Nielsen Predicts Consumer Holiday Spending Behavior in ‘New Normal’
Ahead of the holiday season, Nielsen, the global marketing research firm, recently predicted the types of behaviors consumers will exhibit due to the “new normal” set by the COVID-19 pandemic. With considerations of varying financial and physical restrictions consumers will face this year, Nielsen said that spending behaviors will shift according to consumer priorities this holiday season.
According to Nielsen five different consumer types of behavior will emerge for the 2020 holiday season:
- Constrained and Restricted consumers are those who have suffered financial loss due to the COVID-19 pandemic and face limited travel opportunities to shop because of local health guidelines. As a result, these types of consumers will likely spend less money and have a lesser chance to shop for the best holiday deals.
- Constrained but Free consumers are the types of consumers who have suffered financial loss but do not have physical limitations in their local area, thereby allowing them to celebrate the holiday season with others and shop comparatively for their holiday needs.
- Cautious Middle consumers are those who have not been impacted by severe financial or physical restrictions but may be fearful of the near future as the pandemic continues into the new year. These consumers will likely be cautious spenders and only give gifts to those in their closest inner circle.
- Insulated but Restricted consumers do not have financial worry on their minds but may be mindful of physical travel restrictions, resulting in small gatherings and self-indulgent spending as opposed to gifting for others.
- Insulated and Free consumers will likely exhibit pre-pandemic behaviors and spend more freely than other types of consumers. These consumers may compensate for luxuries previously not available to them earlier this year and they may be inclined to help those less fortunate in their lives to celebrate the holidays.
According to Nielsen, these five consumers groups will “approach the reset of their holiday shopping behavior uniquely” and as a result recommended that companies should “align their plans with the new circumstances consumers find themselves in.”
As a start, Nielsen stated that companies should rethink their definition of what products could be considered “giftable” as consumers redefine who and what will be essential gift-giving to them.
“To meet this shift, look at the broadened assortment of what consumers might consider ‘giftable’ as an opportunity rather than a limitation,” said Nielsen.
“The door is open for non-festive categories to perform strongly this season. From a necessity that can no longer fit the budget, to a product that has been harder to get in stores this year, the definition of a ‘gift’ will look very different this year,” added Nielsen.
For ideas of what could now be considered as gifts, Nielsen examined how holiday gift baskets will shift to accommodate “new normal” everyday items and those that are not.
Gift baskets for those seeking healthy alternatives to processed food will likely contain fresh food items such as meat, seafood, or those from a bakery. Constrained consumers could be attracted to this gift-giving alternative since they may not otherwise be able to afford fresh foods due to inflated pricing.
Other gift baskets that consumers might consider include products of “new normal” everyday use such as hand sanitizer, thermometers or household maintenance masks for personal health protection. Or, consumers may opt to give premium versions of everyday items such as coffee for the holidays.
Besides rethinking the definition of what could be considered a gift, Nielsen also suggested that companies should reconsider how they help consumers in their shifting gift giving needs by providing options of personalized cards or product vouchers for consumers when they shop online.
Nielsen emphasized that these kinds of offerings could help companies differentiate themselves from competitors this holiday season.
In terms of other needs, Nielsen suggests that companies should go the extra mile in educating consumers on how their products can better serve them this year.
According to Lauren Fernandes, director of Nielsen Intelligence Unit, “Showing how your product or service can contribute to a celebration, even if it’s focused on the self or a single household, can help busy consumers make the trade-offs they need to.”
Fernandes continued, “Many consumers are waiting until the last minute to see whether or not they will be able to celebrate with family. Offerings need to speak to things consumers can buy ahead of time that won’t be a waste of money if plans change unexpectedly.”
In The News
BALTIMORE (AP) — President Joe Biden plans to take executive action Friday to provide a stopgap measure of financial relief to millions of Americans while Congress begins to consider his much larger $1.9 trillion package to help those affected by the coronavirus pandemic. The two executive orders that Biden... Read More
WASHINGTON — The number of unemployment claims filed last week fell to 900,000, a number that remains historically high and suggests the economy still has a long way to go before it fully recovers from the coronavirus pandemic. The Labor Department also reported that 5.1 million... Read More
WASHINGTON — On the first full day of his term, President Joe Biden announced his plan to combat the novel coronavirus pandemic, entitled “National Strategy for the COVID-19 Response and Pandemic Preparedness.” Biden’s strategy includes issuing 10 executive orders to mitigate the virus. In addition to... Read More
BALTIMORE (AP) — When Joe Biden entered the White House as vice president, the economy was cratering. Job losses were mounting. Stocks were crashing. Millions of Americans were in the early stages of losing their homes to foreclosure as the housing bubble burst. Biden returns to... Read More
The Brooking Institution’s How We Rise project last week presented the results from its study on the role of social networks and geography in economic mobility, offering data on this important factor for those attempting to understand or improve opportunities for social advancement in the US. ... Read More
New research suggests that Pfizer’s COVID-19 vaccine can protect against a mutation found in two easier-to-spread variants of the coronavirus that erupted in Britain and South Africa. Those variants are causing global concern. They carry multiple mutations but share one in common that's believed to be... Read More