09APR The initial retail trends we are seeing during the current coronavirus pandemic
The past few weeks have been a whirlwind for the FMCG and retail industries and as we head further into uncharted territory, we are starting to see some real change in consumer and shopper trends. As we journey through this pandemic, our thoughts will turn to the future and we have looked at some of the elements that we can look towards for longer term impact.
People first ethics are important
We have seen the country come together more, over the last few weeks, than the entire of the last few years. Considerations for the people have been at the forefront of this, everyone is looking at how businesses are helping their own teams and the most vulnerable in society.
Some major names have publicly done more than others and this is something that consumers are likely to remember. People are wanting to support those businesses that stood alongside others during these tough times.
For some businesses, thinking about times post-coronavirus may be difficult at the moment, however, how we all treat our employees and those around us will be remembered for a long time. Those that shine now will reap the benefits in terms of team loyalty and engagement in the future.
Beautiful Britain
Local businesses are seeing communities rally around them, with people recognising the importance they play in our society. We are hopeful of a local ‘love-in’ happening as a result, with staycations, local produce and small businesses being key to revitalising the economy.
Making sure your brands are available – and more importantly visible – in these smaller shops is key to maximise opportunity across all channels. Momentum is important, so don’t forget the convenience sector in marketing plans.
The rise of online shopping
One of the areas we have seen this pandemic highlight is the need for online shopping – both in home delivery and click and collect forms. Before coronavirus we had seen predictions that online shopping would grow to be 12% of all grocery spend over the coming years – we expect that the last month has helped this on it’s way.
6% of UK adults have completed their first online grocery shop in the last two weeks (source: Greenshoots), with the elderly and vulnerable and their relatives likely being the ones to take advantage of this.
There is, however, still a need for regular top-up shops and fresh food shopping in store during this time but the future depends on whether these first time online shoppers stick with it, post pandemic.
Even with the growth of online, retailers will still need support to ensure availability and visibility for both the in store shopper and the online consumer. Innovation needs to stand out in both arenas. It’s all too easy to set favourites online, so you need to make sure your brand doesn’t get lost.
Whether instore or online, your brand needs to pop to end up in the shoppers basket.
Change of brand habit
Availability was the first major hurdle to overcome, in the initial rush to the shops at the outbreak of coronavirus. This meant that consumers were faced with trying new brands.
These buying habits could stay with us, especially if those alternative purchases were perceived to be better value for money. This means brands are going to have an even bigger job to sell the benefits of their product and ultimately regain the loyalty of consumers.
This switch up in brand loyalty is likely to effect non-food goods greater, with shoppers buying what they can. Availability is king in this situation and whilst there may have been a surge of sales initially, brand advocacy is going to become ever more important.
The forward purchase
Everyone will have seen the images of trolleys full of household goods over the past few weeks, IGD confirmed this is wide spread with 59% of shoppers stating that they are stockpiling, or planning to.
This will have an impact on the purchase frequency of certain goods, as people have more stored than they need at any particular time. Between the 9th-22nd March sales of paper products rose 134%, packaged goods rose 70% and over the counter medication went up by 122% (Source: IRI). For non-perishable goods, this is a great short-term boost to sales but these are likely to flatten out across the year.
Of particular interest are white goods and consumer electronics. Anyone that has tried buying peripherals for computers, games consoles, TV’s or even fridge freezers, will know that there has been a surge in sales and stock is low.
This is indicative of consumers striving for a better home living experience, with much more time being spent in the house. This inevitably means that these purchases have been brought forward, which indicates a likely lull in purchases later. Marketing will be key to motivate consumers to purchase again.
Premium products and old favourites
Demand has surged for everyone’s favourite products but there is also a growth in premium lines as we all want to treat ourselves to help get through the crisis. Health is still hugely important, but we predict that consumers will treat themselves and premiumise indulgent purchases during this period.
As people can’t go on holiday, go to restaurants or spend money on leisure items, that extra purchase of a creature comfort becomes even more important. Consumers will spend a little bit more on indulgent categories, such as confectionery, ice cream and snacking. Don’t forget about alcohol as well – we are approaching summer, so the natural seasonal increase will continue to happen.
Being clever with your online marketing will help drive sales. We all have those friends that are posting “the wine is calling me” and there is a great opportunity for premium brands to resonate with these consumers.
With lower footfall at this time, impulse purchases are key for premium brands and these initial purchases can be a way to build brand loyalty.
Our takeaways
1. Try to think beyond the current coronavirus situation. How will your brand continue to stand out and capture the consumer’s hearts and minds?
2. Think about online and digital, this is a growing channel and will help during this time until people are able to go back into stores and return to their ‘normal’ habits.
3. Be prepared for the squeezing of space in store. Retailers need to ensure there is enough space for top selling lines to avoid poor availability. At some point, there will be a need to bring back a wider choice. We will need to help retailers achieve this when it’s right and relevant to do so.
