Validate your strategies against the key consumer behaviors that will influence purchasing this peak season
With the global economy returning to pre-pandemic levels after a tumultuous 2020, shoppers are reaching for their wallets once more.
However, sales will not return to pre-pandemic levels and demand for tech and durables will likely decelerate, especially with other sectors such as travel and fashion competing for consumer dollars.
As such, it is crucial to track sales in the run up to peak season — and understand consumer attitudes towards spending across sectors.
On the following pages you find several key factors that will shape purchasing behavior in the coming weeks.
of Chinese consumers agree: “post-pandemic, I will spend more to buy what I want, reward myself and enjoy life”.
Source: GfK China Home Appliances White Paper 2021
Supply chain disruptions over the past few months have made it challenging for businesses to meet demand. This has driven unusual pricing developments, with brands having little choice but to pass on rising manufacturing costs to consumers. However, this slowdown in demand is causing retail inventory
to build up, leading to a cooling of inflationary pressures. “Scarcity and demand are slowly easing off. The dynamics are starting to change again,” notes Herzog. This is an opportunity for brands to shift their stock through shrewd price promotions — see section 5 for more on price fluctuations.
Over the past year, the COVID-driven downturn saw consumers tightening their purse strings and cutting back on their discretionary spending. Many consumers shifted their buying focus from “I want” to “I need” and focused on purchasing essential TCG products, such as work-from-home equipment.
While accumulated savings and pent-up demand are now fueling spending in some discretionary categories, the pandemic has fundamentally altered consumer behaviors and attitudes. Consumer calls for plastic reduction in manufacturing and shipping have also continued to increase, with brands and governments alike facing mounting pressure to take action.
As such, after a year of slower living, we expect this need-focused mindset to persist — especially among those with decreased incomes — with many consumers rethinking their values and gravitating toward brands that align with their social and environmental values. Brands therefore need to demonstrate how products fit into consumers’ everyday lives and meet their changing expectations.
With consumers wary of shipping delays and inventory shortages, many are purchasing products ahead of time. “We’re starting to see consumers pull their shopping forward in the season, just as retailers are also pulling their deals forward to capture those sales,” says Lesley Rohrbaugh, Director of Research at the Consumer Technology Association (CTA).
Similarly, GfK's Sales Tracking shows that consumer demand now stretches over a longer period: in 2020, sales increased by 19% in the three weeks leading up to Black Friday, and by 15% one week before. With the seasonal path to purchase commencing earlier than ever, do you need to revise your promotional strategies accordingly?
Click-and-mortar retail is thriving as a result of the pandemic, with consumers preferring the convenience and safety of online shopping.
According to GfK research, e-commerce was king for TCG brands in 2020, growing 35% YoY from 2019.
However, traditional brick-and-mortar sales are still taking place at a significant scale. As such, brands and retailers need to adopt an omnichannel approach, ensuring that their products are discoverable — and purchasable — both online and offline.
“Consumers have become acclimated to shopping and obtaining their goods whenever it is most convenient. This could be in person, online, ship from store, curbside pickup — you name it, and the expectation is that the retailer is offering it,” says Nicole DeHoratius, a faculty member of the University of Chicago Booth School of Business and retail operations expert.
Indeed, according to GfK FutureBuy 2020 research, 55% of consumers said they planned to use click and collect services in the coming year.
The proportion of sales that took place online during the week of Black Friday 2020.
Source: GfK Market Intelligence: Sales Tracking
Track what, where, and how consumers are buying to optimize your sales performance this Peak Season.
Request GfK's Seasonal Peak Monitor.
