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4 Insights for the 2020 Holiday Season
With the global COVID-19 pandemic massively disrupting retailers and leading to increased e-commerce, 2020 promises to be a shopping season unlike any we’ve seen before. New shopping patterns have rendered retailers’ old holiday playbooks futile, and it’s difficult to imagine a sharp turnaround in consumer sentiment and spending until employment and income return. In spite of these generational shifts, the winter holiday shopping season in the U.S. remains the most important time of the year for most retailers. With the holiday season right around the corner, Sia Partners decided to explore 2020’s online retail insights - here are 4 holiday sales predictions advertisers and brands need to know.
Uncertainty and unrest has not only changed where consumers are looking to spend their money but how they intend to make their purchases. Consumers are eager to fill their baskets knowing that another outbreak in the pandemic could shut down supply-chains and leave them without the holiday joy they are longing for. Along with an increase in e-commerce and a rush to get ahead of holiday shopping while inventory is still vast, 47% of planned shoppers expecting to use options to buy online, pickup in store/curbside pickup. The convenience of online shopping combined with the peace of mind of knowing the perfect gift is available for local pick up has shoppers clicking “buy” then planning their in store pick up around low traffic times avoiding crowds, with 60% of shoppers planning to make fewer trips to stores.
As consumers strategically plan their shopping with “buy online and pick up in store”, a larger portion will move online during the 2020 holiday season. Deloitte's annual holiday retail forecast estimates a 25% to 35% year-over-year increase in e-commerce sales during the period, resulting in up to $196 billion in e-commerce revenue in the months between November through January. However, total year-over-year holiday retail sales will only increase between 1% and 1.5%. Surveys commissioned by Google show that more than a third of U.S. shoppers who have previously shopped in-store during Black Friday do not plan to buy the same way this year. This aligns with trends seen earlier in the 2020 when in-store foot traffic declined dramatically as a result of the pandemic. Shoppers continue to avoid crowded stores and will find means of purchasing what they need online. Facebook’s holiday season insights also point to the trend of shoppers spending more online during the holiday season, reducing their trips to brick and mortar stores.
Though in-store revenue sales are expected to shrink year-over-year this holiday season, industry insights show that in-store shoppers will more likely shop closer to home and support local businesses. Google search data shows more than a 100% year-over-year increase in search volume for stores and products “available near me”, showing that shoppers want to ensure that items they are searching for are in-stock by the time they arrive in the store; put simply, consumers will want to spend less time browsing in-person. With these expected changes in where consumers are shopping this holiday, brands must shift and adapt accordingly, such as shifting marketing budget towards digital channels to target online shoppers, preparing for the logistical challenges of dispatching larger volumes of shipments, and ensuring their website data accurately reflects in-store inventory.
With online shopping on the rise, a great number of retail outlets are shifting away from the traditional “doorbuster” shopping model in favor of a less disorderly and more socially-distanced approach. Many consumers plan on starting their shopping well before Black Friday and are looking for gifts that fit their current lifestyle. Kantar surveys show 69% of holiday shoppers will shop earlier to avoid an item being out of stock. Retailers are adjusting their strategy to adapt to these new shopping preferences – offering more of what customers want now, and earlier than ever.
Both Walmart and The Home Depot have announced that they would be “reinventing” Black Friday and offering sales starting in early November, both online and in store. Target, Macy’s and Nordstrom are expected to take similar tacks, the Wall Street Journal reported. Following Alibaba’s lead with “Singles Day” (the world’s biggest shopping event - November 11), ecommerce giants are also pushing the idea of celebrating an October shopping festival, or a “new shopping holiday,” with aims to shift consumerism earlier in the year.
Though the 2020 holiday season quickly approaches, changes seen across consumer behavior and brand marketing are here to stay. In spite of economic, political and health uncertainty in the US and around the world, consumers can see a light at the end of the tunnel and will end 2020 with new habits, including a greater reliance on online retailers to meet their needs. Now is the time for brands to embrace, adapt, and evolve with these changes.