DIpil Das
What’s the Story?
This report presents the results of Coresight Research’s latest weekly survey of US consumers, undertaken on January 4. The report includes analysis of new questions on shopper behaviors and the impacts of the coronavirus outbreak. We explore the trends we are seeing from week to week, following prior surveys on December 28, December 21, December 15, December 8, December 1, November 24, November 17, November 10, November 3, October 27, October 20, October 13, October 6, September 29, September 22, September 15, September 9, September 2, August 26, August 19, August 12, August 5, July 29, July 22, July 15, July 8, July 1, June 24, June 17, June 10, June 3, May 27, May 20, May 13, May 6, April 29, April 22, April 15, April 8, April 1, March 25 and March 17–18.What Shoppers Are Buying and Which Retailers They Are Buying From
For 2021, Coresight Research introduces new questions on what shoppers are buying and which retailers they are buying from. Week by week, we will track:- What product categories respondents have purchased in-store in the past two weeks.
- What product categories respondents have purchased online in the past two weeks.
- Which retailers respondents have bought any food products from in the past two weeks.
- Which retailers respondents have bought any nonfood products from in the past two weeks.
- In-store food shopping has seen an upward trend in recent weeks, reaching a new high of 76.3% this week, indicating that consumers are returning to physical grocery stores even though the overall avoidance rate of public places continued to be high, which we discuss later in this report. Since late November, online food/grocery purchasing has remained very steady, with around 30% of consumers buying food online in each two-week period. Our most recent US CPG Sales Tracker covering the four weeks ended November 29, 2020, recorded a further strengthening in online food and beverage sales growth, to 84% in the four weeks ended November 29. Our recent US Grocery E-Commerce report provides an outlook for 2021 and beyond.
- Clothing and footwear consistently over-indexes on online purchases compared to in-store. This week, online apparel purchases broadly leveled with last week, but were much lower than the highest level of 36.5% two weeks ago, as we have passed the holiday season peak. In-store apparel shopping has been gradually declining since mid-December, to 21.6% this week, although the level is still higher than the nadir on December 8. As the avoidance rate of retail locations remained high, we may see in-store apparel shopping continue to decrease.
- Books, movies, music and video games have been gaining momentum in recent weeks. This week, one-third had made a purchase in this category in the latest two-week period, the highest level we have ever seen. This could be a result of consumers spending time at home due to the recent surge in Covid-19 cases.
- Following the holiday season, we saw purchases for some discretionary categories, including beauty, electronics and home appliances drop to new lows this week for both online and offline channels. In-store beauty purchases saw the largest week-over-week decline, of eight percentage points this week.
Figure 1. All Respondents: What They Have Bought In-Store and Online in the Past Two Weeks (% of Respondents) [caption id="attachment_121547" align="aligncenter" width="725"]
Respondents could select multiple options Base: US respondents aged 18+
Source: Coresight Research [/caption] Retailers: Where Consumers Shopped Since December 21, we have asked consumers which retailers they bought from in the two-week period preceding the survey, for both food and nonfood products. For food purchases:
- As the largest retailer of groceries in the US, Walmart unsurprisingly enjoys a clear lead among all 12 retailers we provided as options, with 43.3% of respondents having bought food products from Walmart, almost double the proportion that had bought from Kroger banners (24.8%).
- Some 17.3% had bought food products from Amazon in this week’s survey, putting it ahead of other supermarkets and warehouse club operators, supported by the online grocery trend. In our weekly consumer survey on August 24, Amazon was one of the top retailers that consumers bought online groceries from. The company has made efforts to gain share in US food retail. To better compete with multichannel retailers, we may see Amazon push further into brick-and-mortar grocery formats.
- Amazon remains the most-shopped retailer in recent weeks, with a strong lead over Target and Walmart. This was likely supported by holiday season shopping. In our Holiday 2020 Survey, we found that Amazon was the top retailer for gift purchases. Another reason could be that online shopping behaviors remained high at over 70%, which we discuss later in this report, and Amazon is known for providing fast and free home delivery.
- Major dollar-store chains attract more shoppers than major warehouse clubs and department stores.
