The Retailer Summer Edition 2022

THE RE TA I L ER

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PATH TO PEAK 2022

Justine L'Estrange Strategic Insights Manager Google UK

W ith retailers facing an uncertain macro economic environment and significant changes in consumer shopping behav iour, how should they prepare for Peak 2022?

2. Consumers are increasingly open to trying new brands As well as being increasingly undecided, retail consumers are now also more experimental and open to trying newbrands than they have ever been before . Put another way, the consumer is becoming increasingly promiscuous when it comes to their shopping behaviours. In the fashion sector alone, the proportion of shoppers who had tried a new brand jumped from 24% in 2020 to 34% in 2021 and is now at an incredible 51%. We also saw a similar trend playing out across all of the other retail categories that we studied. Of course omnichannel shopping is not a new trend, but many advertisers still don’t appreciate the extent of how much things have changed. As an example, searches for “shopping near me” have tripled in the past two years. And here in the UK, a third of retailer consumers decide what they are going to buy in store, by browsing online before they even get to the shop. Most retailers have been trying to improve their digital presence, and the good news is that our research suggests these efforts are paying off. We have been regularly tracking shopper sentiment towards online and offline channels over the last 2 years, and have been seeing significant improvements in the perception of the online retail experience. More shoppers now say “browsing for products” and “the ability to compare” is better online than it is in store for example. 3. Omnichannel shopping is more pervasive than ever

To support retailers in understanding the changing retail consumer, Google has invested in new research with Trinity McQueen, to provide you with some unique insights on how best to show up for your con sumer this Christmas. It’s alsoworth noting that this year, surging inflation, ongoing pressure on supply chains and concerns about the geopolitical situation, are putting extraordinary strain on the retail sector. And the impact on consumer behaviour is already showing up in our search data. For example we’ve seen a sharp drop in searches for big ticket items like ‘homes for sale’ and ‘cars for sale’, an increase in searches for ‘how to save money on gas and electric’ and increasing searches across the UK for foodbanks. It's a very difficult time for consumers and retailers alike. Shopper behaviour has also changed drastically in the last couple of years as the pandemic has changed the retail landscape. We know we can’t predict how the rest of 2022 will play out on a macro level, but here we try to give retailers some more clarity on how their consumers have changed in the last few years, and the opportunities this presents for growth this peak season. 1. Window shopping is here to stay Whereas in the past, we’d see more searches for what we call ‘branded queries’ such as ‘charlotte tilbury foundation’, or ‘ikea sofa’ for example - over the last couple of years, we’ve seen significant growth in more generic types of searches such as “natural foundation” or “best sofa”. Effectively consumers are no longer coming online with a brand in mind, but they're actually increasingly using the internet to be inspired and to discover, and coming to shop without a specific brand in mind. These online window shoppers are also relying more on visual touch points such as Google Images or the shopping tab on Search, for visual inspiration to help themmake a purchase decision. In our study, we found 62% of retail consumers who use the shopping tab in Google Search do so to compare similar products from different retailers. Video is also becoming an increasingly critical part of this inspiration phase, with more and more consumers turning to channels like YouTube to help them make purchase decisions: in fact 88% of shoppers agree that YouTube makes it easier to decide what to buy.