Seismic shifts in consumer shopping behaviour are happening in the run up to the festive period, according to new research from BlueVenn.
45% of British consumers say they will dramatically change the way they shop this year, decimating the predictions and forecasts that marketers and businesses rely on during the holiday season. And it appears that younger generations are the most likely to upend expectations and readily embrace change, with 59% of 16-34 year olds expecting to significantly change their shopping behaviour.
For marketers, there are considerable fears about their ability to react and respond. The majority of marketers (58%) are concerned that they won’t be able to alter their marketing efforts to cope with changes in consumer behaviour, jumping to an eye-watering 80% for brands with revenues between £100 and £499 million. 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 in-store trips. Even amongst 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 in-store (averaging 88% in-store compared to 12% online), however this year the balance has shifted, placing a greater focus on online purchasing (averaging 55% online compared to 45% in-store).
Steve Klin, CEO of BlueVenn, commented, “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 in-store 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. Whilst 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’ll spend less this festive period.
For those retailers reliant on physical stores, a worrying trend is emerging, with the average number of Christmas shopping trips across November and December dropping from four last year to just two this year. There is, however, some solace for retailers, as more than a quarter of shoppers (26%) say they’ll increase the amount they spend on each trip by 10-30%, rising to 41% for those aged 25-34. Capturing this interest, and drawing footfall amongst shoppers, will become increasingly important and a highly competitive business, with attracting the biggest spenders being crucial to success.
Despite many shoppers stating that they will reduce, or consider reducing, their overall spend at Christmas, there is hope for brands. When it comes to building brand loyalty, the majority of shoppers (56%) say 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 shops failing to capture their traditional Christmas revenue in an online environment. In fact, 62% of marketers reveal they are worried they’ll lose regular customers as they move 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, a concerning 57% of marketers concede that they do not collect data about their customers’ path to purchase across both in-store and online channels. Even more alarmingly, 44% of marketers aren’t even tracking customer spend across both channels.
Klin continues, “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.”