster and requires fewer steps to check out – factors that can result in shoppers clicking away and abandoning their purchases.
Many other retailers are testing other strategies, such as: For example, suggesting items based on where a buyer clicks, clicking clickable targeted ads on social media, or sending them an email later when they leave an item in their cart.
Ambo Bose, chief practice officer at Fractal Analytics, said the artificial intelligence company is working with retailers and consumer goods companies to reach out to customers in new ways – especially during times when they’re ready to make impromptu purchases. For example, the company found that shoppers were more likely to buy chocolates and other sweets on their smartphones if they surfed aimlessly on social media or shopping sites after lunch. This is a good time for candy companies to run a shoppable ad at a compelling discount, he said.
Retailers have been trying to make better use of referrals by using “personas” too, he said. When they learn a customer’s likes and dislikes through buying patterns, they can group them with similar customers and recommend items in a targeted email or sidebar on a web page.
However, this comes with another pandemic-related challenge. Retailers have gained new digital customers as first time shoppers download apps or try online services like roadside pickup. However, you have less information to use.
According to a survey conducted by Adobe Analytics of more than 1,000 US consumers in October, around 9% of new online shoppers do not yet have a sophisticated online shopping profile, e.g. B. An email address on retailers’ distribution lists. The company said this resulted in a 10% decrease in email-driven sales during the holiday season.
Bose said promoting additional purchases will remain a mystery retailers need to focus on. Shopping online even turns some of the most basic shopping principles upside down, he said. Instead of a sprawling store aisle, retailers need to draw customers’ attention to a product on a tiny smartphone screen. Consumers shop with a “search-and-scroll” mindset. And even after seeing an engaging article, they can quickly click away.
“It’s not enough to just put it in the shopping basket,” he said. “While the in-store shopping basket is intended to buy and go to the cashier, the online shopping basket is more of an intention to evaluate.”