Figure 2. All Respondents: Which Retailers They Have Bought Food Products From (Left), and Which Retailers They Have Bought Nonfood Products From (Right) in the Past Two Weeks (% of Respondents) [caption id="attachment_121548" align="aligncenter" width="725"]
Respondents could select multiple options Base: US Internet users aged 18+
*Kroger banners include City Market, Fred Meyer, Harris Teeter, King Soopers, Kroger, Ralphs and Smith’s Food & Drug
**Ahold Delhaize banners include Food Lion, Giant, Hannaford and Stop & Shop
***TJX banners include HomeGoods, HomeSense. Marshalls, Sierra and T.J. Maxx
Source: Coresight Research [/caption]
What Shoppers Are Doing and Where They Are Going
Fewer Consumers Had Visited an Enclosed Shopping Center Complementing our questions about purchases in the past two weeks, each week, we ask consumers what activities they have done in the past two weeks. This week, the proportion of respondents slightly decreased for almost all of the options we provided for recent activities, although some of the week-over-week changes were within the margin of error. This week, meeting with friends or family continued to remain consumers’ top priority, while fewer had visited an enclosed shopping center or got a haircut.- Visits to open-air shopping centers remained relatively stable week over week, at 19%, while the proportion that had gone to an enclosed shopping centers fell by almost six percentage points to 13.0%. These low percentages are consistent with the increasing avoidance rate of such locations, which we discuss later in the report.
- The proportion of consumers that had got a haircut or grooming service decreased to one-fifth this week, from 24.3% last week and the peak of 26.4% two weeks ago.
- We have seen slight fluctuations in the proportion of consumers that had dined in a restaurant in recent weeks. This week, slightly fewer consumers had gone to a restaurant (one-quarter).
Figure 3. All Respondents: What Activities They Have Done in the Past Two Weeks (% of Respondents) [caption id="attachment_121549" align="aligncenter" width="725"]
Respondents could select multiple options Base: US respondents aged 18+
Source: Coresight Research [/caption] Slightly Fewer Consumers Expect to Dine in a Restaurant Each week, we also ask consumers what activities they expect to do in the next two weeks, with a set of options comparable to those for the last two weeks. This week, eight of the 12 options saw slight week-over-week declines, though most of the changes were within the margin of error. For the next two weeks, we saw fewer consumers reporting that they expect to dine in a restaurant and an increasing trend in consumers’ expectations on getting a haircut or grooming service:
- We have seen an upward trend in consumers’ expectations on getting a haircut, grooming or beauty services in recent weeks. Some 21.9% said they plan to do such activity in the next two weeks, up five percentage points from our survey carried out three weeks ago.
- We saw mixed results in expectations on visiting food-service locations. The proportion of respondents that expect to go to a restaurant fell from one-quarter to 21.9% this week, while slightly more consumers plan to go to a coffee shop.
- Aligned with the actual behavior we saw, more consumers stated that they would prefer to visit an open-air shopping center rather than an enclosed shopping center in the next two weeks. The proportion of consumers that plan to visit an enclosed shopping center has been decreasing in recent weeks, to a new low of 9.3% this week.
Figure 4. All Respondents: What Activities They Expect To Do in the Next Two Weeks (% of Respondents) [caption id="attachment_121550" align="aligncenter" width="725"]
Respondents could select multiple options Base: US respondents aged 18+
Source: Coresight Research [/caption] Over Eight in 10 Are Currently Avoiding Public Places Avoidance of public places remains high. In this week’s survey, the avoidance rate of any type of public area stood at 84.1%, versus 79.3% in last week’s survey and 80.3% in our survey undertaken two weeks ago. Avoidance of retail and food-service locations both reached record highs this week, as Covid-19 cases continued to surge in many parts of the US.
- The proportion of respondents that are currently avoiding shopping centers/malls increased by almost eight percentage points to 69.0% this week—the highest level we have ever seen.
- Avoidance of shops in general came at 56.3%, up nine percentage points from 47.6% last week. The record-high avoidance of both shopping centers/malls and shops in generaldovetail with the elevated e-commerce level, which we discuss later in the report.
- Food-service locations saw a week-over-week jump of eight percentage points, from 62.3% last week to seven in 10 this week, and again became the most-avoided public places.
