The Majority of Consumers Plan to Shop Early This Year: Report

Dive Brief: 

  • Consumers are eager to spend and save money through deals, according to ICSC. In its Annual Holiday Shopping Intentions survey, the firm predicts that holiday sales between November and December will increase by 8.9% to $923 billion compared to last year. Per the survey of 1,005 people, 78% of respondents said they plan to spend the same or more money this year than last year, and 75% said they plan to shop earlier this year. 
  • As for reasons why they’re shopping earlier, 45% said they want to make sure their desired items are available, followed by those who wanted to access early holiday deals (42%) and get their purchases on time (42%), according to the survey. Holiday shoppers are planning to spend an average of $637 on gifts and other holiday-related items.  
  • Most respondents (85%) said they would shop in brick-and-mortar stores this year, but the report predicts that omnichannel options will drive a 13% increase in e-commerce sales. More than a third (37%) respondents said they want to see products in-store, followed by 34% of people who said they want to grab their goods immediately and 30% seek inspiration for gifts, per the survey. 

Dive Insights:

Though reports predict that consumers plan to spend more during the 2021 holiday season than last year, they’re still interested in finding deals. According to the ICSC survey, 80% of shoppers said deals factor into their holiday purchases, and more than a third (38%) of respondents will plan their shopping trips around specific promotional events. 

Other research noted similar findings indicating that shoppers want to stretch their money while spending more this year. Another recent survey from JLL showed that 34.4% of shoppers said saving is their primary goal. Plus, data from Klarna and Deloitte also predict an uptick in consumer spending this year. 

In preparation for a rise in sales, retailers like Amazon and Target have launched holiday deals early. 

“Strong retail spending has driven a significant economic recovery this year despite the ongoing COVID-19 pandemic, and consumers continue to return to pre-pandemic behaviors in the face of uncertainty,” Tom McGee, president and CEO of ICSC, said in a statement. “Consumers have remained resilient throughout 2021, which I am confident will continue during and after the holiday shopping season.”

This article was written by Tatiana Walk-Morris from Retail Dive and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com

CPG Industry Challenges 2021

The global pandemic has had a double-sided impact on the consumer packaged goods (CPG) industry. On the one hand, stay-at-home lockdown orders spurred incredible demand for several categories of consumer goods. According to a recent study, CPG brands experienced more absolute growth in 2020 than in the four years from 2016 to 2019. As beneficial as this surge in demand was for many companies, it also caused temporary shortages across multiple essential CPG categories (famously, toilet paper) and led to a decline in brand loyalty when necessity trumped preference. 

There have been notable recoveries in both the fight against COVID-19 and in the stabilization of consumer packaged goods. Still, the CPG industry will face significant challenges in the back half of 2021 and beyond. Increasing production and shipping costs are likely to have the most direct impact on how competitive companies will fare amid rising inflation. And with consumers becoming increasingly price-conscious, CPG brands will need to find ways to increase profits without passing these costs along to consumers. 

Production and shipping costs continue to rise

Unfortunately, the CPG industry will likely continue facing price increases remainder of 2021 and beyond. The cost of raw materials rose 4.2% between March of 2020 and March of 2021, while labor costs for CPG manufacturers followed the same pattern. 

Shipping complications added on another layer of complexity for manufacturers. Due to high product demand across several categories during the pandemic, CPG companies had to improve their supply chains to ensure products remained on shelves. 

Yet any CPG manufacturer that relies on raw materials from overseas is likely still going to struggle with shipping, both in cost and time. A shipping container shortage, among other factors, has increased international shipping rates in the double digits. Domestically, the long-term truck driver shortage persists, despite increasing wages for drivers. 

Costs are getting passed on to consumers

With the continued rise of production and shipping costs, most CPG companies have been forced to pass these costs on to consumers. All told, the upward push from inflation could cause CPG prices to rise as much as 10% this year. This is undoubtedly concerning for many and could stand to wipe out the wage gains that many consumers have received amid an unprecedented demand for employment.

CPG companies can only pass a limited amount of their costs onto consumers before something gives. The highly competitive market for consumer goods leaves very little wiggle room for pricing too far upward. National CPG brands may find themselves especially conscious of this, given wider consumer interest in lower-cost private label options sold by retailers that often undercut name brands by a considerable percentage.

