Gray Falkon recently conducted a consumer survey that captured 2,477 responses regarding spend on Amazon before the COVID-19 pandemic, during the period of social distancing, and expected spend once the curve is flattened and people resume more normal activity outside the home. In this blog series, we’re taking a closer look at three different product categories and how they are being impacted during this time: pet supplies, grocery and gourmet, and baby products.
Have you adopted your quarantine pet? Animal shelters have recently experienced a spike in adoptions thanks to the need people have for companionship while sheltering in place. For example, both the Riverside County Animal Shelter in California and the Chicago Animal Care and Control in Illinois have announced having no pets available for adoption. With so many of us adopting pets during this time, it’s no surprise that people are purchasing more pet supplies online than ever before.
Online pet purchases have spiked 35% during the pandemic and are expected to be 16% higher than they were pre-coronavirus once social distancing measures end and brick and mortar stores everywhere reopen. 85 million Americans already owned a pet prior to the coronavirus outbreak, putting the pet supply industry in a strong position economically regardless, one that reports have even dubbed as recession-proof. The pet supply industry always puts up a strong eCommerce showing, but even more brands and shoppers are heading to online marketplaces like Amazon to sell and purchase products now.
Pet supplies may be easier for customers to buy online since they often don’t need to be seen or felt in order to make a selection. Once pet owners know what keeps their pet safe, healthy and happy, they can reorder and replenish the same items, from litter to food, on repeat. However, shoppers should verify they are purchasing their favorite dog treats from an authorized seller if not directly from the company itself to avoid fake, expired, or otherwise mishandled products.
Brands have a great opportunity to win new customers and increase brand loyalty by offering a differentiated shopping experience through selection, product images, descriptions and terms of purchase that are most compelling to this influx of buyers. The chance to capture new and loyal customers through exposure to pet products they might not find at their local Walmart of PetSmart presents a window where niche brands can really shine. Brands also need to protect that investment in the consumer brand experience by closely monitoring and removing unauthorized 3rd party sellers that will steal brand assets and push compromised product to unwary consumers.
Grocery and Gourmet
Online grocery and gourmet purchases on Amazon have jumped a startling 114% during the pandemic and are still expected to be 49% higher than they were pre-coronavirus once restrictions are lifted. Research is showing that the number of people doing their grocery shopping on Amazon is not rising drastically. Instead, the increase in size and frequency grocery purchases account for the difference.
Brick and Mortar retailers like Kroger and Giant Eagle are leaning into online-order fulfillment, to cater to the needs of online shoppers in an attempt to protect their businesses from players like Amazon. Instacart, the biggest independent grocery delivery service, estimated before COVID-19 hit that 20% of households would be shopping for groceries online within the next five years. However, since the pandemic, their volume is up 150%.
Many precautions, like wearing masks when grocery shopping, won’t be dying down anytime soon, causing shoppers to utilize the internet more so they don’t have to spend time browsing in the store.
More substantially, the increased online shopping activity will be sustained as consumers embrace the accessibility to more product choices and the convenience of having those products delivered to their homes. According to a recent poll conducted by L.E.K. Consulting, 60% of shoppers who sometimes purchase groceries online plan on shopping this way more frequently going forward.
For consumers and brands who are shifting their shopping and selling behaviors to Amazon, brand protection is of particular importance in grocery and gourmet. Illegitimate sellers on the gray market who don’t have their supply chain properly secured might be selling expired, spoiled, or mishandled foods which can put a consumer’s health at risk. Once the customer receives compromised groceries, the food brand itself will take the blame, rather than the illegitimate seller.
85% of grocery shoppers admit they aren’t loyal to specific brands during this time, so availability, convenience, and individual product quality are going to be key in capturing and keeping the business of online grocery shoppers. Brands should increase their vigilance on those sellers and take the necessary steps to protect their brand and preserve the safety and satisfaction of their customers.
As of March 30th, online baby product sales have surged 237% week-over-week. Purchases of baby products specifically on Amazon have risen 29% during COVID-19 social distancing and are anticipated to be 17% higher post-pandemic than they were before.
Essentials like baby wipes, formula, and diapers have sold out repeatedly in brick and mortar stores as families began panic-buying in bulk to make sure they do not run out of these essential items. Product shortages revealed consumers’ tolerance for higher pricing in the baby products category, which made them especially vulnerable to price gouging. For example, a 3-pack of Huggies baby wipes on Amazon is usually under $15, but was being sold on the gray market for $40.
Though there may not be a baby boomlet, demand for online baby product purchases beyond the essentials is expected to be higher. This spike in demand opened consumers to product alternatives. For example , several cloth diaper companies have seen a boost in sales, since cloth diapers can be reused and families won’t have to worry about replenishing supply as often. Now that consumers have experienced new products, these companies have an opportunity to establish a relationship with these new consumers.
Availability issues might be the driver behind a consumer’s temporary pivot to cloth diapers, but these brands have the opportunity to capture customers by emphasizing the benefits in their online marketing and maintaining a strong supply chain. Brands that showcase cloth diaper perks such as longevity, environmental impact, and gentleness will have an advantage when it comes to turning one-time buyers into long-term loyalists.
Increased demand, willingness to try new products, and low consumer price elasticity are primary factors that attract illegitimate sellers. More competition brought on by these sellers on the gray market puts significant pressure on both Amazon and individual brands to find ways to block this seller behavior and preserve the integrity and pricing of essential products for consumers.
About the Author
About Trajan Trajan Bayly, CEO of Gray Falkon, is an award-winning innovator across multiple industries, including e-commerce, technology, health, and finance. As a 20-year business veteran and recognized expert in market strategy, innovation, and artificial intelligence (AI) technology, Trajan’s leadership experience spans a wide spectrum, from startup technology companies to large, global organizations like Ernst & Young and General Electric.