April – a month that will be forever etched in our memories. A time of lockdowns, shortages and uncertainty; and for retailers, a month of -56% tracking YOY in revenue. While each month of 2020 has felt like a year, that was a mere three months ago. Now in July, how is retail fairing today?
Status update – is the retail sector OK?
Not all sectors within the retail sector are created equal. According to Amperity’s weekly Retail Monitor, the industries impacted the most include home, lifestyle and jewelry with the biggest swing positively (+383% in June 2020 YOY) in health and beauty.
Overall, it’s good news; US consumers are spending. As of the first week of July, revenue was +10.3%, a positive cursor for an industry that has experienced tumultuous times.
The sectors that saw positive or consistent sales are largely attributed to previously nice-to-have goods now seen as an essential product in the new COVID-19 times, with technology being a key example. According to the Consumer Technology Association, households with people under the age of 35 are driving purchases of tech, with over half purchasing at least one device in the past week.
Current Consumer Trends
So we know purchases are happening; what are the trends driving these purchase decisions? Here are four new trends that have emerged from American consumer behavior over the past few months:
- The new treat yo’self items: While shopping behavior is less YOLO and more sensible, what was typically seen as treating yourself has shifted completely. It’s not the $700 leather jacket anymore, instead it’s an ergonomic, leather chair for your home office.
- A little experimentation never hurt anyone: According to Canvas8’s Pandemic Culture Report, 50% of US consumers want to try new brands during COVID-19, willing to go slightly outside of comfort zones in the quest for finding something better. The key takeaway: brands should broaden their targeting, think outside the box and treat their loyalty base well through increased personalization and human connection.
- Entertainment is king: Our home is our constant, and we are seeking escape more and more. Investing in new streaming services to keep us occupied, and online connections. According to the CTA, as of June 26, 56% of US Households reported using streaming video services, 32% streaming music, and 18% online multiplayer gaming.
- Revenge spending: Post-lockdown, Chinese consumers spent with a vengeance as quarantine lifted. In the US, things look slightly more restrained, however consumers are happy to spend for ‘self-investment’ – how can this improve my life, right now in my current situation. Data from Spate showed that Google searches for skin care were up 75.7% week-over-week as of March 29, and brands like Aromatherapy Associates have seen huge 233% year-over-year sales spike on their own websites.
What this means for marketers and communicators
So you have a new product, should you launch it now? The Hotwire answer, hell yes. The team launched a new product to market in March, in the midst of the pandemic, and the client broke pre-sale records. Now with consumer spending bouncing back, brands should continue to push forward, keeping in mind a few key principles.
- Be super tight on key benefits: With consumers evaluating purchases with a microscope to see if it’s worth their spending, it is important to focus on how this product will enhance lives, right now. Ensure that you’re showing how your items can be of benefit in today’s stay-at-home environment.
- Surprise and delight: How can consumers feel like they are getting value with this purchase? Free accessories or % off next purchase are ways customers will be inclined to purchase your product over another. For returning customers, loyalty programs and personalized engagement is key. Be human.
- Expand communications timeline: We are in a realm of breaking news every day. Reporters are covering this every day and so it’s important that they have time to consider the product/brand news we are sharing, and give them space to cover it when the news cycle allows.
- Social Shopping: Be present where they are… social media. Social commerce is rising, Americans are checking social media even more now, they use it as inspiration to find new products and according to Adobe’s Digital Economy Index in May 2020 smartphone purchases increased by 10% in May compared to January. Social means not just thinking about your brand pages, but also tapping into media and influencer social channels to amplify your product awareness.
Retail has been in recovery, but July is showing signs of a retail re-emerge. COVID-19 doesn’t mean tools down for marketers, if anything, there is an opportunity for brands to really resonate with consumers through smart communication tactics. If you need help engaging your audience right now, Hotwire is here to help with a track record in communications that help drive retail sales. Read more from our retail experts on the Retail HOTLine or reach out at retailhotline@hotwireglobal.com.