There’s a period that runs roughly from December 26 through mid-January, dubbed “quarter 5,” that helps retailers and CPGs tackle their end-of-year goals while setting them up for the year ahead. While many take a step back from work after a successful holiday season, there are a few more weeks of sustained growth to be enjoyed.
“It’s this secret time period… where consumers are open-minded to new purchase behaviors and habits,” Brian Spencer, marketing director of Kroger Precision Marketing at 84.51. told The Food Institute.
“[They’re] thinking about resolutions and all that post-holiday activity such as returns, gift cards, and grocery stock-up trips.”
Consumer willingness to experiment is key for CPGs and retailers looking to merchandise higher-margin specialty products.
Moreover, New Year’s resolutions contribute to consumers’ desire to eat more better-for-you or wellness products. However, Spencer warned that too often retailers lean heavily into these areas, thus saturating the market while everyday essentials and “pantry and fridge staples” get overlooked.
A strong final quarter also signals an optimistic year ahead. Spencer noted how 2025 will elicit opportunities across the value chain.
“It’s going to be a period where we see brands investing more in bringing value back to shoppers,” he noted, an area of focus for retailers and brands alike, however, a tenet where these stakeholders tend to struggle.
Next year, too, Spencer opined that companies of all sizes will use data in new ways to improve shopping experiences, from discovery to consumption.
E-Commerce in the New Year
By 2026, analysts project digital grocery sales to account for roughly 19% of U.S. e-commerce, reported eMarketer; therefore, a well-defined omnichannel strategy should be top-of-mind for industry stakeholders.
CPGs, especially smaller makers, should also consider how they can continue to influence purchase decisions on the digital shelf through retail media network partnerships as the grocery shopping environment continues to bifurcate.
Spencer noted a phenomenon wherein online grocery purchase behaviors tend to be more “hardened” than brick-and-mortar shopping. Therefore, the onus often falls on the retailer or marketing channel to balance shopping ease with exploration.
For Kroger, the e-commerce experience leverages prioritization science and shopper data to show consumers what they typically buy for their household while creating relevant opportunities. One key method involves prioritizing product diversity on the product search page.
“We’re going to be showing you products that are a little bit more inspirational to drive some of that serendipity into the online shopping experience,” Spencer said. “In the grocery e-commerce space, 95% of our top 500 search terms are categories, not brands.” This creates plenty of touchpoints for brands to interact with consumers.
Quarter 5 E-Commerce Opportunity
The end of the year also allows smaller brands to inspire trial, particularly in e-commerce.
“It’s a window of opportunity for smaller brands to win new sales because there are a lot of e-commerce marketing managers that ‘fall asleep at the switch’ from the day after Christmas,” he noted.
The change of the calendar year also makes it conducive for challenger brands to gain ground as many larger brands have their budgets set on an annual basis, so marketing dollars have likely run thin by the end of the year. More agile, earlier-stage companies, however, may have more flexibility when it comes to their spending budgets.
For Kroger, the data elucidates January’s e-commerce value proposition – consumers added 21% more to carts and fulfilled 16% more orders compared to 2023 averages. Website visits also were up 8% over the period.
A word to the wise: don’t sleep on quarter 5 and how e-commerce can bolster end-of-year gains while setting a business up for an excellent year ahead.
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