Rewards programs can deliver a competitive edge

The CPG market is already highly competitive and economic pressures are hitting companies from all sides. As inflation and production costs continue to rise and the potential for supply disruptions remains present, CPG companies need to establish new strategies to drive sales without passing cost burdens along to already price-conscious consumers. 

Considering one of the main challenges that CPG brands are facing is rises in costs across the board, the worst thing a company can do is further dilute profit margins by providing a discount. One solution could be to incorporate incentive programs that provide consumers with something valuable in exchange for their purchase, rather than just a one-time discount.

Incentive programs come in many shapes and sizes. While many use coupons and discounts to influence purchase behavior, this structure dilutes profit margins and drives one-time sales, rather than long-term loyalty and affinity. Others, like Shopkick, offer rewards points in exchange for purchase at full price. This structure allows partners to drive sales in a brand-aligned way without associating their brand or product with a discount. 

Tyson, for example, discovered the value in reward programs after a successful campaign with Shopkick that drove an impressive 4:1 ROI. Using our unique rewards model, Tyson was able to drive incremental sales amongst both new and existing customers without relying on margin-diluting coupons, discounts, or cash-back incentives. In fact, 62% of those who went on to purchase at full price were new or infrequent customers.

Implementing rewards programs like Shopkick can help CPG brands and retailers weather these difficult times through establishing meaningful relationships with customers, maintaining profit margins, and incentivizing shoppers to select your brand over competitors. To learn more about how Shopkick can help you succeed in 2021 and beyond, get in touch with our team

 

Surging Delta Variant Continues to Impact the Way Consumers Shop

Shopkick survey finds that 47 percent of concerned shoppers are worried about shopping in-store 

Just as normalcy appeared to be on the horizon, surges of COVID-19 cases brought by the Delta variant are once again leaving many Americans in fear of what’s to come. Thirty percent of shoppers are more worried about COVID as Delta cases continue to rise, and 40 percent report feeling the same level of discomfort as they did one month ago. Of those concerned Americans, 43 percent report that the Delta variant is impacting the way they shop, and nearly half (47 percent) are more worried about shopping in-store. 

Shopkick surveyed nearly 11,500 consumers across the country to gain an understanding of how the Delta variant is impacting their shopping habits. The online survey was conducted between July 21 – 27, 2021. 

Key Insights Include: 

  • Proceeding with (Pre)Caution: The majority of shoppers (61 percent) are taking extra precautions when shopping in-store due to the rise of Delta. Of those cautious consumers, most are once again masking up while shopping (82 percent), using disinfectants on hands and carts (79 percent), shopping at less busy times (66 percent), using debit/credit cards to avoid exchanging cash (63 percent), and utilizing self-checkout (59 percent).
  • Concerning Counterparts: Of the consumers worried about shopping in-store, 85 percent are worried that other shoppers are not taking the proper safety precautions. To feel safer, the majority of shoppers (70 percent) expect retailers to enforce safety precautions. However, 59 percent of worried shoppers fear retailers will fall short of this expectation. Consumers hope to see retailers disinfecting carts (83 percent), enforcing social distancing (65 percent), mandating masks (65 percent), limiting store capacity (42 percent), and putting a cap on the number of essential products each shopper can purchase (38 percent). 
  • In-Store Stays on Top: Despite consumer fears, shoppers are still headed in-store. In fact, most shoppers (67 percent) report taking the same amount of trips to the store per week as they did last month, and 10 percent have found themselves going more often.
  • Changed Consumers: Fifty-five percent of consumers report that the pandemic has changed the way they will shop forever. Post-pandemic, shoppers expect to continue to stock up on essentials (57 percent), shop online more (56 percent), and make fewer, but bigger, shopping trips (53 percent). However, after the pandemic, fewer shoppers plan to prioritize availability over brand preference (37 percent) and utilize convenience options like BOPIS (14 percent). 

“Even with a surge in COVID cases and consumers wary of in-person shopping, they are still heading in-store,” said Dave Fisch, general manager of Shopkick. “Retailers need to prioritize making the experience as enjoyable as possible, while doubling down their focus on safety. Shoppers will expect nothing less than stocked shelves, a demonstrable commitment to safety in your store, and a trained staff setting the example.” 

