AfterPay Insights researches consumers’ attitudes of the coming e-commerce peak season. Today we share our September conclusions, which are based on interviews with almost 6.000 consumers in the Netherlands, Germany and Norway. Key findings:
In Norway, the amount of consumers who intend to purchase on Black Friday increases by +27% in 2020, compared to 2019, reaching a total of 45% of Norwegian consumers who intend to make a Black Friday purchase. They are followed by German consumers (+23%) and Dutch consumers (+12%).
Looking at all peak season sales (Prime Day, Halloween, Singles’ Day, Black Friday, Cyber Monday, St. Nicholas) around half of all consumers in Germany, the Netherlands and Norway state that they will make a purchase and 20-25% have already even decided what they will buy. If consumers act on their intentions, they will make most purchases in Fashion and Electronics. Interestingly, Electronics is expected to overperform most compared to consumers’ usual purchase patterns.
We see significant differences in the consumer groups that intend to buy at the different sales events. Consumers intending to buy at Prime Day and Singles Day are by far the most digital savvy, and consumers aiming to purchase on Black Friday currently do the majority of their shopping offline, maybe not a surprise as this sales event has matured and has become more mainstream.
As peak season sales are driven by promotions, we decided to ask consumers for their expectations and how this will impact their purchase behavior. Our research shows that 40% of consumers think merchants will offer more promotions this year, and the majority of consumers thinks merchants will offer them earlier. Consumers also expect to get offered the best deals during Black Friday and after Christmas.
When it comes to holiday season shopping, one of our standout finds is that consumers have already purchased 7-11% of all Christmas gifts. But in contrast, consumers plan to buy less Christmas gifts than last year. In ‘Santa’s Gift-O-Meter’ we will continue to monitor at which pace Christmas gift purchases accumulate throughout the peak season and into the holidays.
In general, consumers state that they plan to shift more purchases to online. In the midst of a developing ‘second wave’, it is clear that worries about health have started increasing since summer, while worries about finances remain at a stable level. This may especially impact the distribution of offline vs. online purchases.
All in all, consumers have clear expectations that set a high bar for merchants’ performance as well as what drives consumer satisfaction. Find out how merchants can meet consumer demands in the ‘merchant considerations’ in this blog post.
Black Friday is the driver of peak season sales. Regardless of country, ‘Black Friday’ is the strongest peak season sale. Not only does it have an uncomparable awareness among consumers, but it also has the highest conversion from being aware of this sales event to making a purchase. Across all three countries, at least one third of consumers state that we will make a purchase during Black Friday.
Comparing the share of consumers who purchased on Black Friday last year to the share of consumers who intend to purchase this year, Norwegian consumers indicate that they intend to increase Black Friday purchases by 27%, followed by German consumers (+23%) and Dutch consumers (+12%).
In the Netherlands, 70% of consumers are currently aware of Black Friday. 26% of consumers purchased on Black Friday last year and 29% of consumers intend to purchase on Black Friday this year. The St. Nicholas (or ‘Sinterklaas’) sale stands out as the second largest sales event - both in terms of awareness and share of consumers purchasing. Together with the Cyber Monday sale, St. Nicholas also has the steepest growth rates when comparing the share of consumers having purchased last year vs the share intending to purchase this year.
When analyzing which consumers that intend to purchase across these sales events, there are significant differences not only in terms of demographics but also regarding online savviness and demands that these consumer groups place on merchants.
Even though the share of consumers across all three countries that intend to buy at the Prime Day sale and/or the Singles Day sale is relatively low, these consumers are very digital in nature. Looking at these consumers’ general shopping expenditure, almost 55% is spent online with the remaining 45% being spent offline. At the same time, these consumers also stand for the highest purchase volumes online at present. Cyber Monday, Halloween and St. Nicholas sales are relatively similar when it comes to consumer composition from an online savviness perspective.
And consumers intending to purchase on Black Friday have the majority of current shopping expenditure offline, this is no surprise as it has attracted such a large customer base and therefore also includes more traditional shopper segments. The 40% of consumers that don’t intend to purchase at any of the sales events are by far the most traditional with a current online/offline shopping expenditure ratio of 32%/68%.
Looking at demographical differences, consumers who intend to make a purchase during peak season 2020 are significantly younger than the group who do not intend to purchase at any sale. Among the peak season shoppers, there is also an over-representation of consumers in the pre-family and ‘having children at home’ life stages, as well as consumers with a higher than average income. Prime Day, Halloween and Singles’ Day are more male dominant while Black Friday is more female dominant.
