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How Lifestyle Changes are Shaping Retail in the Age of COVID-19

    

According to Nielsen reports, shopper behavior is similar across many states despite varying guidelines for reopening businesses. Online shopping is still king with 50% more buyers each week compared to pre-COVID-19 levels. Click and collect is up by 84%, while home delivery is up by 47%. 

Walmart is still the top seller of groceries with the retail giant reporting a 74% growth in U.S. eCommerce sales in the first quarter of this year, showing strong results for grocery pickup, delivery, Walmart.com, and marketplace. Instacart is also experiencing tremendous growth with a ballooning weekly market share that reached a high of 57% in April.

As to be expected, shoppers are still pantry-loading but in moderation compared to a month or two months ago. In the week ending May 23, 2020, basket values remained high at a 3% increase while channel penetration and frequency trends are in line with pre-COVID-19 levels.

But bulk buying and online shopping aren’t the only lifestyle changes fueling category trends. With social distancing, restrictions on businesses, and many people transitioning to working from home, certain categories are experiencing an explosion in growth.

  • Health and beauty are on the rise, showing pronounced share shifts online during this period. Overall, US health and beauty sales increased by $3.74 billion from a year ago to $32.2 billion. With many still hesitant to visit salons and barbershops, people are doing facials, hair, and nails at home. Online sales of nail polish more than doubled from $14 million to $35 million. Philips saw a 45 to 50% surge in demand for its men’s and women's grooming products in May.
  • Home fitness and gym equipment are in high demand. Sales soared as much as 130% last May with weight training being the 8th fastest-growing category. With most gyms still closed, many are going online to shop for home gym equipment. This has led to a steep increase in demand and a long waitlist. For example, there's a kettlebell shortage in New York.
  • Bicycles are also in high demand as people look for ways to stay entertained and fit during the pandemic. Sales of adult bikes rose by 121% amidst a shortage of bikes and bike parts due to shutdowns in Asia.
  • Pool sales are up 161% compared to the previous year. Sales for outdoor and sports toys like swing sets and trampolines are also up while public pools and community spaces are closed or risky to visit.
  • Slipper sales doubled in April as more Americans opted for comfortable footwear. Brands like Uggs and Crocs have become "super hot" items in recent months. After all, no one will notice your footwear during a conference call.
  • Baking-related categories still show top growth in the week ending May 23, 2020. With more people cooking at home, baking supplies sales are up by 98%, dough and batter products are up by 62%, and coating mixes are up by 63% compared to a year ago. 

On the flip side, certain categories are seeing a decrease in growth as people shift their lifestyles.

  • Summer essentials categories are in decline. Understandably, the sun care category suffered a -29% decline compared to a year ago. 
  • Tobacco and tobacco alternatives are down. British American Tobacco, the makers of Lucky Strike, reported that revenue growth was between 1% and 3% in 2020 compared to the previous year of 3% and 5%. Tobacco alternatives are also seeing a decline in the week ending May 23, 2020, at -27%.
  • Some surprising categories are seeing a decrease in sales. Surprisingly, reading and hobby categories are down by -28% as well as meal combos, which had the highest drop at -35% compared to last year.
  • Sales of men’s and women’s dress shoes down by 70% in March and April. Sales of heels and loafers were already dropping, but this pandemic has sped their demise. Americans are opting for practical and comfortable footwear as they transition to a work-from-home lifestyle.

The Bottom Line

As more states reopen businesses, it's becoming more apparent that many shoppers may be hesitant to go back to old habits quickly. According to a segmentation study, 56% of Americans consider themselves at medium or high risk for contracting COVID-19. So it's understandable that many are playing it safe and choosing to do more at home, whether it's a haircut or staying fit.

If you have any questions about how to stay ahead at Walmart or Sam's Club, please reach out to us. You can contact us here.