At NetElixir’s Connecting the Dots: Holiday Readiness Summit for Retailers on August 13th, we had the pleasure of hosting Al Bessin, the Chief Operating Officer of Circa Lighting; Carlo Savino, the Executive Director of eCommerce at Lenovo; and Parag Shah, the Vice President of the Grocery Division at Wakefern Food Corporation. As leaders of the Home Furnishing, Technology, and Food retail categories, respectively, each speaker offered unique insights into how the coronavirus impacted their customers, product lines, and marketing strategies and how they are strategizing for the holiday season.
At the core of their messages, however, was a unifying thread of accommodating the new to online shoppers through easy website navigation, expanded customer service support, and new product lines to engage and retain these new customers.
Insights Learned Throughout the Coronavirus Pandemic
Lenovo may have had an edge at the outbreak of the pandemic – they were already an entirely online business and had been preparing for an anticipated massive shift in e-commerce for the past few years. “But I don’t think any of us were quite expecting the explosive growth in work-from-home demands, in learning from home demands,” Savino said.
Pre-pandemic, small businesses made up a huge component of Lenovo’s customer base; during the pandemic, their customers shifted to individuals building out their remote working and learning set-ups. Savino with Lenovo faced the challenge of supplying these new customers and building an inventory that met and will continue to meet the spike in demand brought on by these brand new shoppers.
Savino noted a “recognition that we needed to pay attention every single day to what was happening with the people that were coming in, who was buying, and who, more importantly, weren’t buying.” Lenovo always had the habit of researching the buying behaviors of their shoppers, but with a brand new customer base came brand new browsing and purchasing patterns. Lenovo needed to shift their marketing and supply strategies to accommodate their shift from SMBs to individuals purchasing products for their homes, their families, and themselves.
“It’ll be quite a wild ride and I see no signs of it changing,” Savino says.
Al Bessin, of Circa Lighting, noted a similar change in customers, namely a growth in the B2C segment. People were readily buying online and adapting to Circa Lighting’s adept move to virtual meetings and showrooms. One of the few downsides, however, is on the trade side: as some purchasing decisions require more conference time and sales impressions for both business and individuals, the buyer cycle has been extended.
In a different caliber, Shah, overseeing the essential industry of the Food and Grocery division, saw no signs of slowing down as the coronavirus pandemic hit full force in March. Throughout March and April, the operational side of Wakefern pulled in additional people to their warehouses, stores, and fulfillment centers to match the increase in demand. On average, food consumption among individuals was rising as restaurants closed, but consumers wanted to make fewer trips out. Shah noted that foot traffic declined by about half almost overnight, but the average order size per person rose from $70-80 pre-pandemic to $200 during its height.
“What we were projecting to happen by 2025, was achieved in less than two months. Today, we are talking double digit engagements and we have 50% of the national customer base engaged online in some form during the crisis and 79% of them are saying that they will continue to engage in omnichannel even after the crisis is over,” Shah said.
The initial panic buying and hoarding of the early pandemic has slowed to a the new normal recovery phase we currently see ourselves in. Prior to the pandemic, nearly 50% of food was consumed outside of the home. There was no shortage of food in the country at those early days; rather, the supply change had to dramatically redirect their food channels when the location of food consumption altered overnight.
“What we were projecting to happen by 2025, was achieved in less than two months,” Shah said, in terms of Wakefern’s digital estimations.
Core Attributes of the New Pandemic Shopper
The coronavirus pandemic changed everything about where and how we lived, worked, learned, and ate. It changed, too, how we shopped and searched. The pandemic forced many consumers to go online for the first time, creating a brand new demographic: the pandemic shopper.
For Bessin and Circa Lighting, the pandemic shopper was one who sought comfort. As people were now spending more time at home, more time working in a different environment and creating a new work space, they sought design changes after looking at the same lamp and furniture day in and day out. Bessin said that the pandemic was “impacting [the consumer] desire and their want to have a more comfortable place to work.”
Shoppers crossed the initial threshold of online shopping to look for a change. “We’re getting non-savvy online buyers buying online, which means we have to accommodate somebody who isn’t as comfortable in that kind of environment,” Bessin said. He suspects that many of these shoppers will stay online, at least in part, and is devoting time and resources into making the website easier to navigate for these new shoppers.
Lenovo saw an explosive growth in the gaming segment of their products. Citing the stimulus checks from April, Savino said that people were using that extra money to buy things that made them happy and that could fill their free time. Gaming fit the bill.
“The internet […] is a pretty seismic democratization of data,” Savino, Executive Director of eCommerce at Lenovo, said.
With a greater ability to compare products and prices between tabs on their screen, customers have more information and services than ever available at their fingertips.
