Retail Channels
06 June 2023
Father's Day spending expected to reach $23B, paced by ecommerce
Father's Day is expected to break records, according to NRF and Prosper Insights.
Photo by Tim Mossholder on Unsplash
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Consumer spending is expected to break records this Father’s Day, according to new data.
A forecast from the National Retail Federation and Prosper Insights & Analytics shows the following:
Father’s Day spending is expected to total $22.9 billion.
That would be an increase above the $20 billion spent in 2022, and would break the record of $20.1 billion that was recorded in 2021.
Three-quarters of consumers are planning to celebrate Father’s Day this year.
Average spending per person is expected to reach $196.23. That’s up from $171.79 last year and above the record of $174.10 spent in 2021.
“Father’s Day remains a momentous occasion for Americans to honor the important men in their lives,” said NRF President and CEO Matthew Shay, in a statement. “Consumers plan to celebrate the holiday in a big way this year, and retailers are ready to help make it special.”
Here are a few more key data points from the forecast:
Ecommerce for dad: Online is the biggest shopping destination for Father’s Day gifts, as 43% of consumers are turning to ecommerce. That’s up from 40% last year. Meanwhile, 38% will shop at department stores, up from 34% in 2022.
In the box: The survey showed 42% of consumers are interested in giving a subscription box as a gift. That’s up from 37% last year, and amounts to the highest interest since NRF began tracking the gift option in 2019.
Top demographic: People in the 35-44 age group are the “big spenders,” said Prosper Executive Vice President of Strategy Phil Rist. They’re expected to outspend other consumers by $100. The 45-54 age group is expected to see the biggest increase, with $57.04 spent.
Top gifts include clothing (55% plan to buy), a special outing like dinner or brunch (52%), gift cards (48%) and personal care items (32%).
The gift of time together: Nearly one-third plan to give a gift of experience, such as tickets to a sporting event or concert. That’s up 25% from last year, and the highest share since NRF began asking the question in 2016.
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Marketing
09 June 2023
'There's a lot of ways to frame value'
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
Photo by Kelly Common on Unsplash
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.
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