The Covid vaccine might be ready for roll-out but coronavirus fuelled shifts in consumer shopping behaviour have caught marketers with their festive trousers down, decimating the predictions and forecasts that businesses rely on during the crucial Christmas season.
So says a new study by BlueVenn, which reveals nearly half (45%) of Brits are planning to dramatically change the way they shop this year. Young people are at the forefront of this shift, with three-fifths (59%) of 16- to 34-year-olds expecting to significantly change their shopping behaviour.
For marketers, there are considerable fears about their ability to react and respond. Nearly three-fifths (58%) are concerned that they will not be able to adapt their marketing activity, jumping to four-fifths (80%) of brands with revenues between £100m and £499m.
Retailers are most worried that they will fail to ensure personalisation over multiple channels (53%) and miss out on target customers (51%), but a fear that they will waste advertising budget comes in close third (42%).
Despite lockdowns and health concerns around Covid-19, half of all shoppers will carry out their shopping through a mixture of online and instore trips.
Even among the group of hybrid shoppers, there has been a distinct shift in the proportion buying online this year.
‘Hybrid shoppers’ in the UK last year conducted the majority of their shopping instore (averaging 88% instore compared to 12% online), however, this year the balance has shifted, placing a greater focus on online purchasing (averaging 55% online compared to 45% instore).
BlueVenn chief executive Steve Klin said: “For multichannel retailers, with both an online and high street presence, our findings are both a blessing and a curse. Our research shows there is understandably a trend towards online shopping, but also suggests that retailers need to be prepared to accommodate the rise of the ‘hybrid shopper’ – those customers that increasingly mix both online and instore trips as part of their festive spending spree.
“With just under half (41%) of those surveyed admitting this seasonal behaviour will be indicative of their future shopping habits, gaining a full understanding of that behaviour will be critical. While retailers are rightly embracing digital channels, they will need to be able to track their customers’ meandering passage between their online and offline channels.”
In a challenging financial environment for retailers and consumers alike, just over one in eight (13%) say they will spend more this Christmas, while a considerable portion (41%) of shoppers believes they will spend less.
For those retailers reliant on physical stores, a worrying trend is emerging, with the average number of Christmas shopping trips across November and December slashed from four last year to just two this year.
There is, however, some solace, as more than a quarter of shoppers (26%) say they will increase the amount they spend on each trip by 10% to 30%, rising to 41% for those aged 25 to 34. Capturing this interest and drawing footfall among shoppers – especially the big spenders – will be being crucial.
Despite many shoppers stating that they will reduce, or consider reducing, their overall festive spend, there is still hope for brands. When it comes to building brand loyalty, the majority of shoppers (56%) say that having purchased from a company in the past is important, compared with 43% who believe flash sales are important.
However, with a noticeable shift to online purchases, the increased competition in the digital world could lead to many retailers failing to capture their traditional Christmas revenue in an online environment. In fact, 62% of marketers reveal they are worried they will lose regular customers as they shift online.
With brands hoping to take stock of the changing landscape and improve marketing practices, more than four in five (84%) marketers believe they are able to capture the data required to take advantage of increased online spending and use it to guide future marketing strategies.
However, 57% concede that they do not collect data about their customers’ path to purchase across both instore and online channels. Even more alarmingly, 44% of marketers are not even tracking customer spend across both channels.
Klin added: “As many retailers lick their wounds this year, in order to rebound successfully, it’s important that they ensure they are building up a clear picture of their hybrid customers, so that they can understand their behaviour and spending patterns, both online and offline.
“Some historically loyal offline customers will be conducting more purchases digitally, while others will be craving the high street. Being able to track and understand this behaviour, and act on it to create personalised experiences, will be business critical in helping to drive sales, now and in the future, so retail marketers will need to find solutions that will allow them to join up the online and offline journey before they lose customers altogether.”
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