Among the hottest-selling items on Amazon Prime Day this year was a propane patio heater marked down by 25%. But the price likely didn’t need to be reduced. Sales of patio heaters has spiked nearly 100% since the spring.
The surge in demand for particular “nesting” products, from patio heaters to wine coolers, not only reflects the activities Americans have adapted during the pandemic, it hints at the next stage in anxiety-induced shopping – accelerated, or “forward buying."
Forward buying occurs when shoppers feel an urgency to purchase goods they may only perceive they might need. In doing so, they ease the fear that these goods won’t be available in a week. Think toilet paper and early-pandemic hoarding behavior.
Now, consumers are forward buying for lifestyle changes predicted back in the spring, and this is leading to shortages of goods from home podcasting equipment (for e-learning) to gym equipment to lumber (for DIY projects). The anxiety behavior that first appeared in the form of hoarding is still strong; it’s just transitioning with the prolonged effects of the pandemic.
The effect to retailers, however, has not changed much. They must continue to manage the customer experience and balance their supply chains. Delivering on that experience, however, requires understanding what is happening inside the shopper’s head at this advanced stage of an unprecedented time.
People Seek Sanctuary, And That’s Causing Panic-Buying
Patio heaters are a good case in point. As shoppers try to retrofit “normal” life events into the next season of pandemic-enforced solitude – winter and the holidays – they fret about the availability of the goods they’ll need to keep stress at bay.
Here are four insights into this anxious-spending mentality that retailers should consider in their merchandising and marketing strategies, now.
Anxiety causes “herd” buying. When anxious, people tend to replicate the behaviors of others. This may simply be a decision-making shortcut that reduces stress, according to a report in Science Daily. When there are only a few products left on the shelf, shoppers are assured that the product is good, but they also worry it will soon be gone. This contributes to the kind of FOMO panic that depleted store shelves of toilet paper and disinfectants.
Of course retailers can try to limit the units sold per customer when products are being depleted, but they also can play the bigger role of customer advocate and use their loyalty programs and technology to add a new service dimension. Why not track member preferences, or allow customers to flag certain products so they can be notified of availability, sales or even when stocks are running low? The e-commerce platform Shopify, which sells a variety of loyalty programs, offers a “back-in-stock” customer alert feature to its clients, which include Walmart, Facebook Shops and Steve Madden.
Panic induces the need to know products are “reserved.” In addition to availability, a key concern among anxious shoppers is that the products they order will not reach them in time. This concern is growing more acute as the holidays barrel toward us. If shoppers are afforded a variety of options for delivery, online and in-store, they will feel more secure. Features such as curbside pickup, same-day delivery and in-store app tools that show product availability are becoming expected.
Walmart is combining many of these features in its new, digitally enabled store format, which encourages shoppers to shop with the Walmart app and to use self-scan kiosks or contactless checkout, which saves time. Walmart has also recently launched Walmart +, its answer to Amazon Prime, which promises members free delivery, as fast as the same-day (Walmart already offered next-day and two-day delivery).
Lack of control translates to early buying. The pandemic has pushed many aspects of people’s lives out of their hands, so they control what they can with verve. This includes buying certain goods they think they may need in the future, rather than waiting to when the actual need arrives. Doing so eliminates “regret worry” – that they will live to regret notacquiring something, according to a report from the Yale School of Management.
Outdoor winter active wear is a good example of this fear – REI began selling out of staple cold-weather gear during its Labor Day sale. Early holiday shopping is another apt example. Target TGT 0.0%, sensing shopper antsy-ness, began offering “Black Friday” deals in mid-October, both to compete with Prime Day and to smooth out the holiday shopping season and prevent its supply chain from becoming overwhelmed.
Shoppers are more open to change and trying new things. Consumers facing job insecurity and economic pressure due to the pandemic have been changing their shopping behaviors, scrutinizing spending choices and seeking out goods that promise better value. According to McKinsey & Co., 36% consumers tried new brands during the pandemic. Of them, 73% intend to continue to do so. This is an opportunity for retailers and product manufacturers to entice shoppers to try new brands and categories that serve needs cropping up because of the pandemic. The new brand Neverland, which sells plants and seeds, was created expressly to fill the demand for easy-to-grow herbs and vegetables in urban living spaces.
Shoppers Just Want To Be Happy
Consider this a fifth insight. After seven months of relative reclusiveness, people are in mourning for the lifestyles they had to suddenly let go. In addition to ensuring the products shoppers want are in stock, retailers would be well served to find ways to make comfort available, too, through displays of empathy, kindness and one-to-one interactions (even at a distance). Forward buying is a manifestation of fear, and for many people, being told everything will be OK could be as warming as a patio heater.
After all, the act of paying it forward never runs out of stock.
Bryan Pearson is a Featured Contributor to The Wise Marketer and currently serves as a director and strategic advisor to a number of loyalty-related organizations. He is the former CEO of LoyaltyOne.