The global retail sector was in an unprecedented state of flux and as the end of 2020 approached, Nielsen identified a range of evolving consumer groups as well as four Holiday/Festive consumer behavioral resets related to this crucial holiday period.
Nielsen Retail Intelligence Managing Director for the Philippines Patrick Cua comments; “As the end of the year approached, upcoming festivities looked very different for consumers in the Philippines. With mobility and mass gathering restrictions still in effect, Filipino consumers continued adapting to the homebody economy and extended to how they celebrated Christmas during the pandemic. With cooking being central to festivities, we predicted growth in baking and food category this year.”
With Christmas celebrations being more intimate and smaller in 2020, food was integral to this festive season with a rise in food categories such as ham, all-purpose cream, pasta, and canned foods.
Christmas shopping categories
While constrained shoppers were looking at a single consumption, insulated shoppers were indulging in gifting food and health products. Brands catered both constrained and insulated shoppers during Christmas.
Against this backdrop, Nielsen identified five different consumer groups that indicated how financial and physical restrictions manifested leading up to the festive season.
- Constrained and Restricted consumers have suffered income loss as a result of COVID-19 and have less money to spend and also have less freedom to physically congregate and shop for their holiday needs, due to local restrictions to travel, business openings and social interaction. As a result of limited physical shopping, they had less opportunity to shop around for the best deals and assortment.
- Constrained but Free consumers have also suffered income loss and were likely to have a savings mindset as they prepared for the festive season. However, because they have no physical restrictions, they had more freedom to celebrate with others and to seek the right products and price points to suit their needs.
- Cautious Middle consumers have not yet been impacted financially and their celebrations were not limited by local physical restrictions. They were more likely to be cautious spenders and prioritized occasions and gift-giving with only those closest to them.
- Insulated but Restricted consumers have not been financially impacted by COVID-19 but their festivities were impacted by local physical restrictions. Smaller gatherings curtailed normal spending and encouraged self-indulgent celebrations. Financial flexibility drove these consumers to splurge in some ways to compensate for experiences that are no longer possible (e.g. travel).
- Insulated and Free consumers have also not been financially impacted by COVID-19. While their social interactions were not restricted, their typical celebrations were affected by those unable to be with them in 2020. These consumers spent the most freely and exhibited pre-COVID-19 holiday behavior.
New pandemic purchase behaviors
To help chart the behavior of these consumers, Nielsen has also identified four emerging patterns to help predict the drivers of pandemic purchase decisions in future. When applied to the context of the many upcoming holidays and year-end festivities, these reset patterns now highlight some important new behaviors that could emerge this season.
- Basket Reset - Holiday spending and gifting will be refined based on what and who are considered essential for each consumer. This will require retailers and manufacturers to redefine what’s festive and capitalize on the broadened assortment of what consumers might consider “giftable” this year. From a necessity that can no longer fit the budget, to a product that has been harder to get in stores this year, there will be big shifts in what defines a “gift”.
- Homebody Reset - Gatherings will be smaller and more intimate with many planned at the last minute. This might see the introduction of so-called ‘Single-Serve Celebrations’ that cater to needs for convenience, health, and budget consciousness by offering serving sizes and packages conducive to small or socially distanced gatherings.
- Rationale Reset - Consumers will spend more on themselves, prioritizing self-care this year. Retailers might then look to engage with empathy and recognize the trade-offs consumers will need to make. There is also scope for just-in-case solutions that cater to consumers who may be waiting to see whether they are able to physically celebrate a festive occasion or not.
- Affordability Reset - Online shopping will power more holiday consumer behaviors than ever before creating a need to convert impulsivity. With limited physical touchpoints with consumers, it’ll be vital to create spontaneity, even in an online environment.