Blog Posts Archive

Expert Q&A: Trends in CPG Marketing

Aimee Englert is executive director, CPG client strategy for Vericast, driving industry thought leadership and heading a strategy practice dedicated to driving revenue through insight, inspiration and media intelligence. She has over 20 years of experience across multiple disciplines, from digital advertising and commerce strategies, to analytics, consumer promotions, and all forms of marketing.

How do you think the CPG and grocery industries have changed in the past two years? Do you think these changes are temporary shifts or more lasting and long-term?

The most obvious change is the dramatic rise in US online shopping which we all know skyrocketed due to the pandemic. Many have sustained the new, omnichannel shopping habits they formed, and today well over half the population shops online, per dunnhumby.¹ CPG brands have a bigger job to do, ensuring they show up consistently in offline and online channels with everything from inventory to pricing to promotions. And many have shifted media investments to digital channels — social and retail media especially — to meet consumers where they are.

Increasingly though, consumers today are hard to pin down. According to our research, inflation has changed the way people shop, compelling them to shop around more to find best prices while also trying to conserve trips to save on fuel. Comparison shopping, switching between brands and trading down to private label are all behaviors on the rise, even among surprising segments of the population, such as affluent consumers. In our CPG + Grocery TrendWatch² report, we looked at affluents and three other generational groups and found opportunities for CPG marketers to connect with these shoppers considering ongoing inflationary pressures.

Will these trends stick? Absolutely, online shopping is here to stay but I think the balance of online and in-store will continue to flex according to the changing needs of the consumer. And retailers need to tailor their online experience to those needs that are constantly evolving, and vastly different from in-store. Regardless of how long inflation persists, I think there’s a good chance the savings behaviors are likely to stick. We’re past the generally accepted benchmark of number of days for a behavior to become a habit, and with depleted savings and rising interest rates, for example, it could be a while before household budgets experience any relief.

Consumer shopping continues to evolve as consumers adapt to various factors — particularly over the past couple of years — first the pandemic and resulting supply chain issues and now economic and financial challenges. What can retailers/brands do to adapt to (and anticipate) these changes to meet the needs of shoppers?

First, brands need to ensure they have product on the shelf. Of course, this is easier said than done with so many factors affecting the supply chain, from weather to war to politics. But frustrated Americans seem to be looking to place blame, and their focus has shifted to blaming supply chain costs and constraints for driving grocery inflation. Even if your distribution isn’t back to pre-pandemic levels, it’s important to advertise to help ensure that your brand stays top of mind to keep shoppers, especially price sensitive ones, from drifting to a competitor. Serve your digital impressions to guide shoppers to stores where products are in stock. Advertise when your product is on sale. Make your ads interesting, make them fun — but don’t overload, insult or go over the top with frequency that turns potential customers away. And because people are changing up what they buy, we recommend national brands take a close look at private label in their respective categories and plan to mitigate any retailer efforts to win share.

With all the investment in digital media, brands can take advantage of the opportunity to gather data to inform personalization efforts and then actually deliver personalization to the audiences and generations that especially want it, such as we found is the case with millennial parents in our TrendWatch report. One caution though: Extreme shifts in advertising can leave valuable consumer segments behind. Don’t forget about baby boomers and those who still enjoy the physical world. Per our survey, although baby boomers are adopting more omnichannel shopping habits, they appear to be less influenced by social media and digital marketing. They’re looking for printed ads and coupons to guide shopping decisions. Our report found that just over 40% of baby boomers say they are most influenced by coupons that arrive in the mail or newspaper, and 43% still favor circulars in the mail and 42% from newspapers. It’s all about striking a balance.

A piece of advice to retailers — insist on good customer service to soothe frustrated shoppers. Make every attempt to improve customer service since everything else is screwed up! Another suggestion is to promote meal solutions and recipe ideas given the trend toward at-home eating.

Value remains important to shoppers. This can mean getting a good deal or the best price, or it can be more about perceived quality or convenience. What advice would you give to retailers and brands to stay top of mind with consumers and drive purchase, especially in these inflationary times?

Great question, and I completely agree value means different things to different people. Our research confirmed that consumers have noticed brands are passing on higher prices to the shopper — whether through increased price at the shelf or smaller packages for the same cost. And they are coping with these price increases by shopping for sales more often and using coupons more. But they’re having a hard time finding coupons for the products they want or finding them at all; many don’t get coupons or flyers anymore because they stopped coming in the mailbox, or they stopped getting the newspaper. Our TrendWatch study found that 62% of brands plan to spend MORE or the same on print coupons this year, but we have yet to see good evidence of that. Many of the brands that pulled back on coupons during the pandemic haven’t restarted them. There is a real opportunity for brands to recognize just how much the average American family is struggling and deliver savings opportunities to help balance budgets — and bonus — keep your brand in the basket.

