There’s no doubt this Christmas is going to be a very different affair to previous years. As we enter December, there’s a distinct somberness to 2020 festivities. According to research we ran in October, half of Brits (46%) said they are not looking forward to Christmas as much as last year, and this was before the second lockdown and the subsequent tier system.
What’s undeniable, is that consumer habits have changed beyond recognition. Whereas the weeks leading up to Christmas were a time pubs and restaurants would typically be booked months in advance to accommodate festive get-togethers, this year many establishments are not even open for business and those that are, won’t be entertaining groups larger than six.
Social arrangements are almost entirely prohibited for people in tier 3 and even those in tiers 1 and 2 are making fewer social arrangements, with three quarters (73%) concerned about socialising due to the associated risks, while a third (33%) say their family and friends are not keen to socialise because of the risk of catching the virus.
The upshot of this is that people will be eating and drinking at home a significant amount more than usual throughout the Christmas period. This represents a major opportunity for FMCG brands but it’s one that needs to be navigated with sensitivity and reflective of the changes to grocery shopping habits.
So, how can FMCG brands best prepare for Christmas 2020 and engage shoppers in a meaningful way?
Hit Brits planning store visits
Our monitoring of supermarket shopping habits between March and October this year showed that although there were changes to the way people shopped – namely that consumers made fewer weekly shopping trips during the first lockdown – spend has remained largely consistent by household, and by October, grocery trip frequency had returned to pre-Covid levels.
Importantly, over three-quarters of Brits (78%) also choose to visit physical supermarkets rather than buy online and this number hasn’t dipped below 75% throughout the pandemic. When asked specifically about their Christmas grocery shop, 64% of consumers said they plan to do it in-store, signalling that FMCG brands should be focusing on reaching consumers in physical stores rather than online.
What’s more, nearly all (91%) of UK consumers say they pre-plan before they go to the supermarket by writing a shopping list. FMCG brands therefore have a unique opportunity to impact shopping planning by making shoppers aware of offers and discounts before they visit a store through a dedicated supermarket shopping app or similar tool.
Value for money
Covid-19 has taken its toll on the UK, with half of Brits (48%) saying they have less disposable income this year than last. Inevitably, this change in financial circumstances combined with the general malaise towards Christmas 2020, mean that most shoppers (52%) plan to reduce spend on their Christmas grocery shop, and 83% are looking for more discounts and ways to save money versus last year.
It’s key that brands demonstrate awareness of the economic impact of Covid and offer consumers a strong value proposition through their products. In particular, those brands that ‘give back’ to shoppers during this difficult time through special offers and money off, will build greater brand loyalty and ultimately drive future success.
Reflecting consumer preference
From speaking to consumers, one thing that stands out is that one third (30%) of shoppers intend to make changes to the grocery products they purchase this Christmas. Over half (51%) plan to be healthier, while 39% intend to buy more local produce, 34% products with less packaging, 29% less alcohol, and 14% less meat, fish and dairy.
This shows that many consumers have health and environmental concerns, which it’s important brands aim to reflect in their product offerings. Where Christmas was once a time of indulgence, this year is set to be different and brands that listen to what consumers want and meet their requirements in these areas, will set themselves up for greater gains.
Rethinking marketing strategies
In previous years, it’s not been unusual for brands to start advertising for Christmas as early as September but this year it’s a very different story. Almost two thirds (63%) of FMCG brands have had their marketing budgets cut or frozen and many activities that brand marketers previously dedicated a significant proportion of budgets too – such as physical sampling – haven’t been possible since the pandemic hit. Covid has required FMCG brands to rethink strategies and we’re seeing many savvy brands seeking out alternatives to physical sampling such as mobile promotion platforms.
From a consumer perspective, over half of Brits (54%) say they have seen less Christmas advertising this year compared to previous years, which is unsurprising. But it’s not that brands shouldn’t be utilising advertising and marketing, it just needs to be done in a respectful way, as 64% of consumers said they think adverts should be sensitive and reflect the current situation.
2020 has proved a challenging year for just about every industry and FMCG is no exception. The almost overnight change in consumer grocery shopping habits means brands have had to respond quickly to evolving demand. Yet the fact that supermarket shopping trips are back to pre-Covid levels means there is a very real opportunity for FMCG brands to finish the year on a high, and given Brits will be spending significantly more time at home this festive period than others, FMCG brands have a greater opportunity to convert festive consumers than in previous years.
However, the key to success throughout the festive season is dependent on brands listening to consumers and reflecting what they want in their offerings. Value for money, healthier products, reduced environmental impact, and demonstrating awareness and sensitivity towards the situation are all crucial. But to really drive sales, brands need to be reaching consumers when they’re most receptive – at the point they’re planning their supermarket shopping trips. One of the best ways to do this is by offering consumers the discounts and offers they seek through cashback apps and similar tools, thus ensuring they fix their position firmly on the public’s shopping lists.
