Path to Peak 2022
With retailers facing an uncertain macroeconomic environment and significant changes in consumer shopping behaviour, how should they prepare for Peak 2022?
To support retailers in understanding the changing retail consumer, Google has invested in new research with Trinity McQueen, to provide you with some unique insights on how best to show up for your consumer this Christmas.
It’s also worth noting that this year, surging inflation, ongoing pressure on supply chains and concerns about the geopolitical situation, are putting extraordinary strain on the retail sector. And the impact on consumer behaviour is already showing up in our search data. For example we’ve seen a sharp drop in searches for big ticket items like ‘homes for sale’ and ‘cars for sale’, an increase in searches for ‘how to save money on gas and electric’ and increasing searches across the UK for foodbanks. It's a very difficult time for consumers and retailers alike.
Shopper behaviour has also changed drastically in the last couple of years as the pandemic has changed the retail landscape. We know we can’t predict how the rest of 2022 will play out on a macro level, but here we try to give retailers some more clarity on how their consumers have changed in the last few years, and the opportunities this presents for growth this peak season.
Whereas in the past, we’d see more searches for what we call ‘branded queries’ such as ‘charlotte tilbury foundation’, or ‘ikea sofa’ for example - over the last couple of years, we’ve seen significant growth in more generic types of searches such as “natural foundation” or “best sofa”. Effectively consumers are no longer coming online with a brand in mind, but they're actually increasingly using the internet to be inspired and to discover, and coming to shop without a specific brand in mind.
These online window shoppers are also relying more on visual touchpoints such as Google Images or the shopping tab on Search, for visual inspiration to help them make a purchase decision. In our study, we found 62% of retail consumers who use the shopping tab in Google Search do so to compare similar products from different retailers.
Video is also becoming an increasingly critical part of this inspiration phase, with more and more consumers turning to channels like YouTube to help them make purchase decisions: in fact 88% of shoppers agree that YouTube makes it easier to decide what to buy.
As well as being increasingly undecided, retail consumers are now also more experimental and open to trying new brands than they have ever been before. Put another way, the consumer is becoming increasingly promiscuous when it comes to their shopping behaviours. In the fashion sector alone, the proportion of shoppers who had tried a new brand jumped from 24% in 2020 to 34% in 2021 and is now at an incredible 51%. We also saw a similar trend playing out across all of the other retail categories that we studied.
Of course omnichannel shopping is not a new trend, but many advertisers still don’t appreciate the extent of how much things have changed. As an example, searches for “shopping near me” have tripled in the past two years. And here in the UK, a third of retailer consumers decide what they are going to buy in store, by browsing online before they even get to the shop.
Most retailers have been trying to improve their digital presence, and the good news is that our research suggests these efforts are paying off. We have been regularly tracking shopper sentiment towards online and offline channels over the last 2 years, and have been seeing significant improvements in the perception of the online retail experience. More shoppers now say “browsing for products” and “the ability to compare” is better online than it is in store for example.
So what should retailers be thinking about for the second half of 2022?
- Talk to a broad audience. As consumers are turning to online earlier in a discovery mindset, everyone is a potential customer for you, so you need to cast your net wide this Christmas. For example, Google’s Broadmatch solution allows you to cover all possible ways people search for products online, whether they type in your brand name, the brand name of a competitor or more generic product search. By casting the net wider, advertisers are able to deliver 25% more conversions on average for the same efficiency.
- Show up earlier in the consumer journey and talk to a broad audience. Whereas in the past, you may have just thought about online as driving the end purchase, this year make sure you expand your shop window by doing more upper funnel marketing online before the peak season, and give more focus to your online creative to ensure you have a really strong visual presence.
- Max out on automation, and super charge your automated campaigns by feeding in your first-party data. In a season that is going to be full of macroeconomic uncertainty, automated tools will help you remain agile and give you more reliability and predictability as we head into a challenging environment this Christmas.
- Don’t lag behind on omnichannel strategy. The number one challenge retailers face in 2022 is making sure their online and instore teams are set up to collaborate and service the channel agnostic consumer. Secondly, optimise your campaigns for omni-channel performance by ensuring you connect sales data from your stores into your online marketing bidding models. This will enable you to target your most valuable customers wherever they are doing their research and wherever they are doing their purchasing.
Sources:
- Trinity McQueen / Google, February 2022, UK, 5250 beauty, fashion, luxury, home, consumer electronics, grocery and telco shoppers
- Google Trends
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This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.