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Shopper Outlook H2 2020 July 2020

With lockdown restrictions being relaxed and the economy starting back up again, the landscape for shoppers is evolving fast.

While we see many old behaviours starting to return, there will be longer term differences in shopper habits, rituals, priorities and actions.

In part, this is because COVID 19 still with us and circumstances will force certain behaviours.

But it is also because of the decisions we are choosing to make as a result of economic uncertainty, anxieties and re-evaluated lifestyle choices.

Challenging economic outlook

It remains our view that, while the economy is now reopening, a rapid recovery of consumer confidence is unlikely to be on the cards.

The recent uptick in consumer confidence is likely to be a short-term boost resulting from a sense of normality returns

However, The furlough scheme wind down will lead to job loses, GDP is sharply down and, Even with low interest rates, many shoppers will be reluctant to make major financial commitments.

Savvy shopper panel

In Savvy's most recent research we took a snapshot of the shopper, looking at their current behaviours and attitudes, and gauging how their mindset is evolving.

As well as providing an essential understanding of the current state of play, the research can help us make better informed decisions when planning.

Shoppers are more conscious of spending and saving in the face of uncertainty and disruption

We see a continuing shift towards recessionary shopping behaviours

And, more broadly, changes in consumer behaviour, particularly the rise of scratch cooking and meal planning.

Lockdown has reshaped how we spend our time

Evening meal times have become a focal point of the day, even as lockdown measures have been eased and we return to a more normal way of life.

Not only is the evening meal becoming more important, we have also seen that shoppers are becoming more ambitious, searching for and learning new recipes and taking more time to prepare meals.

We've also seen a rise of 'treat meals'. While we expect this to fall back a little as more people start to eat out, it will most likely be a gradual process.

During lockdown we saw a resurgence of the 'big night in'. The majority of shoppers enjoyed spending more time at home with their families and nearly two-thirds expect they'll continue to spend more evenings at home, even once all restrictions have been lifted.

Indeed we can currently see that many shoppers remain cautious about visiting pubs and restaurants - and that is unlikely to change significantly over the next couple of months.

What's the outlook for summer?

Shoppers expect they will spend more time in their gardens this summer and eating and drinking outside looks set for growth in 2020.

Shoppers also expect that evenings in and playing games will remain firmly on the agenda throughout summer.

It's not only about outdoors, with shoppers expecting that they will be playing games and watching TV more regularly this summer, compared to 2019.

Back to school planning needs to take account of a more concerned shopper mindset

Back to school for most pupils will be in September.

Even in September many parents will be anxious about their children returning to school and, as the furlough scheme starts to wind down, we expect money concerns will escalate for many families.

Convenience, inspiration and value are always important to shoppers during the back to school period, and particularly so this year.

One-stop shops, both online and in-store are priorities. Shopper expect products from across categories to be located together, alongside inspiration and ideas.

Nearly three-quarters of shoppers plan to start shopping for back to school items earlier this year to help spread the cost.

Christmas 2020 will be like no other

Trying to predict the next couple of month is challenging, nevermind Christmas.

However we are already planning, based on what assumptions we can reasonable make and the trends we see emerge from shopper insights.

What can we assume?

  • COVID-19 will still be with us
  • Most businesses will have reopened
  • Social distancing will still be in place, but we’ll be able to socialise in bigger groups
  • Concerns about unemployment and recession will be greater
  • Supermarkets will have returned to more normal trading patterns
  • Online share will remain high, including growth in click and collect
  • Online, including retail.com and social, will be a more important source of inspiration

It will not be back to normal

Gifts will be the target of shoppers' tightening purse strings, with 29% planning to spend less of presents for less close friends and family.

Reflecting the behaviour we've seen over recent months, food expenditure looks set to be relatively well protected for spending cutbacks.

The cost of Christmas is set to be front of mind for many shoppers, with respondents telling us they plan to seek out extra value and plan to spread the cost of Christmas by starting to shop early.

But that doesn't mean it's all doom and gloom.

Money may be under the spotlight this Christmas, but shoppers will still be looking for the magic of the festive season and want to make it special.

Product, promotions and communications should focus on inspiration and added-value, rather than discounting and necessity.

Convenience will be a priority this Christmas as shoppers seek to avoid crowds and increasingly turn to online channels for ideas and inspiration.

Savvy's research also suggests that charity will have major role to play during the Christmas period.

The outbreak of covid-19 has also highlighted and fuelled other trends, which we need to monitor closely

Charity remains a key concern for shoppers

Over recent months there has been a substantial rise in awareness and discussion around charity.

We find in our broader research that shoppers have a high expectation of brands and retailers to be charitable during the pandemic.

Savvy’s research suggests the importance of charities is likely to continue to rise over the coming months.

Shoppers expect charities linked to the COVID-19 outbreak will become more important to them.

There is some evidence that smaller and mainstream charities will be less front of mind.

A new Technology revolution

One of the consequences of the outbreak of COVID-19 has been a rapid adoption of retail technology as retailers and shopper has sought ways to minimise the spread of infection. Retailer sources have told us the in certain areas, the increases in technological adoption seen since the start of lockdown have exceed their previous 18-month forecasts.

Contactless payment

Contactless payment use has increased dramatically as many retailers have encouraged shoppers to use the system.

Penetration has increased among older groups of shoppers who previously had not considered using the payment method.

Self scan

Self-scan technologies have grown quickly over recent months, with many older shoppers getting involved for the first time.

Sainsbury’s and Asda have seen downloads of their ‘scan and go’ apps substantially outperform expectations.

Technology momentum

As we think about the next couple of years, we see growing momentum for further technological development, from enhanced digital loyalty mechanics, highly targeted promotions and in-store mapping.

We see how COVID-19 is altering our perceptions and use of the convenience channel

The majority of shoppers are currently finding it easier to use convenience stores.

Convenience shopping is more planned and people are more actively looking for promotions, particularly younger shoppers.

And finally, we expect online will maintain much of the momentum it has gained in recent months

Many shoppers have been converted as a result of convenience and the ability to budget easily. This includes many older shoppers who has previously never shopped online.

Many local businesses have launched and grown online businesses over recent months. With new supply capability in place and growing consumer interest, we expect this trend to continue throughout 2020.

Final thoughts

Monitor changes in the environment and the shopper mindset – insight and intelligence is more important than ever

Any short-term improvements in consumer confidence need to be viewed in the context of underlying challenges that will manifest themselves more clearly at the end of the year

While many behaviours are returning to normal, we need to be fully aware of the shopper habits, rituals and expectations that have changed

Despite the challenges, there are many opportunities

  • Shoppers are cautious, but are spending again as businesses reopen
  • Events, occasions and moments will continue to shape shoppers’ lives and calendars
  • Shoppers want convenience, new ideas and inspiration – value is not only about discounting
  • Online and digital can inspire and unlock sales
  • Shoppers and the market are more accepting of innovation – now is a time to test and learn

Thank you

Credits:

Created with images by Patrick Fore - "Morning Sunflowers" • Deleece Cook - "untitled image" • Kenny Timmer - "untitled image"