Another value driver these days is private label. Store brands are capturing new shoppers as spending becomes more intentional, and the latest trends suggest that consumers switching to store brands are sticking with them. But lower price is not the only reason they’re buying them. According to BizRate Insights, some people are switching because private brand assortments are bigger, or they don’t even realize they’re store brands.³ For national brands, it’s critical to mind the price gap. Identify private brand strengths or weaknesses and adjust your pricing, promotion and targeting strategies to protect share. Hone your messaging to flaunt differentiators or product improvements that will sway shoppers to pay more for your product. It’s all about disrupting the trade down mindset, by whatever means.

At the same time, retailers cannot rest on their store brand laurels. A private brand is not a shoo-in if the product experience is not positive. It doesn’t matter if it’s cheaper — consumers won’t repeat buy. And to catch attention in the first place, store brand packaging must imply quality or people will infer inferiority.

As people resume activities outside of their homes and continue to do a mix of in-store and online shopping, what can brands/retailers do to improve the shopping experience regardless of channel? How can they be helpful to consumers as they manage everyday life?

We know people have increased their omnichannel shopping, but Vericast research shows that consumers rate in-store shopping above online shopping in being able to meet their needs — in all aspects except for saving them time. This is particularly important for millennial shoppers who rely on online shopping more than other generations. Feeling the pressure of inflation, millennial parents report that they go online to find promotions and products that fit their lifestyles. Most importantly, convenience plays a huge role in their preferences, leading them to pay extra for delivery or subscription services that ease the burden of in-store shopping. But brands have an opportunity to learn from their in-store shopping preferences and adapt them to the ecommerce experience through advertising. As an example, consumers say they enjoy the discovery and inspiration that in-store shopping provides, resulting in impulse purchasing. Digital campaigns can encourage that same sense of discovery while playing to the convenience aspect of ecommerce. Targeted ads to deal-seeking shoppers featuring key impulse categories such as snacks, cookies or seasonal items can encourage more online shopping.

For retailers, like my earlier point on customer service, it’s about the basics. Have enough employees. Have all lanes open. If you can’t staff all lanes, convert some of the unstaffed full-service lanes to hybrid lanes — self serve for bigger baskets, because no one follows the 12 items rule. In advertising, communicate a clear raison d’etre. “Retailer X delivers comparable brands at better prices.” Advertise your guarantee on this. And just as with brands, the rising share of total business in ecommerce strongly points to the need to understand the value and changing needs of the online customer. Retailers must adapt their respective online experience to those needs that are evolving quickly.

Learn about the latest in buying habits among various consumer segments and get insight from our survey of CPG and grocery industry professionals. Download the 2022 CPG + Grocery TrendWatch.

1 dunnhumby Wave 9 Covid Survey US Grocery Shopper Behavior, Feb 2022
2 Vericast 2022 CPG + Grocery TrendWatch, n = 1,909 consumers
3 Insider Intelligence, Private Label Flash Survey by Bizrate Insights, March 1, 2022

A Marketing Movement: Direct Mail Is On a Hot Streak

At a time when digital is top of mind for advertisers — and rightly so, with its powerful place in all our lives — one of the most established, tactile and proven traditional media platforms: Direct Mail, has enjoyed a resurgence. Savvy brands are casting direct mail in a key role in their marketing arsenals.

You might think you know everything there is to know about direct mail, but what you may not realize is that the pandemic altered consumer behavior and made consumers embrace direct mail like never before. The change in consumer behavior has created real momentum for the marketing channel, as well as unique opportunities for marketers looking to forge relationships with consumers in an up-close, tangible, and highly efficient way right in consumers’ homes.

Still, old assumptions about direct mail may keep some brands from reaping all these benefits. Let’s address some of those misconceptions head-on.

Myth #1: Direct mail is too old-fashioned

Direct mail isn’t old, it is timeless. The mailbox got a new life as people spent more time at home during the pandemic and had the time and opportunity to see what was in the mailbox. Consumers had the chance to peruse the ads being delivered to their homes. This led to a resurgence of direct mail.

The plain truth is that direct mail continues to engage consumers. From the study for our 2021 Consumer Intel Report, we found that 66% of consumers use mail coupons. Looking closely at a few consumer segments, according to respondents, 63% of Gen Z, 72% of millennials and 81% of millennial parents engage with direct mail.¹

Further, the methods, technology and data available to marketers facilitate today’s direct mail campaigners every bit as much as they do for digital advertisers. For example, localized targeting enables marketers to better understand and engage audiences in specific neighborhoods or even at the household level, and then tailor the messages around demographics and personal interests.

Direct mail, in other words, is far from “spray and pray.” It can be as targeted and relevant as a brand wants it to be.

Myth #2: Direct mail appeals just to older consumers

Nearly everyone today, regardless of age, is on a mobile device and relies on their smartphones, smartwatches and tablets for everything from working to shopping and entertainment.

Do you know what is even more common for consumers to have? A real, physical mailbox. And since most addresses are home to more than one person, direct mail is an especially effective way to reach almost every consumer across demographics.

