As shoppers find their way through an unprecedented fall, the seasons will turn once again and the holidays will be upon us.
Deloitte’s annual holiday projections show that ecommerce sales will grow by 25% to 35% year over year compared with sales increasing by 14.7% in 2019. At the same time, total holiday retail sales for November-January are relatively low and only likely to increase between 1% and 1.5%. These numbers clearly reflect the pandemic’s impact as well as ecommerce being the beneficiary of these unprecedented times.
Annually, Digital Commerce 360 and Bizrate Insights surveys 1,000 online shoppers in early September to gauge their sense of the season ahead. The numbers are always of interest but the shopper intent may be even more insightful. With each section, a bottom-line statement sums up the situation and/or the opportunity.
The pandemic will likely push online shoppers to complete even more of their gift purchases online as 77% of online shoppers intend to purchase more than half of their holiday gifts online. Taking it one step further, 89% of shoppers will buy at least 25% of their holiday gift purchases online.
Bottom Line: One can only conclude based on this year’s events that online shopping is more effectively accommodating shopper needs, helping to ensure its overall growth now and in years to come.
When asked, “How will your spending for the holiday season be impacted by the election, pandemic and other news stories?” 66% of online shoppers don’t anticipate any change in their holiday spending despite varied sentiments around current events. That includes 36% who consider themselves nervous and another 29% who suggest they are not worried. The remaining 35% who are nervous indicate they will spend less than originally planned.
Bottom Line: Retailers will need to closely monitor behavioral ebbs and flows in a fourth quarter likely fraught with volatility.
Almost half of shoppers will buy most of their gifts online and shop early, pending expected delivery challenges. Online will be the beneficiary of a strong 2020 holiday sales gain as 26% of those surveyed expect to make limited physical store purchases. Along with more online purchasing, shoppers will be buying earlier, knowing that deliveries may take longer than they have in the past.
Bottom Line: Retailers will need to be vigilant monitoring delivery and logistics so as not to impact customer satisfaction and financials.
Gift giving may unfortunately be a case of the have’s and have not’s as 25% indicate they will make fewer purchases due to financial circumstances. Along those lines, the season’s more tempered nature will likely mean fewer gifts, outfits and home decor due to limited seasonal activity, as noted by 23% of survey respondents.
With 22% of online shoppers consolidating their purchases among fewer retailers, this will need to be addressed, as it is problematic for the retail landscape long-term.
So, when will consumers begin shopping? 70% of consumers start their holiday shopping before Black Friday. And for those truly efficient shoppers, 39% will have started their holiday shopping before November. To think that 18% had already started is truly impressive.
Bottom Line: Early buying means retailers must be smart about timing promotions as there is significant business to be had before Thanksgiving. Amazon’s Prime Day timing likely plays right into the hands of these ready buyers.
Many shoppers still procrastinate, forcing retailers to plan out their promotional cadence throughout the season. Despite early start times and a desire among retailers to secure early dollars, December remains the critical sales period for finalizing holiday shopping. 68% of shoppers will finish up holiday shopping in December.
Customers seek promotions throughout the holiday, forcing retailers to prepare a strong full season strategy. Cyber Monday and Black Friday dominate online shopping promotional days. The favored free shipping promotion results in a No. 3 status for Free Shipping Day at 30% of respondents, tied with Thanksgiving weekend. Thanksgiving weekend has become a growing online shopping period sandwiched between Black Friday and Cyber Monday. With 28% of online shoppers unsure of which days they will shop, enticing promotions should be the order of the day. Tweaking based on performance to meet company objectives is always optimal.
Bottom Line: Be ready for early birds and those shoppers late to the game with an arsenal of enticing and price-driven offers.
The front and back-end of shopping experiences must work hand-in-hand and both experiences matter. Getting shoppers to move beyond price is tricky but can also truly differentiate a brand long-term. Free shipping and competitive prices are by far the top two most important factors when choosing a holiday retailer. Getting the goods to customers also ranks high for online shoppers with 53% citing product in stock and ready to ship and speed of delivery at 48%. Fundamentals also set the tone for retailer selection and includes:
- 46% think about retail past experiences
- 40% want valuable promotions
- 39% want good customer service
- 32% prefer an efficient shopping experience
With all of the activity around loyalty programs, including the announcement of Walmart+, retailers should keep in mind these types of initiatives also play a role for 22% of surveyed online shoppers.
Bottom Line: There’s still time get it right. Conduct a last-minute thorough review of functionality to ensure you are ready. Testing your own site as well as your competitors.
Amazon’s dominance impacts all other shopping behavior, making it challenging to get one’s fair share of wallet. 48% of shoppers intend to make half or more of their online holiday gift purchases at Amazon, whereas three out of four shoppers will make ¼ of their purchases at the behemoth. This continued embrace of Amazon by shoppers requires the rest of the retail community to elevate their game.
When participants were asked to think about their likely holiday purchasing on Amazon, the majority of online shoppers will be spending about the same on Amazon this holiday. Spending breaks out as follows:
- 54% will spend the same
- 26% will spend more
- 13% will spend less
- 7% do not plan to spend anything at Amazon
Being creative in capturing business with promotions, timely delivery, loyalty and exemplary customer service is essential.
There is still room to grab market share as shoppers may be looking for alternatives to Amazon. Marketplaces will be an integral part of 2020 holiday shopping for 61% of online shoppers. Even if one’s holiday plans can’t be altered, the projected growth of marketplaces must be assessed when developing 2021 plans.
Omnichannel options have been an important growth area during COVID-19, and there’s no reason to believe it won’t continue into the holidays. Other likely online shopper experiences tap into omnichannel conveniences with 28% checking for product availability and 29% likely to place an online order for pickup in store. Creating omnichannel experiences should include branding/messaging around your capabilities onsite via the product page, customer service and shopping cart. Solid execution will ensure growth into the new year but offering the customer this option is an important first step.
Gift cards always assume a prominent role at this time of year. It will be heightened as shoppers have a greater desire for contactless options, and e-cards can serve as a perfect solution. 27% will be purchasing physical gift cards while digital cards follow close behind at 18%. With this in mind, messaging about gifting strategies deserves good visibility in the shopping experience and via email as a last-minute solution that always arrives on time.
Brands continue to capture the attention of shoppers, and 21% will purchase direct from such companies. As they have been creative and focused in their online vision, retailers should mirror best practices and inspiring merchandising for which many have come to be known.
Bottom Line: A multi-dimensional experience that includes marketplaces and store solutions is optimal for shoppers and sellers.
As store-based retail will remain challenged in our COVID-19 world, online retail will thrive this holiday season. This channel is poised to reap the spoils. To achieve record numbers, the focus must be on vigilance and both customer experience and follow-up logistics must be addressed. Staying on top of the season means monitoring the start of shopping through the December final push. These efforts can position retailers to take advantage of this annual ritual. But for me, in lieu of gifts, I’m wishing for a vaccine and healthy friends and family.