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Retail Categories Thriving with Homebound Customers

by Anna Ngo
There’s no denying it. COVID-19 is here, and its impacts on consumer spending and the global economy are going to be felt for a while, perhaps the rest of 2020.

Not all of the effects have been negative, however. According to analytics firm Quantum Metric, US retailers with both brick-and-mortar and eCommerce channels experienced a 52% growth in online revenue between the fifth and eighth weeks of 2020 (January 27 to February 23), which coincides with when the virus began spreading rapidly outside Asia. These omnichannel retailers also saw an 8.8% lift in conversions compared to the same time last year.

While analysts don’t believe the surge in eCommerce will fully mitigate lost sales from an overall decrease in shopping, not every product category faces the same risk. Many remain resilient, even in the most uncertain times. Even though discretionary shopping has seen a substantial downturn due to the ongoing coronavirus pandemic, people still need things, so they are still buying things. What are they buying?

The things you’d expect. In bricks and mortar, grocery stores, mass merchants like Dollar General and club retailers like Costco have benefited from widespread panic buying. People are stocking up and often hoarding shelf-stable foods and household essentials, including cleaning supplies. According to Forbes, categories prone to increase during self-isolation are health and beauty, grocery and consumer product goods. 

Online Spending Patterns

When it comes to online shopping, many of the same trends hold true. According to online selling tool Sellics, the top 5 categories on Amazon in the US at the moment are grocery, appliances, health and household items, toys and games, and outdoor home improvement, in that order. For the next month, Amazon is also prioritizing what it sees as essential products associated with childcare, health and household, personal care, grocery, scientific supplies and pet care, so supply here of course impacts what’s selling.

Similarly, online shopping trends seen in the US, Germany and Italy include groceries and home basics, survival shopping, backyard betterment, entertainment and activities, indoor fitness and solo outdoor sports, home office and bringing the outdoors in. The common theme between these trends appears to be making quarantine both possible and bearable, as many expect to remain homebound until the end of May.

Here’s our take on the reasons behind some of the strongest-performing categories:

Health and Beauty: When things are bad, people need to feel good more than ever, so even during a depressed economy, discretionary spending on small but nonessential items for a pick-me-up, aka retail therapy, persists. Some people call this the “lipstick phenomenon.” 

But a big part of feeling good isn’t just looking good but actually being well, so this is driving an increased interest in preventive self-care, particularly with healthcare institutions currently being overwhelmed. In addition to dietary supplements, oral care and sports nutrition, consumers are buying products for at-home pampering because they can’t get to their hairstylist, barber or spa. These range from hair dye and pedicure supplies to facial masques and, yes, face masks and hand sanitizer.

Games, Toys and Entertainment: With so much time cooped up at home, consumers are buying products to keep themselves and their children sane. Some of this is online media—streamed movies, music, eBooks and games—but people are also returning to real books, board games, and fitness and sporting equipment that can be used in backyard spaces. Many families are trying to embrace the forced time together as an opportunity to bond and reconnect. Sales for the Echo Dot smart speaker with Alexa, a multigenerational favorite, also remain strong.

Baby Care and Pet Care: A common theme seen on Amazon is “care,” whether that’s for yourself (see Health and Beauty), your pet or your child. Families or households are now self-contained bubbles, and caring for each member, especially when you can’t easily get to the vet or even the doctor, is paramount. And no one wants to risk running out of diapers. Likewise, toilet paper and adult diapers have seen a sales spike.

Home Appliances: More time spent at home means more cooking at home and a greater need for appliances that keep kitchens humming, from coffeemakers to Instant Pot pressure cookers. Items like air fryers, waffle irons and even sous vide devices are also helping amateur cooks re-create that restaurant experience at home. Roombas and Dyson vacuums are popular choices for keeping homes habitable. In the midst of all the chaos, clean brings calm to many.

Outdoor, Garden and Patio: Kind of a no-brainer. Even though “at home is safer,” the protective bubble extends to your property boundaries. Those of us lucky enough to have a backyard are going to be spending more time in it, so why not beautify it? Gardening, DIY and home improvement projects give those with pent-up nervous energy something productive to do, especially those unable to work from home. Sunshine and fresh air are obvious morale boosters for those in need of a feeling of normalcy.