…amid cost-of-living pressures
Thirty Percent of overall sales value for 2022 was from just six sales events like Black Friday, 618 or Christmas. Are consumers’ buying habits changing?
Persistent inflationary pressure is not only causing consumers to spend their money more carefully and demand is therefore declining. They are also adjusting the times at which they purchase. As a result, there are currently fewer impulse purchases. Almost half of all consumers worldwide have waited to make purchases until they could buy at a lower price during retail promotions.
In the past, promotions were used to increase sales: consumers had an incentive for additional purchases or were addressed as cost-conscious buyers. Seasonal promotions were aimed at buyers who were considering a purchase anyway.
Well-known promotions with new requirements for retailers
These parameters still seem to be in place for the longer term. But new ones are emerging as well, as a look at two major international promotion events shows:
The Chinese “618 shopping day” was able to increase sales of technical and durable goods online by 5 %. Offline retailers also reacted strongly to this event, increasing their sales by 10 % compared to the same week last year.
In Europe*, for example, during the promotion days of a major e-commerce retailer in July 2023, consumers opened their wallets despite the tense situation. Other companies also used the period to offer special discounts. This event increased sales across the market by 5% compared to the same period last year. This year’s promotion days thus proved to be the most successful to date – especially for small domestic appliances and telecom products.
More than ever consumers were looking specifically for promotion days – purchases were timed in such a way that high-quality, long-lasting products could be purchased as part of these promotions. The increased sales figures also led to an increase in turnover.
Discounts alone are no longer the focus
What drives consumers to purchase goods during these major sales promotions? They still want products that reflect their lifestyle and offer innovative features, real added value, convenience, or improved performance. What has changed is the attitude: purchasing decisions are made more rationally, and the effect of a promotion is no longer driven by price alone.
Identifying trends – serving consumer needs
So, what can retailers learn from the key trends that caused growth during this year’s promotion days?
Promotions should highlight the benefits and use cases of a product. Products that offer convenience and are smart or automate tasks are the ones that are most popular. This is currently seen particularly strongly in small domestic appliances. For example, total sales of vacuum cleaners in France increased by 43 % and those of deep fryers in the UK by 165 % compared to the promotion days last year.
The desire for a flexible lifestyle is becoming increasingly attractive to consumers. Products that allow them to work and communicate from anywhere are growing faster than their stationary counterparts. For instance, headsets grew by 65 % and tablets grew by 33 % in Germany during this year’s promotion days compared to the last 52 weeks’ average revenue.
Make adjustments to reach the right audiences
Worldwide, major promotional events will likely play a more important role throughout 2023 than they had in the past. Summer promotions have already successfully boosted consumer demand. Changing consumer behavior is also expected to lead to above-average sales being generated as part of special promotional activities in the fall and winter. To take full advantage of the associated opportunities, retailers should adapt their advertising campaigns to take advantage of these trends.
Find out more on Evolution or REvolution — what can retailers expect in the next 3 years?
*EU5: DE, GB, IT, ES, FR.
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