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PowerReviews Market Trends Snapshot – October 2020

Keyword: office 
Modified Description: A group of people wearing face masks in an office.

“New normal” continues as Holidays loom

Consumer behavior has clearly become more predictable, with purchase volumes consistently consistently at around 1.4x to 1.7x where they were at the start of the pandemic.

Why? Most likely because the entire population has settled into a “new normal”. People are no longer buying in the bulk they were because they have confidence in supply chain and product availability. They know they will be able to source whatever items they need at short notice. Pandemic life has become normal. We are now used to buying our groceries and other everyday items online. This is reflected in our recent survey, which highlighted how 33% of consumers say their shopping habits have changed forever.

We expect the next major shift to be the Holidays. It’s difficult to predict what these will look like this year but – and this is perhaps not the most groundbreaking observation – we are predicting significantly more spending occurring online than in previous years. In fact, the survey highlighted above illustrated how 64% will spend more online than the last Holiday season. Perhaps of more significance is the timing of this Holiday spend. Our survey also shows that three-quarters will start Holiday shopping earlier than they usually do. So we anticipate notable increases in activity to start over the next month.

Continued stabilization in both online sales and site traffic

Continued stabilization

Review submission volumes flat for three straight months

After reporting a giant 2.3x leap in review submission levels from April to May, we subsequently highlighted a consistent drop through to August  to the point where levels are now consistent with what we saw pre-pandemic. This again continued for the last month.

We hypothesized previously that this is most likely because consumers have now got to the point where they are no longer buying items they hadn’t tried before. Instead, they now have established product preferences so are less inclined to be motivated to submit reviews.

In terms of the actual content of reviews, there have not been any huge shifts over the past six months. Both have been unaffected by the pandemic, which is unsurprising because overall product catalogs themselves will not have shifted too significantly. 

No significant variations in review submission levels

No significant variations

Review length and sentiment flat throughout pandemic

Review length and sentiment

Reviews more important than pre-COVID, will become increasingly critical for Holidays

Review content is  more influential in driving purchase decisions than it was before the pandemic. A higher proportion of those who interact with reviews are going on to purchase than were doing so pre-COVID.

The August high of 45% above pre-COVID levels was virtually identical to the July high (43% above). As you will note from the scale of this chart, we saw similar numbers through September.

As thoughts turn to the Holidays, this trend is only likely to be accentuated. Our Holiday Survey highlights how 37% of shoppers will pay more attention to ratings and reviews this year than last when making purchases. 

When we segmented out consumers who will increase spend this year, this trend was even more pronounced. 25% of this group will be more influenced by ratings and reviews this Holiday season (this is compared to the 19% who say they will increase spend overall).

Reviews still convert shoppers to buyers more than they were pre-COVID

Reviews still convert shoppers

The story for the October snapshot is that it has proven to be the fourth month of continued stabilization. Trends are now very flat so we can confidently say we are now in a COVID-driven “new normal”.

However, the Holidays – the biggest time of year for ecommerce and retail – loom large. Our research indicates, predictably, that this will be the biggest Holidays ever for ecommerce.

Two other key findings in our Holiday report are particularly worth noting though:

  1. 73% say their Holiday spending will either be consistent with or increase in comparison to last year. In the context of overriding economic conditions and uncertainty, this is surprising. But the reality is people have not been spending money this year (e.g. bars, restaurants, movie theatres and other entertainment outlets have been off-limits) and are looking for a lift. Either way, this is good news for brands and retailers.
  2. Shopping will start earlier than normal – given this has been an objective of the entire industry for years, it will be music to the ears of brands and retailers looking to cash in after a difficult year for many.

With this being the case, we expect ecommerce traffic and sales to increase through October in the run-up to the Holiday season.

This article originally appeared by our friends at PowerReviews.

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