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Will Online Shoppers “Stay or Will They Go Now” As Stores Come Back?

In this Insight Flash, we use CE Vision to:
  • Inform marketing decisions as stores reopen
  • Discover which segments of retail benefited most from new online spend
  • Adjust marketing programs for online vs. offline based on retention (view by geography to set cadence by state; view by age to target marketing for the right demographics)

According to the commentary of many retailers, the COVID-19 pandemic has given rise to a brave new online world, and shoppers may never go back to old behaviors.  Yet, other retailers are sticking with their in-store strategies, and seeing shoppers come back in droves eager to get back to “normal.”  CE Vision helps users navigate which side of these trends their own shoppers fall out on, and how to adjust their marketing strategies to match the channels their customers prefer.  CE Vision’s unique ability to separate online from offline shoppers along with the functionality to build cohorts based on any shopping behavior allows not only examination of which businesses are seeing new online shoppers, but also whether those shoppers are staying online as stores become an option again and which shoppers are staying and which are going by demographic group.  Although the analysis below focuses on high-level industry trends, users can perform the same analysis at a brand level to fine tune their marketing plans over the coming weeks and months.

Interestingly, Specialty Retail saw the largest percent of new online shoppers as a percent of total online shoppers in April 2020 at 38.0%.  Gifting became important as families and friends were separated, with online the main channel for sending items to loved ones.  Multi-Outlet + Convenience, our industry classification that includes grocery, mass, drug, dollar, and convenience stores, showed the second-highest new online shopper percentage at 21.5% as unavoidable grocery trips unavoidably shifted online.  Apparel, Accessories, and Footwear saw some new online customer penetration at 14.9%.  Hardlines saw much smaller new online customer penetration at 4.3%.  By following these industry trends and seeing how they applied to their own brands, marketing departments could have decided how much of their spend to shift to e-commerce efforts during this period.

New Shopper %

April Online Shoppers % New to Industry Online Chart
Note:  % of each industry’s online shoppers in April 2020 who had not shopped industry online in the prior 365 days.
*MULO + Convenience is the industry term that stands for Multi-Outlet + Convenience

However, isolating the customers who were new online shoppers for each industry, the question in May became one of how much of those shoppers’ spend was retained?  The best way to see whether those shoppers continued to go online as states reopened is to see what percentage of new online shopper spend for each industry in April stayed online in May.  The trends vary by industry.  For online consumables and grocery items, the trend is clearly that as states reopen, retention gets lower as shoppers begin to brave stores.  Georgia, one of the first states to reopen, saw only 34.7% spend retention of its new online Multi-Outlet + Convenience shoppers in May, while New York, one of the last states to reopen, saw 45.7% retention.  Hardlines and Apparel, Accessories, and Footwear actually saw higher retention in Georgia, however.  Some of this may be due to increased purchases necessary for going back to work, so it will be interesting to see how this retention progresses in the coming months.  Specialty Retail saw relatively consistent online retention trends across states, and retention was also the lowest of the tracked industries.  Good marketers can dig into these retention trends by industry and for their own brands as states reopen in order to tailor online vs. in-store efforts by geography and to try to stay ahead of customer preferences in the states later to reopen by closely following what happened in the states that reopened earlier.

Shopper Retention by State

State- April New Online Shopper Spend % Retained Online in May Chart
Note:  For each industry’s online shoppers in April 2020 who had not shopped industry online in the prior year, what % of April spend was May spend.
*MULO + Convenience is the industry term that stands for Multi-Outlet + Convenience

Of course, many marketers will also tailor their campaigns to certain demographics.  Therefore, it is important to consider not only where online shoppers are being retained, but who is being retained.  CE Vision offers nine different demographic variables for this analysis, with age perhaps one of the most interesting when it comes to online trends.  Again, trends differ dramatically by industry.  Older shoppers were much more likely to still be spending dollars online for Multi-Outlet + Convenience.  This may be due to a stronger reticence to leave the house even after stay-at-home orders are lifted, but it could also be that they were introduced to a new convenience that they are going to continue to utilize even after the pandemic has passed.  Hardlines seemed to retain more online spend for middle age groups 25-44.  Meanwhile, younger shoppers were where the highest spend retention was in Apparel, Accessories, and Footwear and Specialty Retail.  Some of this stickiness may be due to the presence of more niche brands targeted to these audiences in these categories.  Marketers would be able to use this information for industries, subindustries, and brands to target campaigns for online vs. in-store customers to the right demographic groups.

Shopper Retention by Age

Age April New Online Shopper Spend % Retained Online in May Chart
Note:  For each industry’s online shoppers in April 2020 who had not shopped industry online in the prior year, what % of April spend was May spend.