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Don’t waste another dime on bloated channel reporting and vanity metrics.
Don’t waste another dime on bloated channel reporting and vanity metrics.
Pitney Bowes' BOXpoll looks at how consumer habits are shifting heading into a summer of sales.
Welcome to Data File. In this weekly feature, The Current shares key findings shaping the ecommerce landscape. At The Current, we comb industry, analyst and economic sources for the data that matters to ecommerce professionals, and include it throughout our work. This feature is one of the ways we’re sharing what we find.
For consumers, it’s a summer of swings.
Forty-year-high inflation is pushing prices higher. The Fed moved to raise interest rates, making borrowing money harder across the economy. At the same time, retailers are set for big markdowns amid an influx of inventory.
With COVID-19 restrictions loosening, the retailers say the discounts come as a result of inventory ordered months ago in a supply chain crisis that doesn’t match with current demand for products that align with going out, rather than staying home. Most of the markdowns are coming in areas that were flying high in the pandemic. But when price pressure abounds, a sale is a sale. Track what’s being offered closely and there could be deals to be had.
“This summer will present both new challenges and new opportunities for brands,” said Vijay Ramachandran, VP of market strategy for global ecommerce at Pitney Bowes, in a statement. “Overstocks and markdowns will impact profitability, but also create new openings to sell as a large portion of consumers seek out deals—further aided by the return of Prime Day and other mid-year promotions. At the same time, our survey found a growing number of consumers cutting back on retail spending altogether as they react to record inflation and gas prices, and rising interest rates.”
A new survey from shipping company PitneyBowes looks at how consumers are planning spending as more markdowns on casual apparel, home appliances and furniture are heading their way. The results of the latest BOXpoll show that it’s set to bring a shift toward ecommerce.
Here are a few of the key data points:
It’s a time of massive swings. As Ramachandran put it: “2020 saw unprecedented capacity constraints among ecommerce logistics networks. 2021 witnessed historic disruptions in the manufacturing supply chain. 2022 is shaping up to be the year of oversupply and price volatility.”
Consumers are changing habits along with it. According to the poll, 56% of respondents said their motivations for buying online have changed since the peak pandemic lockdown phase. The number one reason for shopping online was saving a trip to the store. That was a top choice of 43% of respondents. Meanwhile, COVID concerns are top-of-mind for 15% of consumers.
This makes delivery a key component of ecommerce, and speed is key. The survey showed the following:
It gets at another side of the ecommerce equation. As online shopping becomes more habitual, there’s one emerging dynamic that is tougher to quantify, but no less impactful: Ramachandran said many consumers are attracted by the “joy” of online shopping, and that will only continue to grow. It could even overtake convenience as a prime motivator.
It’s a note worth taking when designing ecommerce experiences. Remember how factors like a standout social presence and unboxing helped DTC rise. Going fast for consumers is important, but it’s important to remember that they also want to be delighted along the way.
From Pitney Bowes:
The BOXpoll consumer survey by Pitney Bowes is a weekly consumer survey on current events, culture and ecommerce logistics. Morning Consult conducts weekly polls on behalf of Pitney Bowes among a national sample of more than 2,000 online shoppers. The interviews were conducted online, and the data were weighted to approximate a target sample of adults based on age, educational attainment, gender, race, and region. Results from the full survey have a margin of error of +/- 2 percentage points.
The CPG is boosting advertising spend in 2023.
During tough times, people turn to sweet and salty snacks.
That idea was reiterated by Hershey on Thursday, as the CPG reported earnings that were headlined by a 16% increase in net sales for the year, and an 18.%% increase in adjusted earnings per share.
While Hershey benefitted from stay-at-home trends during the pandemic, CEO Michele Buck said people continued to turn to the company’s candy as the economic picture grew cloudier in 2022. That’s because chocolate and salty snacks are two of the top three resilient treats that consumers aren’t willing to skip, Buck said. It confirms recent findings by Mondelez that people are continuing to make room in their budget for snacks even as prices go up.
“Chocolate moments are such a heavily integrated part of consumers’ weekly routines, from rewarding moments to stress relief to self-care, and everything in between, that they indicate they would rather cut back on other expenses to make room for chocolate because they love it so much and it’s affordable,” Buck told analysts. “Salty snacks are another regular companion that consumers are hard-pressed to cut back out of their grocery budget. Not only are they affordable compared to other expenses, but they are key parts of both parents’ and kids’ daily routines.”
One reason for resilience is that chocolate and other sweets tend to be sought out in good times and bad. Buck acknowledged that this was essentially two opposing parts of the consumer brain.
“One is when they are incredibly happy and it's a treat time, and they want to treat themselves and the other is when there are downtimes, and they want a bright spot,” she said. “But they do view these categories and especially chocolate as a part of emotional wellness – what it does and how it makes them feel. “
With demand remaining in place and new capacity constraints coming online that will allow it to make more products to ensure it keeps up, Hershey is aiming to double down despite the economy. It expects to increase advertising levels in the double-digits this year, with a particular focus on Reese’s and Hershey’s, as well as gummies and better-for-you. It also looking to add fuel to salty snacks brands, as Skinny Pop, Pirate’s Booty and Dot’s have nearly doubled in recent years.
“People are connected to our brands. And during the tough times, we know that that connectivity leads to them continuing to buy,” Buck said. “So yes, it is important during an inflationary time.”