Retail Remix Podcast: The Story Behind Shopkick’s Consumer Research

Throughout the pandemic, Shopkick has kept a pulse on rapidly changing consumer behaviors, expectations, and concerns through continuous data analysis and first-party user surveys. Jaysen Gillespie, EVP, Head of Analytics and Data Science at Shopkick, joins Retail Touchpoints to dive into today’s nimble, data-filled, ever-changing retail landscape.

During this podcast,  Jaysen dives into Shopkick’s latest first-party consumer data to uncover the universal truths that are impacting retailers now and for the foreseeable future. “Data is [woven] into everything we do. Every story we have is infused with data, informed by data, contextualized by data, because data is [the] core of communication now”.

In this conversation, he reveals:

  • How vaccine trust has impacted physical retail behaviors and preferences;  
  • New and unchanging safety expectations for brick-and-mortar retailers;  
  • Why supply chain disruption has influenced shoppers’ channel preferences; and  
  • Demographic nuances that will drive back-to-school and holiday results.

Listen to the story behind the research, as well as the key takeaways here.

Despite Vaccinations, Americans Still Expect Safety Precautions When Shopping In-store

Shopkick survey uncovers consumer sentiment toward COVID-19 vaccines and how it will impact current shopping habits

For some, widespread vaccinations offer a glimmer of hope that life will soon return to normal. However, with many Americans (44 percent) planning not to receive the vaccine, consumers say vaccinations will hardly change their current shopping behaviors. In fact, nearly all consumers (96 percent) say they will continue to take personal safety precautions while shopping, and of those who have already received the vaccine, less than half (48 percent) report feeling more comfortable shopping in-store now. 

In its ongoing commitment to support brand and retail partners with regular insights during the COVID-19 pandemic, Shopkick surveyed more than 20,000 consumers between Jan. 20-24, 2021, to learn about current shopping behaviors and how the vaccine impacts those habits. 

National Vaccine Insights:

  • Many consumers do not plan to get the vaccine. While most consumers surveyed have either already received the vaccine (8 percent) or plan to receive it (48 percent), 44 percent say they do not plan to get vaccinated.
  • Millennials are the least confident in the vaccine. Millennials make up the largest segment of people not confident in the vaccine (35 percent) and do not plan to get vaccinated (51 percent). Comparatively, America’s youngest and oldest consumers appear the most confident in the vaccine, with 71 percent of Gen Zers and 75 percent of Boomers feeling some level of confidence.
  • Vaccinations do not mean consumers will flood back indoors. Of those who have already received the vaccine, less than half (48 percent) report feeling more comfortable shopping in-store and taking part in other indoor activities, and only 18 percent say they will do so more frequently now vaccinated. Similarly, of those who plan to get the vaccine, only 15 percent say they will shop in-store or take part in indoor activities more frequently after receiving the vaccination.
  • Personal health and safety habits are here to stay. Nearly all of those who have already been vaccinated or plan to be vaccinated say they will continue to take personal safety precautions while shopping in-store (96 percent and 97 percent, respectively). Precautions include wearing protective face coverings (93 percent), using disinfectants (87 percent), shopping at less busy times (66 percent), using debit or credit cards to avoid exchanging cash (66 percent), using self-checkout (58 percent), or wearing protective gloves (21 percent).
  • Consumers expect health and safety to remain top-of-mind for retailers. Even if a large majority of Americans are vaccinated, 79 percent of consumers expect retailers to continue enforcing health and safety restrictions, such as requiring protective face coverings for shoppers and employees (89 percent), offering disinfectants for shoppers (86 percent), enforcing 6-feet-social distancing (80 percent), keeping plexiglass barriers at checkout (74 percent), and limiting the number of shoppers allowed inside (62 percent). According to 62 percent of respondents, enforcing these guidelines will influence where they choose to shop.

Additional Insights Include:

  • More than half of consumers are using BOPIS for essential purchases. As consumers try out different options for picking up the essentials, 55 percent say they are now using BOPIS (buy online, pickup in-store) at varying degrees, including sometimes (35 percent), often (11 percent), or very often (9 percent). 
  • Stockpiling rates are down and consumers are seeing the impact on store shelves. Forty-nine percent of consumers say they are currently stocking up on essential items, a decrease from November 2020 findings, when a whopping 61 percent of shoppers were stockpiling. In turn, 41 percent say essential items that were out-of-stock or low-in-stock one month ago are now more in-stock, compared to 36 percent who say items are still out-of-stock and 23 percent who have not yet noticed a difference.