Late last month, we wrote about gearing up for the forthcoming holiday shopping season. While doing so, it is imperative to gauge consumer sentiment in 2020.
Even in September 2019, consumer confidence dropped. Nonetheless, holiday shopping was strong in 2019. Things don’t look so rosy this year.
Holiday Shopping: What Is Consumer Sentiment in 2020
Due to the COVID-19 pandemic and the uncertain job market, millions of consumers are hesitant about their holiday spending.
Shoppers have been primarily driven to make purchases based on health and safety concerns throughout the pandemic. However, a second layer of consumption behavior has emerged from those experiencing (and anticipating) financial restraint. U.S. unemployment has fallen from its peak of 14.7% in April. But consumers still feel weary As a result, the U.S. Consumer Confidence Index plummeted by 21 points from Q1 to Q2 of 2020. The impact of underlying financial risks is not equal among consumer groups. And it’s important for retailers and brands to understand where consumers will head in terms of how they make purchases and the strategy behind them.
Of those who participated in Nielsen’s COVID-19 Shopper Survey in the first week of July 2020 in the U.S., 29% said their financial condition worsened from the previous year, forcing them to adapt their habits. Joining them in switching gears are the cautious middle consumers who plan for an uncertain future that may include an impact to their income, though it hasn’t happened yet.
These segments develop new shopping strategies to make each dollar stretch further by: Seeking out discounts and promotions. Shopping at stores with lower prices. Cutting back on luxuries. Increasing reliance on E-commerce. Opting for non-perishable and frozen foods over fresh foods. And substantially reducing overall spending.
Look at these two Nielsen charts.