In 2020, Easter presented a unique challenge for brands as the first major holiday deeply affected by the nascent pandemic. With lockdown measures setting in, the confusion of the holiday coincided with a number of product categories—particularly candy and other groceries—that were experiencing an uptick amidst panic buying.
This year, while there is just as much uncertainty surrounding consumer habits, the outlook is optimistic, and optimistic around much broader categories. The difficulty in prediction is that 2020 comparisons are unreliable because the conditions are so vastly different than this year, and 2019 comps fail to recognize an entire year of totally altered buying habits. The fact remains, however, that Easter 2021 represents a wealth of opportunity for CPG brands; with vaccinations being distributed, Spring weather taking hold, and a full year of lowered spending on restaurants and travel, the potential for major gains this holiday are substantial.
The crucial strategic move for brands in 2021 is not getting gun shy and reverting to old habits of broad-based, deep discounts if sales figures aren’t on pace with pandemic-buying levels. During the lockdown, buying habits in many CPG categories didn’t require any kind of pricing and promotion strategy. Rather, brands were struggling with supply chain hiccups to keep up with massive demand. It’s to be expected that the demand of pandemic buying will wane in certain categories—groceries in particular—but that shouldn’t be seen as a reason to return to the old method of blanket discounting. By keeping promotions surgical and focused, brands can maximize margins to fully cash in on Easter.
A Basketful of Potential Across Multiple Categories
Just to reiterate, the potential this Easter really is substantial. According to a National Retail Federation and Prosper Insights & Analytics survey, consumers in 2021 plan to spend a collective $21.6 billion this Easter, which is nearly $180 of average spend, and the most projected spend surrounding the holiday in history.
The confluence of vaccine distribution, newly distributed stimulus money, and a year of decreased buying has put large sums of potential spending power in the hands of everyday Americans. Where they spend their money might be even more varied this year, however.
In the past, the largest categories during Easter shopping season were in candy, groceries, and gifts. In fact, more than 30 percent of total seasonal candy sales come from the holiday. More than half of all consumers celebrating the holiday are planning some family meal surrounding Easter as well which, even as restaurants begin reopening, represents billions of dollars in grocery sales. As far as gifts and other Easter-related items are concerned, nearly half of consumers plan to purchase their goods from discount stores, and moreover, the amount of goods purchased online is projected to jump to 35 percent, up seven percent from 2020.
What’s interesting about Easter in 2021 is how it may serve as an inverse to the shopping season at the same time last year. While pandemic-fueled grocery buying propped that industry up, other sectors, particularly clothing retailers, struggled into the spring. This year, as we’re beginning to emerge from the pandemic—and perhaps some weights have fluctuated over the course of a year of not buying new clothes—consumers may begin spending their disposable income preparing for increased social activity. Some survey results suggest that more than half of those not celebrating Easter still plan to take advantage of the holiday to make other purchases.
Targeting Strategy to Maximize Margins After such an unpredictable year, the drive to maximize sales is strong, particularly among sectors that may have struggled throughout the pandemic. The important thing to remember is that sales can’t exist at the expense of margins. Of course there’s value in getting a customer in the door with a deep discount, but issuing blanket offers to serve customers who will only buy at 30 or 40 percent when there are customers motivated to buy without a discount at all is throwing money away.
One lesson that many brands learned in 2020 was that when demand exists, promotions aren’t nearly as essential. With a population emerging from lockdowns, and with cash on hand, is likely going to fuel demand in sectors that lagged throughout last year. Brands and retailers need to focus their price and promotion strategies to those who require extra motivation, with a trust that demand will be there.
Using dynamic pricing tools and leveraging artificial intelligence and machine learning can make all the difference in dictating a discounting strategy that puts margins first. Many brands are coming out of a windfall year in 2020, which is enabling investment in these tools of the future that take data-driven insights and translate them to actionable strategies on the consumer level.This investment is being particularly felt in more established industries that have emerged from last year with more focused attention paid to their e-commerce offerings than ever before. Predictive analytics tools like RevTrax’s Predictive Purchase Data give brands the ability to target customers based on a number of factors from price sensitivity to time of day they’re most likely to make a purchase.
Through understanding consumer behaviors and avoiding some of the pitfalls that have plagued brands and retailers in the past, the Easter shopping trends in 2021 could make it the biggest season ever. And, when margins are maximized, everybody stands to reap those benefits.
Are you interested in maximizing your margins this Easter? Get in touch with a RevTrax expert today to discuss how our Offer Management Platform is revolutionizing the industry.