COVID-19: An Unplanned Experiment in Retailer Sampling

By Kelly Dotson

The blessing of being at a data company in today’s world is that our daily work is creating order from seemingly chaotic fields of information. Just last month, our working hypothesis was retailers and CPGs were undergoing unprecedented change. Today, we are wiser.

We're organizing our thinking into three periods: managing the chaos of COVID-19, preparing to exit COVID-19, life after COVID-19. First, the chaos of now. We see dramatic shifts on American consumers, and the retail industry at large. Shoppers are seeking to stock up wherever and whenever possible, and retailers are inside out with the run on their shelves. We’re finding that unusually high volumes of household shoppers and switching behavior are at the core of this phenomenon.

Consumers aren’t necessarily spending more on a single shopping trip (in fact, as weeks progress there appears to be some softening in basket size), but there are many more of them out there. We’re seeing volumes of active shoppers at unprecedented levels. Retail channels across the board are up. In fact, the Numerator Shopping Index shows 14 out of 14 retail channels are seeing an influx of unique shopping households vs. a year ago, with Heath and Specialty channels seeing the biggest spikes as preventative care stays top of mind. Some retail channels have more than twice as many households shopping them than this time in 2019. As expected, online continues to capture more trips year-over-year.

However, perhaps less expected is that we're starting to see channels like Beauty, Bodegas, and Gas & Convenience rise in popularity as shoppers look across channels to find items that might be out of stock in their regular stores.

Key for retailers: once these shoppers are in-store, their basket sizes to date are largely stable. In other words, once shoppers are in the store, they're spending what they always have — regardless of inventory shortages and what’s on the shelves. This likely means shoppers move to the next best stock-up items, agnostic of brand or, in some cases, even category. As expected, product mix and other dynamics vary by channel and retailer.

For example, at certain convenience stores, we’re now seeing fewer items in the basket, but these items are at a higher average price per unit. Higher-priced stock-up staples have been added to regular convenience items. And at dollar stores, it’s a volume game: more items each shopping trip, but at a lower cost per item.

Of course, data needs to be interrogated for true understanding. Take the “fast 15” movers, showing week-over-week increases of highly sought-after products. Some of it's expected, such as the increases in wipes and nonperishable foods, but much of the story is in what’s missing. Bleach, for example, didn't make the list. It’s not that it’s out of demand, but rather that it's out of stock on many store shelves. While it might be on the shopper’s list, it’s not necessarily in the shopper’s cart. And when essential items with no clear alternatives (e.g., bleach, diapers, milk, etc.) are out of stock, we start to see consumers shift toward trial of new retailers.

In the quest to meet unmet needs, consumers — already shopping at record levels — are now visiting significantly more retailers than this time last year, bringing unparalleled opportunity for retailers across channels. There's an opportunity both to be in service and to connect with consumers and the communities in which they operate. Brands and retailers both are experiencing unexpected “sampling” if you will, which may lead to opportunities in the future. And so we start on planning and strategizing for a path to exit COVID-19, even as we create order from the chaos.

Kelly Dotson is the chief marketing officer at Numerator, a data and tech company serving the market research space.