As holiday shoppers navigate the aisles of stores, wait in checkout lines, and get carried away by pairs of Christmas carols, they often toss extra items in the basket. A box of chocolates. A tube of lip gloss. Or the perfect gift for a friend or family member who was not originally on the list.
This year, however, retail analysts expect the impulsive purchase to go down as consumers begin shopping earlier, reduce store trips and look for specific gift items online during the coronavirus pandemic.
Impulse shopping typically generates 25% of overall vacation spending, according to The NPD Group. This year, it is expected to increase from 18% to 20%, a potential sales loss of $ 5,000 to $ 7 billion for the season, according to the market research firm.
Marshal Cohen, chief industry adviser to The NPD Group, said the acceleration in e-commerce sales during the pandemic (which is expected to overcome the global health crisis) will force retailers to tackle the ‘puzzle of encouraging impulsive shopping in an online environment. He said spending “feeds the equation regardless of category,” but it’s a particularly important selling factor for some merchandise like beauty.
“What the shops used to do is use the crowd, use the prices, use the floor to have a product you didn’t expect to see in places where they normally wouldn’t be,” he said. “Without in-store traffic, how can I browse online to get you to see things you didn’t expect to see? That’s the challenge of day-to-day trading.”
This is one of the factors that can reduce overall holiday spending, according to NPD. Buyers plan to spend an average of $ 691 during the holiday season, less than the $ 740 they planned to spend last year, according to the NPD survey of more than 3,400 consumers. Respondents said they plan to do about half of this vacation online this year.
Some retire in the making of gifts after losing a job or receiving a pay cut. Others spend less on gravitating toward homemade or meaningful gifts and have a different view due to the devastating impacts of Covid-19.
During the holiday season, retailers have used digital tools to recommend items to customers or encourage them to buy more. At Walmart, for example, the retailer added a “Last Minute Deals” page to its website that provokes fun items, from toys to small kitchen appliances, that shoppers can buy on impulse. Target sets up gift guides to give ideas to baffled shoppers or introduce them to items they might not otherwise discover.
This holiday season, Bed Bath & Beyond brought together collections of products that go together to try to encourage people to put complementary items in the cart. For example, it has a “Cozy Holiday Collection for the Garden” with pillows, copper cups for hot drinks, candles and fireworks, an assortment inspired by family, friends and neighbors who have grouped outside as in order to reduce the risks when they meet during the pandemic. The home goods retailer also improved their website, so it loads faster and has fewer steps to pay for, factors that can cause shoppers to click and abandon their purchases.
Many other retailers are trying other strategies, such as suggesting articles based on where a buyer clicks, showing targeted ads that can be clicked on social media, or sending them an email later, if they leave an item in the cart.
Ambo Bose, internship director at Fractal Analytics, said the artificial intelligence company works with retailers and consumer-packaged goods companies to reach customers in new ways, especially when they are willing to make purchases of the moment. . For example, he said, the company has found that shoppers are more likely to buy chocolates and other candy on their smartphone when they browse meaninglessly on social media or shopping sites after lunch. It was a good time for candy companies to show off an affordable ad with a hefty discount.
Retailers have tried to improve the recommendations by using “people” as well, he said. As they get to know the likes and dislikes of buying patterns, they can group them with similar customers and recommend items in a specific email or in a sidebar of a web page.
Still, it comes with another pandemic-related challenge. Retailers have attracted new digital customers as shoppers download apps or try online services such as edge collection for the first time. But they have less information about them to use.
According to a survey conducted by Adobe Analytics on more than 1,000 U.S. consumers in October, approximately 9% of new online shoppers do not yet have an online shopping profile, such as an email address on their listings. retailer distribution The company said this led to a 10% drop in email sales during the holiday season.
Bose said encouraging additional purchases will continue to be a puzzle that retailers will need to focus on. Online shopping even reverses some of the basic principles of shopping, he said. Instead of a large store aisle, retailers should draw buyers ’attention to a product on a small smartphone screen. Consumers shop with a “search and scroll mentality.” And even after seeing an attractive item, they can click quickly.
“Just putting it in the shopping cart isn’t enough,” he said. “While the in-store shopping basket is a purchase intention and is directed at the cashier, the online shopping basket is rather an intention to evaluate.”