Figure 5. All Respondents: Public Places That Respondents Are Currently Avoiding (% of Respondents) [caption id="attachment_121551" align="aligncenter" width="725"]
Respondents could select multiple options Base: US respondents aged 18+
Source: Coresight Research [/caption]
Reviewing Trend Data in Current Purchasing Behavior
What Consumers Are Currently Buying More Of and Less Of We have seen almost equal proportions in consumers currently buying more of any type of product and those buying less of any type of product due to the coronavirus this week. Some 50.8% are buying more of any product than pre-crisis, and 49.7% are currently buying less of any product due to the pandemic.- Buying more in any category and buying less in any category were not mutually exclusive options, so respondents could answer yes to both.
- The ratio for clothing and footwear stood at 10.9, compared to 5.2 last week and 7.0 two weeks ago. During the holiday season, this ratio remained at around 2.0.
- The ratio for beauty came at 8.5, versus 5.8 last week.
- The ratio for electronics went up to 2.6, from 1.5 last week.
- The ratio for the home category slid to 2.1, from 3.8 last week.
Figure 6. All Respondents: What They Are Currently Buying More/Less Of Due to the Coronavirus Outbreak (% of Respondents) [caption id="attachment_121552" align="aligncenter" width="725"]
Respondents could select multiple options Base: US respondents aged 18+
Source: Coresight Research [/caption]
Figure 7. All Respondents: Buying More/Less of Selected Categories (% of Respondents) [caption id="attachment_121553" align="aligncenter" width="725"]
Base: US respondents aged 18+ Source: Coresight Research [/caption] Over Seven in 10 Are Switching Spending Online The proportion of consumers buying more online than they used to returned to an elevated level of 72.4% this week after dropping below 70% in our two previous surveys. This level is roughly in line with what we saw during the holiday season, reflecting the sustained consumer behavior of online shopping heading into 2021.
Figure 8. All Respondents: Whether They Are Currently Buying More Online than They Used To (% of Respondents) [caption id="attachment_121554" align="aligncenter" width="725"]
Base: US respondents aged 18+ Source: Coresight Research [/caption] What Consumers Are Currently Buying More Of Online Looking at specific categories, almost all of the 13 options we provided saw week-over-week increases in consumers buying more online than pre-crisis, although most of the changes were within the margin of error. Clothing and footwear became the most-purchased products category for online shopping for the first time: Some 33.7% are buying more apparel online—the highest level we have ever seen. Online purchases of books, movies and music came in second place, also reaching a new high of 32.1%. This is aligned with the ranking of product categories that consumers had purchased online in the past two weeks, discussed earlier in the report. Among other discretionary categories, some 18.0% are currently buying more electronics online than pre-crisis, followed by beauty (14.8%) and toys and games (13.7%).
Figure 9. All Respondents: Categories That They Are Currently Purchasing Online More than They Used To (% of Respondents) [caption id="attachment_121555" align="aligncenter" width="725"]
Respondents could select multiple options Base: US respondents aged 18+
Source: Coresight Research [/caption]
What We Think
This week, we saw the following from our newly introduced tracker questions and recurring weekly questions:- Apparel: In recent weeks, we have seen a gradual slowdown in apparel purchases. The ratio of buying less to more than pre-crisis for apparel jumped to a new high this week. In terms of channels, online purchases of apparel consistently outperform compared to in-store purchases. Some 30.5% had bought clothing, footwear or fashion accessories online, versus 21.6% that had done so in-store in the past two weeks. In a separate survey question, apparel ranked as the top category that consumers are currently buying more of online than pre-crisis.
- Online Grocery: Online grocery has shown great resilience and the trend looks to be here to stay. Food and beverages came in third in terms of online purchase ranking. We also saw a consistent proportion of roughly 30% of respondents that reported having bought groceries online in the latest two-week period. Our latest US Grocery E-commerce report discusses, we expect that total US food and beverage e-commerce sales grew to $55.5 billion in 2020, up 82% year over year.
- E-Commerce: Online shopping shows no sign of slowing down. This week, the proportion of consumers buying more products online than pre-crisis returned to an elevated level of 72.4%, as avoidance rates in shopping centers and shops in general continued to climb. Looking at metrics since April, when we started asking this question, we saw an average of almost 70% of consumers buying more online than pre-crisis in the period from April to December 2020. Our previous survey report also indicates that “shop more online, less in stores” is the most likely behavior that consumers expect to retain in the long term. In our 2021 Retail and Technology Outlook, we estimate that US e-commerce sales surged by around 34.7% in 2020 and we discuss our expectation for total online sales growth to moderate to single digits in 2021.