Direct mail has been shown to work with a broad swath of age groups, including younger consumers. Our Awareness-to-Action survey found that:

69% of millennials and Gen Xers said they regularly read print or look at ads that come in the mail²
48% of millennials and Gen X noted that direct mail helps them choose where to shop (significantly higher vs. all respondents)³

Direct mail not only reaches the consumers that brands are hungry to reach, but it also does so efficiently. For example, marketers who want to reach millennials can build on localized targeting to discover areas most likely to include millennials interested in their product. This enables highly effective messaging to motivate these consumers to act, especially since our March 2022 Awareness-to-Action Study found that direct mail ads encourage 55% of millennial parents to try a new store or business (significantly higher than all respondents).⁴

You might say that this is not your parents’ direct mail, and you’d be right.

Myth #3: Direct mail is too expensive

Brands are putting their marketing campaigns’ return on investment (ROI) under an intense microscope. The flashiest campaigns or the hot digital platform of the moment may not deliver the punch advertisers are hoping for.

Enter direct mail, which is not only efficient but can be one of the best investments a marketer can make.

The number of direct mail physical options is almost endless, from postcards to high-end creative mailers and anything in between, suiting a range of budgets.

Direct mail has been a bedrock of marketing plans for decades. Even with the rise of digital media, it remains an indispensable way to connect with consumers as part of a holistic, omnichannel campaign. In fact, consumers say that seeing an ad both in both print and online, helps them to remember the message (51%) and makes them more likely to notice the ad (51%).⁵

This is a medium that’s experiencing a moment. It’s time for marketers to seize it — learn more about how to benefit from the power of direct mail by downloading our ebook, “This Direct Mail Moment,” and learning about consumer behavior in our extensive direct mail resource hub.

As part of the Vericast marketing team, Megan O’Gorden specializes in the CPG promotions landscape. She has 20+ years of experience in product storytelling and go-to-market execution, helping clients discover and utilize solutions that drive consumer engagement and positive business results.

1 Vericast 2021 Consumer Intel Report (n = 1,004)
2 Vericast Awareness-to-Action Study, June 2022 (n = 1,835)
3 Vericast Awareness-to-Action Study, March 2022 (n = 1,968)
4 Ibid
5 Vericast Awareness-to-Action Study, February 2022 (n = 1,841)

The Science Behind Direct Mail: Why It Matters and How to Use It

It’s no secret that consumers are increasingly going online to get their news and entertainment and to carry out ordinary tasks like shopping and paying bills. Even in such a world — perhaps, especially in such a world — there remains something uniquely compelling about the tactile, multi-sensory experience of going to the mailbox, sorting through the mail, and opening an envelope or package. And the pandemic has amplified that.

The field of neuroscience sheds important light on exactly why this experience is so compelling to so many. But the point isn’t just to celebrate the effectiveness of direct mail. By diving into the science behind it, we can get a better understanding of the optimal role for direct mail in omnichannel marketing strategies. And, for us data-driven marketers, that is exciting stuff.

The Curious Staying Power of Direct Mail

There’s something curious about the staying power of connecting with consumers through the mail. In an increasingly digital age, marketers keep coming back to this tried-and-true tactic. Our research shows that when businesses try to scale back their direct mail efforts or shift their direct mail dollars to other areas, they experienced almost immediate financial losses.¹

Not even a global pandemic has been able to bring down direct mail. Beyond surviving, direct mail is thriving as the pandemic has propelled it to a whole new level of importance. To illustrate, as the pandemic forced consumers to spend more time at home, our consumer study conducted in November of 2020 found that 34% were spending more time reading direct mail ads, and 31% were more excited to receive their mail each day.²

And the point goes beyond lockdown boredom causing people to pore over their mail. Direct mail is generating meaningful action. According to a March 2022 Vericast study, 53% of consumers surveyed noted that direct mail influences them to visit a restaurant or order delivery/carryout. Additionally, 47% agreed that it motivates them to try a new store or business.³

What Makes Direct Mail So Effective?

Of course, all of this raises the question: Why? What is it about direct mail that makes it such a persistently important part of the marketing mix?

The short answer is that people just respond differently to direct mail than they do to digital media. One academic study after another has backed this up.

For example, a study performed by neuromarketing firm TrueImpact on behalf of Canada Post found that direct mail requires 21% less cognitive effort to process and produces 70% higher brand recall than digital advertising.⁴

In another set of studies, the U.S. Postal Service partnered with researchers from Temple University in 2015 — and again in 2019 — to look at the differing impact of print and digital advertisements. Here are a few of the key findings:⁵

Direct mail holds our attention longer. We spend more time reviewing print media than digital, and younger people spend even more time with print than older generations.
Direct mail elicits a stronger emotional response, leaving a longer-lasting impact.
Direct mail is more memorable. Across all age groups, we can more quickly and confidently remember the content and sources of print advertising.
Direct mail produces greater desire. We place a higher subconscious value on products or services we see in print ads.

What’s more, the Temple research indicates we may even be “hardwired” to respond this way. The researchers found that print advertising activates the ventral striatum area of the brain more than digital media. A prior study found that activity in this brain region was an indicator of desire and valuation — a better indicator than self-reporting. Loosely akin to the mythical “buy button,” the ventral striatum is the area that has the highest correlation to advertising effectiveness.⁶

Is Direct Mail Always the Best Option?

