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Holiday season to see rise in online shopping and impulse buying: Nielsen

BY Gabriella Lacombe

PUBLISHED Nov 9, 2020

The latest Nielsen holiday shopping report predicts that consumers will be doing more online shopping, shopping for themselves and impulse buying this holiday season. 

The report commenced by categorizing this season's shoppers into five groups: constrained and restricted, or those who have suffered an income loss as a result of the Covid-19 pandemic, will have less money to spend and will be physically limited by local travel restrictions; constrained but free, or those who have also suffered an income loss and have less to spend, but who have no physical restrictions; cautious middle, or those who have not yet been impacted financially and will not have their celebrations limited by local physical restrictions, but who are worried about the future and will spend cautiously; insulated but restricted, or those who have not been financially impacted by the pandemic, but whose festivities will be impacted by local physical restrictions; and insulated and free, or those who have not been financially impacted by the pandemic and whose social interactions may not be restricted. 

Not surprisingly, online shopping is expected to be the main shopping avenue for every group, as the pandemic keeps most shoppers indoors and away from the season's typical large shopping crowds.  

Constrained consumers will be the most selective, the report said, using online shopping to compare for best prices. Insulated consumers, on the other hand, "will rely on online sales events to provide maximized value for luxurious and indulgent festive purchases," the report said, creating a prime environment for impulse buys. 

"With limited physical touchpoints with consumers, it’s important to create spontaneity, even in an online environment," the report said. "Whether it’s encouraging giving back to those less fortunate on the checkout page, or offering the addition of free samples to entice secondary purchases, there are many ways to trigger impulse purchases online."

Given the different priorities and financial abilities of each of Nielsen's five shopping groups, holiday plans are likely to be more unpredictable and last-minute than in previous years. As a result, products that can be used or made useful beyond any specific holiday plans are expected to perform well this season. 

"Many consumers are waiting until the last minute to see whether or not they will be able to celebrate with family," said Lauren Fernandes, director of Nielsen Intelligence Unit. "Offerings need to speak to things consumers can buy ahead of time that won’t be a waste of money if plans change unexpectedly.” 

Operating with altered holiday plans and budgets, typical holiday traditions are also experiencing change, the report claims, and consumers are expected to spend more on themselves this year. In response to this change, Nielsen executives say companies would be smart to position their products as uniquely festive during "the new normal." 

“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 said. 

The report marks the latest from Nielsen as the company works to predict the longterm impact of Covid-19 on consumer behaviors. 

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