Flattening the Curve and Filling Carts: What’s Next for Retail
During a normal May, retailers would be wrapping up their spring break sales and preparing for Mother’s Day, graduation and other typical summer promotions that would soon follow. However, this isn't a normal May, and many retailers are left scrambling to determine how they can adapt to an increasingly digital path to purchase.
There’s no shaking it: many businesses have taken a hit over the last month or two. However, just as regions and countries report that they're successfully flattening the curve of a global pandemic, there are signs of positivity with respect to consumer confidence, even if how people purchase is irrevocably changing.
Based on feedback and sentiment from over 10,000 consumers week-to-week, the overall increase of “concern” and overall decrease in consumer spending have both flattened. While late March and early April saw increasing numbers of consumers saying they're “spending less,” the rate of decline in reported spending appears to be slowing down. Most recently, as of April 13, that number stabilized entirely at 50 percent, with the other 50 percent saying they’ve spent “the same” or “more.” Is the only way from here up?
With emerging (and hopefully continuous) news of declining hospital admissions, a step-by-step plan to lift social distancing over time, and stimulus checks now arriving, perhaps more consumers are trying on their “actual pants” in preparation for the end of hibernation.
That said, we're not yet seeing data that would suggest upward shifts in purchase intent across major retail categories. Consumers, for the most part, are envisioning that the next couple of weeks will be very similar to the past couple of weeks with regard to their retail spending habits. Nonetheless, this stabilization or flattening of the concerned consumer curve is progress.
That progress is being felt most by e-commerce retailers — and those embracing e-commerce for the first time. Week-over-week we've seen online shopping claim a larger percentage of consumer spending. Most recently, the percentage that consumers reportedly spent online overall ticked up slightly again (from 39 percent to 41 percent), and online grocery shopping saw a similar increase. Meanwhile, intent to physically leave home for dining, movies and traditional shopping remain flat for now.
The data would suggest that most consumers are making online grocery shopping work for their household. As fewer consumers are shopping for groceries in-store (down 11 percent since March 23), the number turning to online grocery is up 6 percent. While this growth rate may seem modest, it does represent the expansion of the online grocery audience, a figure that will likely expand further as 43 percent of people report that they plan to purchase groceries online in the next two weeks.
Meanwhile, an increase in the time spent at home has also led to increased consumer interest in ways to pass the time. While spending in other product categories may be down, home entertainment purchases are relatively stable, with 28 percent of people reporting recently making a purchase in this category.
For retailers, this has been the ultimate test of their digital and e-commerce readiness. The lingering question is, despite a massive shift to online visitation and spending (especially in grocery), has the customer experience been positive? Anecdotally, I wonder if my family is one of many that ran to support the local deli and grabbed some frozen meals, in part because online grocery ordering and delivery was equal parts uncertain and frustrating.
Now is the time for retailers to truly tune in to the online shopping experience they offer customers — whether directly or through a third-party service — and fine-tune the experience as best they can. After all, even if people are repeat customers now out of necessity, those first impressions will have lasting impact in the months ahead.
As the curve flattens and confidence rebounds, how will your actions today fill carts tomorrow?
Carl Van Ostrand is the vice president of consumer insights for DISQO, an audience first insights platform amplifying innovation via a symphony of high-fidelity data.
Related story: Shopping in Place: How Quarantines Affect Grocery Carts
Carl Van Ostrand is the VP of Consumer Insights for DISQO, an audience first insights platform amplifying innovation via a symphony of high fidelity data.
In his role, he develops new applications of behavioral data while helping clients address needs using behavioral data. Carl has 15 years of professional experience in digital market research, working closely with clients while leading and executing projects. Carl’s career has spanned full service agencies, innovative research technology companies, and global panel companies.