Along many dimensions, direct mail tends to be more effective than its digital counterparts — but not all.

The Temple researchers found that digital advertising held readers’ focus on key components of the ad for longer. So, even though people generally spent less time reviewing digital ads, they were ultimately able to process and absorb the same amount of information from digital and paper advertising.⁷

These findings suggest that direct mail and digital media have distinct roles to play in an omnichannel marketing strategy. Consider using digital media in cluttered environments where you have to grab attention and deliver your message quickly. But, when you’re out to make a deeper emotional connection with consumers and inspire them to action, consider using some form of direct mail.

Taking a Scientific Approach to Your Omnichannel Campaigns

Of course, it takes data — and expertise in interpreting that data — to accurately and scientifically determine the optimal blend of print and digital media for your campaigns. That’s where Vericast comes in. Our Consumer Graph™ uses predictive intelligence to convert billions of consumer signals (tied to both location and behavior) into meaningful action across online and offline channels. By letting the data show you the most impactful ways of connecting with your consumers, you just might discover that direct mail can significantly enhance your next omnichannel campaign.

To learn more about the unique conditions that are presently amplifying the importance of direct mail in the marketing mix, check out our ebook, This Direct Mail Moment. While you’re at it, refer to our video series dedicated to clearing up common misconceptions about direct mail. You can find both the ebook and the video series here.

Kristin Connolly is an executive director of product management at Vericast, focused on fresh thinking for product innovation and growth. She has more than 25 years of experience in data-driven marketing across a wide range of client verticals, with expertise in marketing strategy, product development, and audience segmentation.

Sources:
1. “The Direct Mail Resurgence You Didn’t See Coming.” July 18, 2019. https://valassis.com/blog/the-direct-mail-resurgence-you-didnt-see-coming/
2. Consumer Study, November 2020.
3. Vericast Awareness-to-Action Study, March 2022.
4. Dooley, Roger. “Paper Beats Digital in Many Ways, According to Neuroscience,” Forbes.com. September 16, 2015. https://www.forbes.com/sites/rogerdooley/2015/09/16/paper-vs-digital/?sh=49cb588133c3
5. “Is Direct Mail Advertising Effective? A Research Study.” https://www.uspsdelivers.com/why-direct-mail-is-more-memorable/
6. Dooley. “Paper Beats Digital in Many Ways, According to Neuroscience.”
7. Ibid.

The Direct Mail Momentum: How To Ride the Current Momentum of Direct Mail and Measure Your Success

The events of the past couple of years caused people to shift their behaviors, particularly as they found themselves spending more time at home. When it comes to media engagement, with direct mail specifically, our November 2020 Consumer Study found that 49% of the affluent segment (those with household income of $100K+) were more excited about receiving mail than they were pre-pandemic. The same survey revealed that 44% percent of millennials were spending more time reading direct mail marketing or promotions than they were before.

And now, on the heels of the pandemic, we face historic levels of inflation. Considering how effectively direct mail delivers important savings to consumers, we can expect its momentum to continue.

Here are a few best practices for creating effective, engaging direct mail campaigns.

A snapshot of the direct mail moment

Here are some of the key direct mail stats from our recent research.

70% of respondents said they regularly read or look at ads that come in the mail (Vericast Awareness-to-Action Study, June 2022)
61% said it makes them aware of neighborhood stores, restaurants and services — 67% of millennials and baby boomers agree (Vericast Awareness-to-Action Study, March 2022)
47% said direct mail motivates them to try a new store or product — 55% of millennial parents agree (Vericast Awareness-to-Action Study, March 2022)

Build on momentum

Direct mail is all about connection: From the moment consumers pick up their mail each day, primed to engage, they’re looking for information and savings. The average shelf life of direct mail inserts is 17 days and during this time your mailed message will be read, put on display, used for a shopping trip, and shared with others in the household.

When you consider that 88% of key purchase decisions are discussed at home, and households are getting bigger with millennials living at home for longer, the impact of that reach and longevity compounds.

By comparison, to engage every member of a household with a digital campaign you may need up to five or six email addresses. Direct mail has the potential to get the same reach with one physical address.

Capitalizing on this reach and engagement — and fueling it beyond the mailbox — starts at inception, when you get the ball rolling with audience segmentation and targeting.

Leverage CRM. Use your CRM data to understand your consumers and find look-alikes Direct mail is highly effective at both customer retention & acquisition.
Create an omnichannel experience. Align your direct mail campaign with your digital efforts to create a complete journey. Studies repeatedly demonstrate the incremental lift that comes with omnichannel campaigns.
Make your messaging resonate. Understand the demographic make-up of the households you’re targeting. If mail is being shared, it can’t just talk to one person.

Taking these steps at the beginning of the campaign will ensure an already primed audience is motivated to take the desired action and keep the momentum of the campaign rolling.

Measure your effectiveness

Measurability is crucial for demonstrating ROI and helping you maintain the campaign’s momentum. Seeing what works, and understanding why it works, helps you replicate and build on success. As part of the upfront planning, be sure to include ways to measure how the campaign performs against your objectives.

