Along with a sense of interminable doom, this year has given us many things; some more welcomed than others. One of the consequences (or blessings, depending on how you look at it), is the development and shift in customer purchasing habits and behaviours. This shift has resulted in brands and agencies alike having to pay particularly close attention, especially in the lead up to the festive period. It’s clear to see that customer spending habits have moved from a ‘want’ to a ‘need’ economy, which may not come as much of a surprise to those who have seen this unfold in real-time. What is a surprise, however, is the five new shopper segments that have emerged as a result.

According to analysis by Nielsen, there are five new customer segments to be mindful of when navigating this new, uncertain, and tumultuous landscape. These segments have transpired either as a direct consequence of customers not being able to physically go out and purchase, or as a pre-emptive reflex of financial uncertainty…call it your wallet’s survival instinct, if you will.

The new segments to pay close attention to are:

1. Constrained and restricted: Those whose wallets have directly been affected due to Covid-19, and have less overall freedom of movement due to restrictions in their local areas or city
2. Constrained but free: Same financial position as the restricted group, but their overall movement is less restrictive, and are therefore able to hunt down the right products and price points to suit them
3. Cautious middle: Have not yet been affected financially, but are pre-emptively changing their purchasing habits in anticipation, e.g. being selective about who they buy presents for or buying less
4. Insulated but restricted: As with the group above, this segment has not been impacted financially but, due to restrictions in gatherings, their consumption habits are likely to shift to prioritise themselves and those closest to them as a way of making up for other restrictions, e.g. inability for long and short-haul travel
5. Insulated and free: Not affected financially or physically, but their festivities are likely to be affected as a result of restrictions applied to their friends and family, and are therefore more likely to showcase frivolous and sporadic spending patterns

With these new segments being identified just before the festive period, brands will need to pay closer attention to their festive marketing strategies and determine the purchases customers are likely to make for their nearest and dearest. It’s important to be mindful that each segment is likely to experience turbulence in its own unique way, and will experience concerns unique to that group. Therefore, purchasing etiquette will no doubt vary from segment to segment in ways we haven’t experienced before. A blanket approach to targeting will not cut it in this instance.

Lauren Fernandes, Director at Nielsen Intelligence Unit, predicts that due to the uncertainty we’re faced with, “shopping decisions during the holiday season will be ultimately guided with a priority on the self and what customers think they could use or enjoy within their households.” What this means, in layman’s terms, is that we’re more likely to spend on that new kettle we’ve been meaning to replace (or even add it to our Christmas list), than a new outfit or beauty product.

There has been a slow, but continuous, shift from an economy of short-lived, throwaway purchases, to one of more practical necessities. What this means for the future of the retail industry in the long term, however, is something that will only become clear as we watch it unfold.