With regards to product categories that consumers intend to purchase during the different peak season sales, we see some categories that stand out. Electronics are more in focus for Cyber Monday and Prime Day, and Fashion is over-represented among those intending to purchase on Black Friday and Singles' Day. For the Halloween sale, comsumers aim for Home decorations, Hobby Articles and Food. And Toys are in focus for the St. Nicholas sale.
When it comes to demands on merchants, consumers who intend to purchase on Black Friday and Cyber Monday are significantly more driven by low prices compared to the shoppers on the other events. However, Cyber Monday shoppers are more digitally native and find it more convenient to shop online than offline. And on the other hand, Prime Day and/or Singles’ Day shoppers - the most digital oriented consumers - are significantly more driven by webshops offering a fast delivery time and flexible delivery options.
In general, Black Friday - being such a dominant sales event - shows large cross-purchase shares among all other sales shopping groups. Another prominent cross-purchase pattern is that of Singles’ Day shoppers and Prime Day shoppers aiming to also purchase on Cyber Monday.
Lifting the view and looking across all the different sales events, 40-50% of consumers state that they will purchase on at least one of these sales events. And an even more powerful statistic is that 20-25% of all consumers have already planned what to buy on these events, i.e. they are just waiting to execute on their needs.
During peak season sales in 2020, most purchases are expected to be made within the product categories Electronics/Telecom and Fashion: one third of consumers who aim to make at least one purchase during peak season sales (40-50% of all consumers) state they will purchase in these categories.
In the graphs below, we compare the share of consumers who made at least one online purchase per product category during a normal month versus the share of consumers intending to make a purchase per product category during the upcoming peak season sales. Note that the survey questions that form these axis are not 100% comparable, so in interpreting the graphs we look at the relative distance of the verticals from the diagonal axis.
In the Netherlands, it is clear that Electronics – from a purchases perspective - is the vertical that is expected to overperform most during 2020’s peak season sales. Fashion, Toys, Media/Entertainment and Hobby articles are also expected to sell more than average.
About 20% of consumers already notice that merchants offer more promotions now than a month ago. And 40% of consumers think merchants will offer more promotions this peak season, compared to last year. At the same time, only 5-10% of consumers think merchants will offer less promotions this year.
Not only does a large share of consumers expect more promotions this year, but they also expect that promotions will come earlier rather than later. One third of consumers believe that merchants will compete to launch promotions as early as possible. These consumers are obviously already on the lookout, ready to ‘press the purchase button’. So attracting these customers is key to establishing early seasonal volumes that- in the long-term - can be converted to a customer base growth.
In the midst of a developing ‘second wave’, it is clear that worries about health have started increasing since summer, while worries about finances remain at a stable level. This may especially impact the distribution of offline vs. online purchases. Since consumers’ worries about their finances are very stable, we would not expect consumers overall shopping expenditure to change beyond normal. But as we see that consumers have become more worried about their health, and it is probable that this level of worry will in increase even more going into a second wave of the outbreak, this will likely cause consumers to again shift purchases from brick-and-mortar stores to online.
Around 30% of consumers in both the Netherlands, Germany as well as Norway state that the best deal can be made during the ‘After Christmas’ sale. And 31% of Norwegian consumers, along with about 20% of Dutch and German consumers, think the best deal can be made on Black Friday. Note that the awareness of the respective sales has an impact on these numbers. As we can expect the Christmas sales to basically have full market awareness, Black Friday is performing very strongly in this respect.
The vast majority of consumers, around 70% across the three countries, state that they will probably buy Christmas gifts on the same level as they did last year. But overall, consumers are likely to buy less Christmas gifts this year compared to last year. This is evident as only 9% of consumers say they will buy more Christmas gifts compared to around 20% of consumers indicating they will buy less.
In tracking the accumulated volume of Christmas gifts bought to date, we see that following September consumers have already purchased 7-11% of the gifts that they intend to buy for Christmas. We will continue to track the pace of how this volume builds over time, and in these analyses also monitor how the different sales events moving towards Christmas will impact the degree of gifts purchased.
We will continue to survey consumers about their (future) shopping behavior during peak season 2020. And we will deep dive into peak season purchases in Fashion. Stay tuned for more!