Whether it’s coupon redemption, call tracking, traffic, or sales matchback — direct mail is measurable, and you should be understanding performance and engagement.

One increasingly popular way to bridge from print to a digital experience involves putting a QR codes on the direct mail ad to prompt the reader to take action, while helping you track conversions.

You can create unique QR codes for households, neighborhoods, different CTAs, or offers to test and track numerous metrics. QR codes enjoy widespread adoption, particularly among millennials.

Unique URLs offer similar functionality. If you’re targeting households with a mix of demographics it may be worth including unique URLs and/or QR codes.

Driving the connection online not only enhances the campaign’s measurability, it also unifies the brand between print ad and digital presence. This means you’re building a path for two-way engagement that allows you to prompt consumers to check their mailboxes in the future.

If you’re running an offer with coupons, use unique codes for different cohorts and track redemptions to see which are performing best. You could also use this as an opportunity to test creative executions.

Don’t let it die on the hallway table

Direct mail is having a moment. The current environment has exposed new opportunities and amplified what has always made it such a great format. Brands have a real opportunity to capitalize on the momentum with direct mail campaigns that reach consumers and deliver needed savings.

The tips in this post will help you create highly engaging campaigns. But there’s more. Take a deep dive into the direct mail moment and see what else you can be doing to capitalize on it.

We’ve created an ebook that summarizes and explains the key stats and consolidates all the resources we have on the topic. Read it here.

Online vs. In-person Shopping: How to Meet CPG Consumer Needs in Both Spaces

The way people shop has changed

According to our recent 2022 CPG + Grocery TrendWatch,^* consumers shop more online now, which has led to the explosion of ecommerce. Thirty-one percent of people say they’re shopping online more since the pandemic. The number is even higher for affluent shoppers (those with a household income over $100K), at 39%.

As smartphones have become ubiquitous, consumers are using them to shop, turning to brand apps to research, shop and complete transactions on their device right from the palm of their hand anywhere, at any time. Per our respondents, this is especially the case for segments including Gen Z (28%) and millennial parents (28%).

In addition, our survey found that subscription services and social media purchases appeal to younger generations and parents as an easy and convenient way to shop, especially for busy consumers.

Online vs. in-store: it’s complicated

Online shopping became a necessity during the pandemic, and as such the general comfort level with it appears to have increased, for both consumers and retailers. It’s efficient, easy and convenient. Despite the convenience of online shopping, a majority of our respondents indicated they prefer the overall experience of shopping in-store (51%).

In-store shopping gives consumers the opportunity to discover new products, finding what they need — and even making impulse purchases they didn’t know they needed! They also find it easier to use coupons and access discounts in the store than online.

It’s important to note, however, that our survey suggests that there a few significant generational and segment differences where these preferences are concerned:

Gen Z rates in-store and online shopping nearly the same when it comes to convenience meeting their needs (42% and 40% respectively), and equally for finding the items they need (36%)
Affluent shoppers report that online beats in-store on price (36%) and finding the items they need (37%), and even more so for saving time (64%)
Baby boomers say they appreciate the ease of using coupons and taking advantage of discounts offered by in-store shopping (72%)
When it comes to grocery shopping in particular, millennial parents (63%) say that they enjoy the online shopping experience more than most other consumer segments

Although our survey found that in-store shopping accounts for most purchases, there are a few observations worth noting for online shopping:

Millennial parents report that they make 23% of their packaged food and beverage purchases online — more than most other groups
Consumers make almost a quarter (23%) of their beauty/personal care products online — this increases to 32% for affluent shoppers
Pet food/pet care has the highest percentage of purchases made online, led by affluent shoppers as they make 37% of their purchases in this category online, followed by baby boomers (32%)

Delight shoppers wherever they are

So, what can marketers do with this information to ensure they appeal to consumers’ preferred shopping experience, be it online or offline? Start with these three tips:

1. Improve the online shopping experience

Retailers think they’re providing a better experience than they are. For example, 77% of grocers say they meet consumer needs for an enjoyable online shopping experience — but only 51% of our respondents agree. Review your online shopping procedure from first click all the way through purchase. But don’t stop there. Ensure the experience excels post-final click, all the way to delivery, including order status updates and return procedures.

2. Help shoppers plan their shopping

People are busy. They want shopping, especially shopping for essential products, to be a breeze — and it should be. Again, according to our survey, grocery retailers are not on the same page as consumers when it comes to shopping planning tools like printed circulars sent to their home, or interactive digital versions of the same. This is an opportunity for retailers to step up their efforts to provide helpful planning tools to shoppers who are keen on having an efficient shopping experience, whether online or in the store.

3. Prepare for the future of shopping

Technology continues to evolve with consumer needs — and so should the technology retailers use to facilitate and enhance the buying experience. It’s critical to know what your target segment(s) value in a shopping experience and be aware of technology trends that make it possible for you to deliver.

To learn more about what today’s consumers are looking for in a shopping experience, download our 2022 CPG +Grocery TrendWatch report.

