Consumers Downsize Celebrations

Click-and-collect, curbside pickup and delivery are in demand.

November 24, 2020

ALEXANDRIA, Va.—This year’s Thanksgiving festivities will feel drastically different, depending on location, generation and the financial impact of the pandemic. Yet from online shopping to price hikes, consumers share commonalities in confronting a Thanksgiving unlike any other, according to Nielsen’s Holiday Planning Consumer Survey.

Americans are almost perfectly split on whether they will change or bypass traditional Thanksgiving celebrations this year or carry on as in the past. Travel constraints and local health regulations will cause most people to gather in smaller groups. In fact, 70% of survey respondents said they’re planning a Thanksgiving gathering with fewer than six people, and 39% plan to prepare a meal at home for just household members.

Retailers can take solace in the fact that smaller gatherings won’t necessarily equate to less spend this Thanksgiving, but they will result in a more evenly distributed spend among consumers. Pandemic-conscious shoppers will look toward the omnichannel landscape to meet their needs, reinforcing the importance of click-and-collect, home delivery and curbside pickup.

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Plenty of shoppers plan to celebrate Thanksgiving as usual, and most will maintain or increase their overall spend. Those most likely to carry out their usual festivities include consumers living in rural areas, households with children and shoppers in the Gen Y and millennial generations.

To make up for lost entertainment and disrupted travel, this group will look to supplement with small luxuries like premium meal delivery options, imported spirits and wines and large package formats meant for entertaining guests.

Thanksgiving week historically yields higher CPG sales in brick-and-mortar stores than any other week except for Christmas week. But in 2020, expect purchases to be more evenly distributed across the omnichannel landscape. While Americans will increase their in-store spending relative to normal weeks, COVID-19 reduced the barrier to online entry for 18 million first-time online CPG buyers in the U.S. since March. Grocery e-commerce became wildly popular this year, with household penetration increasing by 68%, compared with pre-COVID-19 levels, according to Nielsen’s Omnichannel Shopper Fundamentals Survey.

This Thanksgiving, half of consumers have indicated that they will be shopping online to some extent for seasonal food and household items. Retailers must prepare their online and offline assortments to accommodate for out-of-stocks, convert impulsivity into additional dollars and allow for speedy delivery and pick-up.

Household income is important in determining how consumers celebrate. Consumers with income levels of less than $50,000 have exacerbated the movement toward smaller or bypassed festivities. Their purchasing power has significantly decreased due to loss of income and higher prices for common household and grocery items. Meanwhile, low-income shoppers who plan to celebrate have indicated that they will spend less than the average consumer both in-store and online.

Consumers looking to save are having a hard time staying within their budgets. In the month of October, they paid +3.7% more than they did last year for popular seasonal items correlated with Thanksgiving. With less financial flexibility, cost-conscious shoppers will be motivated by promotions, plan purchases ahead and use e-commerce to find low-priced, high-value products that can be delivered or picked up at their convenience. Retailers need to make sure their online and offline assortments include smaller serving sizes, include a wide array of value brands and are available at the push of a button.

Findings reveal that middle-class consumers with income over $50,000 are more likely to celebrate and spend as they have in the past. Consumers earning at least $70,000 a year plan to spend more online this Thanksgiving than lower-income households.

As retailers enact last-minute strategies, doubling down on online offerings and curbside pick-up at physical stores should be in the mix. It’s critical that retailers and brands give shoppers enough leeway to plan their purchases by extending the length of sales and continuously reminding them when to expect a big promotional event. Even during a pandemic, Thanksgiving remains core to the fabric of the U.S. Retailers and brands that adapt to an altered holiday landscape will reap the benefits.

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