Consumer Spending Trends Reflect Demand for a Return to Normalcy
When Amazon.com Inc. (Tii:AMZN) released its shopping data last month, the world’s largest online marketplace highlighted the changes in consumer spending brought about by the pandemic. The annual report provides a snapshot into not only what Americans are buying but what they’re doing.
In 2020, consumers focused on items for the home – home entertainment, cookware, gardening tools, stationary bikes and other equipment to stay fit while indoors. This year showed a significant shift with increased spending toward social interactions, travel, athletic apparel, and personal hygiene products.
Here is a look at what else consumers are spending their money on in 2021.
Hitting the Road
After last year’s lockdowns, consumers were more than ready to take to the roads or skies for some long-overdue vacation fun. Amazon reported that luggage sales increased a mind-blowing 460% this year. This demand is good news for Samsonite International SA (Tii:SMSOF), the world’s largest travel luggage company. The Samsonite Omni Expandable Luggage with Spinner Wheels and Samsonite Omni Expandable Luggage were among the most popular for shoppers on the online marketplace. Though net sales for the six months ended June 30, 2021, declined 3.2% for the luggage maker, Samsonite remains optimistic, citing increased demand for domestic travel in the U.S. on the heels of the vaccine rollout.
Bringing the Kids Along
As Americans take to the roads, demand for car seats and strollers skyrocketed, with Amazon reporting sales increases of 70% and 50%, respectively, as of April 2021. Dominating this space is Graco Inc., a subsidiary of Newell Brands Inc. (Tii:NWL). Best-selling car seats on Amazon.com include Graco Tranzitions 3 in 1 Harness Booster Seat, Graco 4Ever DLX 4 in 1 Car Seat, Graco SlimFit 3 in 1 Car Seat, and Graco Affix Highback Booster Seat. Among the best-selling strollers were Graco DuoGlider Double Stroller and Graco FastAction Fold Jogger Travel System.
Prepping for Facetime
With Americans resuming social interactions, toothpaste, whiteners, and mouthwash sales rose 66% in April 2021 compared to January 2020. Meanwhile, premium lipsticks sales increased by more than 58% year-over-year as of April 2021. Among the products shoppers added to their carts was Colgate Optic White Renewal Teeth Whitening Toothpaste. Boasting a 39.3% market share, Colgate-Palmolive Company (Tii:CL) is the largest producer of toothpaste, followed by Crest, a Procter & Gamble Co. (Tii:PG) brand. Recent demand for Colgate-Palmolive’s dental products resulted in a 9.5% increase in second-quarter sales.
Bridezillas are Back
Amazon’s wedding and gift registry has more than doubled this year compared to 2020 as birthdays, matrimony and other celebrations make their long-awaited return. Among the best-sellers on wish lists and wedding registries is the KitchenAid 5-Speed Hand Mixer, manufactured by Whirlpool Corporation (Tii:WHR), and the Roomba by iRobot Corporation (Tii:IRBT). The leading global consumer robot company, iRobot has sold more than 350 million robots since the introduction of the Roomba in 2002. iRobot recently reported that second-quarter revenue grew 31% despite pandemic-related disruptions in its supply chain.
Athleisure is Here to Stay
A holdover from last year is consumer demand for athleisure wear. After spiking in 2020, Amazon’s athleisure sales increased by more than 50% year over year in March and April 2021. Among the most popular are Champion Men’s Powerblend Graphic Jogger. Hanesbrands Inc. (Tii:HBI), Champion’s parent company, expects 2021 sales for the Champion brand to reach $2 billion. The company also announced plans to invest in certain markets and expand product lines to grow Champions into a $3 billion brand by 2024.
These buying trends, which mainly represent pent-up consumer demand to return to their normal lifestyles, are expected to continue for the near term, creating opportunities for companies and investors alike.