*Vericast 2022 CPG + Grocery TrendWatch: consumer survey fielded April 2022 (n = 1,909), industry survey fielded April 2022 (n = 305)

Matthew Tilley is executive director of marketing for Vericast and leads content marketing for the company. He has more than 20 years of experience in digital advertising and consumer promotions to develop, communicate and distribute ideas to make modern marketers more effective.

“Ho, Ho, Ho!” or Just “Ho-hum?”: What to Expect From Consumers This Holiday Season

Not to sound too cliché but, the holidays really are “right around the corner.” And there’s no question the current economic environment has forced adjustments by both consumers and retailers. What’s different this year? How will it affect holiday spending? Which consumer segments plan to go all out this holiday season, and which segments will be reining it in?

To answer these questions, we asked consumers in our June Awareness-to-Action Study^* about their holiday shopping plans, preferences and priorities. Here are some highlights from the survey.

Let’s first take a look at how this holiday season is different than recent ones.

Inflation levels you can’t ignore

We must mention the elephant in the room: inflation. Record inflation continues to weigh heavily on retailers, consumers and the U.S. economy. Consumers are seeing evidence of inflation every time they make or plan to make a purchase. According to the Numerator 2022 Holiday Preview Survey, nearly 90% of consumers surveyed expect inflation to affect their 2022 holiday shopping and spending. And a majority (59%) expect the impact will be moderate or significant.

Supply chain challenges

Supply chain challenges persist, although they have improved since last year. It seems consumers are now becoming conditioned to the idea that their favorite brand or product may not be available and so may be preparing to identify a plan B to use if they can’t find the specific product they need.

Gas prices affecting travel

After months of high gas prices, consumers are finally feeling some relief — but prices are still much higher than they were just one year ago. This affects everything from holiday travel plans to holiday shopping trips to the store.

Uncertainty about COVID variants

The holiday season has a lot to do with gathering with friends and family. Presumably, consumers are learning how to live with and manage the reality of variants, waves and outbreaks of the COVID virus as a way of life. For some that means holiday celebrations may be a last-minute decision — either way.

What does all this mean for consumers and their shopping behavior? We asked them, and here’s what we learned:

They’re looking for deals

With a cloudy economic outlook hanging over their heads, consumers are focused on stretching their dollar further. They’re more attentive to prices — our 2022 CPG + Grocery TrendWatch^** notes that 61% of those surveyed say rising prices are their biggest shopping challenge — and they’re in search of a bargain. And according to our June Awareness-to-Action Study, when it comes to the shopping for gifts this year, 27% of consumers surveyed say they will look for stores that offer the best deals and sales.

They plan to spend less

Although some consumers surveyed indicate they plan to spend more this year, including Gen Z (32%), parents (27%) and those who are very comfortable financially (32%), it should come as no surprise that in general, people say they plan to spend less this holiday season than they spent last year (46%). This is in part reportedly due to consumers choosing to dine out less over the last few months of the year (41%), especially Gen X (47%) and those with limited financial means. But some consumers (21%), including Gen Z (37%) and those with more disposable income (35%), expect to dine out more this year than last year.

They plan to shop later in the season, some up to the last minute

Our survey data indicates people plan to delay their purchases this year. Slightly more than half of shoppers (53%) will begin their holiday shopping in November or December. Those who have a lot of savings and disposable income are more likely to get an earlier start to their shopping, prior to October (29%), while those experiencing financial challenges appear more likely to be last-minute shoppers, waiting until December to start making purchases (29%).

They plan to shop in-store and online

Some shoppers may be ready to browse the aisles again, going into brick-and-mortar store locations where they can see and touch merchandise, interact with salespeople and generally feel the hustle and bustle of the holiday season. Twenty-three percent of people we surveyed plan to shop more in-person for food and beverages for holiday parties and meals, while 14% plan to do more online shopping for these items. When it comes to shopping for gifts, 32% plan to shop more online, but 22% intend to shop more in person.

In light of consumers’ holiday plans, what can brands and retailers do to meet shopper needs and maximize the busiest, most profitable quarter of the year?

Deals, deals, deals

This one’s straightforward. Consumers are looking for brands that offer deals. In fact, 60% of respondents to our June survey say coupons and discounts are more important than ever. If you want to catch shoppers’ attention, give them what they’re looking for — offer a discount or special deal.

Engage in continual conversation

As indicated above, some consumers will begin shopping in October or earlier, while others will wait until November or December. Retailers and brands will have to work particularly hard to connect with consumers throughout the season since shoppers might shop late in the season or early due to myriad factors. Plan to extend your marketing throughout this year’s shopping period so you capture their attention when they’re planning and purchasing.

Use omnichannel marketing

There’s no single outlier when it comes to how consumers like to receive their deals, so a “one-size-fits-all” approach to marketing is not sufficient. Brands and retailers should cover their bases by engaging an omnichannel strategy that reaches their target customer at all the various places they may seek information about a product or brand.

Make it easy

Consumers will be shopping in the store and online, both in equally heavy numbers. Present them with a seamless experience, making it easy to access products and discounts wherever they plan to purchase.