The pandemic shopper learns quickly. Savino saw a “pretty rapid shift in people who were traditionally uncomfortable shopping and purchasing online doing so at a much more accelerated pace.” As Lenovo traditionally divided their business around gamers, students, and SMBs, they are now expanding their reach to those who don’t fit those audience segments. These new shoppers have different expectations and needs when it comes to products, content, and mindset and Lenovo is pivoting to expand their reach.
Within the food industry, Shah noted a whole-view shift from experiential economy realized after the great recession a decade ago to a more homebound economy due to the coronavirus pandemic. The pandemic shopper couldn’t afford to be strictly brand loyal when initially grocery shopping, as they were at the mercy of what was on the shelves. Brand loyalty has shifted and even broken during the pandemic. Shah stated that 48% of new buyers are going to stay with the new brand that they bought during the pandemic, staying loyal to reliability. This opens opportunities for retailers to protect the new customers they have gained, while encouraging retailers who lost customers to try new approaches to win back their customers.
A Forecast into the 2020 Holiday Season
Between the different experiences of each executive, we see some common themes. Because of sheltering in place and a change in working and living conditions, people are seeking ways to make their homes and workspace more comfortable. New online buyers display different shopping patterns than pre-pandemic shoppers. Distribution of products is impacting brand loyalty. These tenets will most likely play a factor in shaping the trends of the upcoming holiday season.
For Lenovo, planning for the holiday season begins in late February, early March. Adjusting for new consumer behavior, changes in product affinity, and inventory modifications, Lenovo anticipates an early start to the holiday season and high, sustained online momentum until last-minute shoppers have to go to stores to secure their gifts. Throughout the pandemic, Lenovo upped their marketing efforts to increase brand awareness and website visits and plan to continue those efforts. Savino summarized, “If you have the supply to meet the demand, putting money into market has been a huge catalyst for our success over the last few months.”
Additionally, in order to successfully manage the largely virtual experience of this holiday season, Savino talked about rigorous testing of every aspect of their online channels. Through a rapid acceleration of platform testing, Savino and Lenovo will ensure that their website can handle the influx of visitors second by second.
Bessin noted that people are more starved for communication and connection. Moving into the holiday season, Circa Lighting will be increasing their social media and online events. With a greater online presence and more flexibility in expanding their customer service hours because the company is working from home, Bessin is focused on “creating an active dialogue online.” Bessin saw that remote working offers more creativity in shift hours to be able to better accommodate being there for customers whenever they need assistance, especially for those who are new to or unfamiliar with the online experience.
Shah prioritized not waiting for changes, but aggressively approaching them. “We are planning and preparing, but also being flexible enough so we can react if some variables change that we did not consider,” Shah said. While the holidays will probably not reach the demand seen in March, there will be a surge for the fall and holiday celebrations, so Shah is investing in inventory, warehouse, supply chain, and technology capabilities.
“Delivering same value, but differently,” Shah, the Vice President of the Grocery Division at Wakefern Food Corporation, said in regards to exceeding customer expectations this coming holiday season.
What Can Retailers Expect of the Holiday Season?
Three words sum up the expectations of the upcoming holiday season: people, competition, and acceleration (beyond unpredictable and uncertain).
People, as both employees and consumers, have always defined the holiday season, but cultivating strong relationships will be more important than ever. Now is the time to begin conversations with consumers about new products, inspirations, tips and tricks to connect with them on a deeper level.
Competition will certainly heat up this holiday season, as companies strive to make up revenue lost during Q2. We are moving into a world of unified commerce and omnichannel experiences, so businesses need to ensure that their e-commerce platforms can reliably accommodate an influx of customers, while providing a safe in-store experience.
And, finally, retailers need to accelerate the embracing of the new and discontinue old habits. Retailers should be moving into the new normal because, as Shah mentioned, that is where the customer is.
While the advice and learnings shared by our executives offer more insightful dots into creating a robust holiday season strategy, each retailer should consider the needs, behaviors, and demands of their own unique customers. Research consumer trends, paths to purchases, and questions – listen to your customers and they will tell you how to help them this holiday season.
Back in March, when the pandemic was first hitting the United States, NetElixir spoke with Parag Shah because we nominated Wakefern Food Corporation for ShopRite as March’s Retail Superhero in our Impact of COVID-19 webinar series. Read more on how Shah’s team handled the massive surge in demand as food consumption dramatically changed during the early days of the coronavirus pandemic.
Lenovo’s story is just beginning. Next week, on Thursday, September 10th, NetElixir and Lenovo are celebrating our 10 year growth partnership. Ajit Sivadasan, the founding executive of Lenovo’s global online strategy, will present A Different Holiday: Opportunities & Challenges in a COVID World. Join our celebration and learn more about:
- New customer realities
- Digital as the new imperative
- Actions to adapt to the new reality
Register now at https://www.netelixir.com/webinar/.