To learn how the 2022 holidays will affect different industries and verticals, check out our series of seasonal recommendation videos and hear from our vertical specialists about making the most of the holidays this year.

*Except where otherwise noted data from the Vericast Awareness-to-Action Study, June 2022 (n= 1,835)
**Vericast 2022 CPG + Grocery TrendWatch: consumer survey (n = 1,909), industry survey (n = 305)

Couple engaged with print and digital media

Print Media Powers Digital Engagement

Print media in marketing refers to direct mail, postcards, flyers and print ads. It has distinct advantages in terms of marketing effectiveness and efficiency over digital marketing and digital advertising.

The U.S. Postal Service partnered with neuromarketing researchers from Temple University to study the difference in the impact of print and digital advertisements. The study ran in 2015 and was expanded in 2019. They discovered that people spent more time reviewing print media, and print ads, both visual and tactile, elicited a stronger emotional response and left a longer impression.

On the other hand, the study showed that digital media works better for focused attention. People spent more time on key components of a digital ad. And, of course, digital media is more cost-effective and can be executed faster.

Print media as part of an omnichannel strategy

The best approach is to use print and digital media as part of your omnichannel strategy. Digital ads are effective in delivering marketing messages quickly. Print media, such as direct mail, can then be used to emotionally connect with the target audience and drive them to act.

Print and digital marketing complement each other, and consumers want both to help them make decisions. Our Vericast Awareness-to-Action Study revealed that 47% of consumers like to receive offers from print and online media, so they don’t miss out on savings. Almost two-thirds of millennial parents said the same thing. Forty-six percent of consumers go online for more information after reading a direct mail ad, while 41% said direct mail ads prompted them to purchase online, with 55% of millennials agreeing.

Examples of print + digital media tactics

There are numerous opportunities to amplify print media with digital and vice versa. Here are some examples:

Run a display ad calling attention to check special offers in their mailbox.
Drive consumers receiving your direct mail to go online to use an exclusive coupon to make a purchase.
A/B test digital campaigns and use your findings to tweak your creative and messaging in direct mail campaigns.
Include a QR code or unique URL in your direct mail ad to track conversions and drive recipients online for additional information or an expansive experience.
Send out a mailer and follow up with an email reminder and retargeting ads.
Use a CTV ad to engage the audience and drive them to an online experience where they can opt in to receive mailings.

Ten use cases for integrating print media with digital

There are many situations when you can combine direct mail campaigns with digital campaigns as part of your omnichannel strategy. Here are 10 use cases to consider:

1. Welcome new customers

Wouldn’t it delight new customers if they received a welcome kit in the mail after buying something from your website? It can be as simple as a postcard with a trackable CTA to visit onboarding landing pages and instructions to complete missing account data. Since print media is a powerful vehicle for making deeper emotional connections, a direct mailer will make customers feel valued.

2. Build your list

You can send direct mail to prospects and existing customers to request their email addresses and other information. If you incentivize them with a special offer and drive them online using a QR code or unique URL to claim that offer, you may be able to get them to opt into your email list. It becomes easier to send follow-up offers via email or retargeting display ads.

3. Build brand awareness

People spend more time reviewing print media. You can send direct mail to connect with them with visuals and messaging that resonates. Your mailer can be a print catalog that shows your products in a lifestyle setting, allowing them to imagine themselves buying and using your items. Then include a CTA to visit your website for more information.

4. Drive people to act

Your prospects may be ignoring your digital ads and emails. Or they see them but do not act on your offers. You can reinforce your digital campaigns by sending postcards or direct mail as part of your overall campaign. You can remind them of the same online offer or give them an exclusive, time-limited coupon they need to redeem online. Unique codes can be used for different segments so you can track redemptions.

5. Build a local community

If you have local events, you can encourage online customers to participate in your community-building projects such as meet-ups, trade shows, or user clubs. Send them physical tickets.

6. Reach out to abandoned cart shoppers

You may have customers or prospects who abandon their shopping carts online. You can retarget them with direct mail if your digital retargeting ads are not driving results. Obtain mailing addresses and send a retargeting postcard with a coupon code or special offer to get their attention and bring them back online.

7. Retarget customers

You can also retarget your current customers with direct mail. You can send direct mail to first-time customers with cross-selling and upselling campaigns to turn them into repeat customers. You can send postcards to your loyal customers and reward them with special offers they can claim online.

8. Reengage inactive customers

Some customers have not bought anything from you for quite some time. Others may have unsubscribed from your email list. You can send a re-engagement postcard to inactive customers with discounts or announcements of new products.

9. Turn subscribers into customers

You may also have prospects who subscribed to your email list because of your educational content but never purchased anything. You can send them direct mail with an irresistible offer to prompt action.

10. Reward VIP customers

Send special messages to your VIP customers with offers, exclusive invitations, birthday greetings and branded gifts to keep them engaged, feel valued and encourage more purchases. A personalized approach can mean an even greater impact.

Work with the right partner

The most efficient way to integrate print media with digital into one omnichannel campaign is to work with a single partner that specializes in both, ensuring a cohesive strategy, consistent messaging and unified data points.

At Vericast, our Consumer Graph™ uses predictive intelligence to convert billions of consumer signals into meaningful action across online and offline channels. In addition to audience selection and mailing list procurement expertise, our print marketing solutions include direct mail packages, solo direct mail and Dynamic Postcards, and our national footprint includes over 88 million households — we offer one of the largest residential mailing lists available (You can also provide your own mailing list or customer data.).

You can build a campaign, integrating print with our online advertising capabilities, from display, video and connected TV advertising to email, social media and mobile ads.

Contact us and take your omnichannel marketing to the next level.

Everything Has Changed … Including the Way People Shop

By now, you know the story well: record inflation. High gas prices. Recession concerns. The current economic conditions are having a significant effect on the way consumers and brands operate, at a fundamental level. Consumers have adjusted their shopping habits. Brands must also adjust their strategies. The question is, how?

You’ll find detailed analysis in our 2022 CPG + Grocery TrendWatch report, packed with insight for brands looking to connect and deepen relationships with consumers in today’s unpredictable market.

We surveyed 1,909 consumers about their CPG purchasing plans, priorities and preferences. We also heard from 305 industry professionals (CPG, grocery, drug and mass). The report specifically homes in on four key consumer segments:

Baby boomers
Millennial parents
Affluent households
Gen Z

Below are some highlights of our findings. But there’s much more to discover, so for the full report, go here.

Baby boomers are preparing for the pinch

Eighty-three percent of baby boomers say the increase in prices is their biggest challenge when shopping for food, health and beauty, personal care or household products. Price comes in just ahead of the challenge of finding the products they need in stock because of shortages and supply chain woes.

Brands and retailers can help baby boomers by guiding them to stores where their favorite products are in stock and promoting quality private label products as an alternative to name brands.

Millennial parents crave convenience

Fifty-eight percent of millennial parents expect retailers to provide personalized promotions based on their purchase habits and interests.

Get to know millennial parents well, using data to distill their shopping patterns, product preferences and budget considerations. Then, build a shopping experience that speaks to their specific product needs and makes it easy for them to shop.

Affluent shoppers also seek quality and value

Forty-seven percent of retailers rate email as the most effective tool for sharing deals with affluent households.

Reevaluate your marketing strategy to ensure you’re incorporating email as a way to share deals and communicate with affluent shoppers.

Gen Z shops online — and with a purpose

More than any other segment highlighted in the report, Gen Z is looking for products that align with their social, environmental or political values. This is especially important when it comes to food products (21%) and beauty/personal care (22%).

Make sure your brand messaging emphasizes your brand values — and that you live out your brand values in a way that Gen Z can see and recognize.

Want to dive in deeper? Download the full report.

2022 Retail TrendWatch Video Series: Our Experts Weigh In On the Future of Retail

David Cesaro, Executive Director of Client Strategy

Tina Seitzinger, Senior Director, Influencer Marketing & Paid Social

Matthew Tilley, Executive Director, Content Marketing & Thought Leadership

Megan O’Gorden, Product Marketing Manager

Download the full report for more insight to see how people want to shop, receive deals and shape the future of retail.

Check our Retail TrendWatch and Consumer Pulse series to get into the minds of consumers.

2022 Retail TrendWatch Series: As the Future of Retail Shifts, Shoppers Have High Expectations

2022 Retail TrendWatch Series: Splurging, Saving and Saying I’ll Do It Myself

2022 Retail TrendWatch Series: Do Your Values Match Your Value?

2022 Retail TrendWatch Series: Know Your Customers

2022 Retail TrendWatch Series: Old School Plus New School Equals Success

Consumer Pulse Series:
The Fierce Battle for Consumer Loyalty Infographic

How Do Your Personal Spending Habits Match Consumers’ in 2022?

2022 Retail TrendWatch Series: Old School Plus New School Equals Success

In our recent report — 2022 Retail TrendWatch — we uncovered insight from 1,840 consumers and 268 home retailers. Consumers provided their spending priorities and buying outlook for 2022, while retailers shared their insight on the biggest marketing and operational challenges in 2022.

Mobile + mailbox

Did you know 70 percent of people go online to purchase or research a product after seeing a print ad? The power of print can supplement your digital strategy.

Everyone has their favorite

Retailers have their favorite ways to get the word out about their brand and products. Consumers also have their preferred methods to learn about new brands and products.

Retailers love the effectiveness of social media but consumers value what they see and read in print.

Social causes a shift but doesn’t dominate spend

According to our retail industry survey, digital, print and social will see the greatest increase in media spend.

54% plan to increase social media spend
53% plan to increase digital media spend
40% plan to increase print media spend

However, print and direct mail still represent most of the total media budget.

Tell me something new

When it comes to shopping at a new store or website, every generation is swayed by something slightly different.

Learn more by reading the other blogs in this series: Do It Yourself + Treat Yourself, Value + Values, and Relevancy + Immediacy. You can also download the full report for more perspective, stats, action items, and recommendations.