We are all on a journey. In this case, we are on a shopping journey to complete our holiday shopping. Throughout the course of the season, we are certain to happen upon some interesting thing. These finds are both personal and professional but ones I believe will shape the season ahead. I’m hoping that this showcasing of retail examples will shed light on what lies ahead for us all.
#1. Ecommerce will rule
This will be a different kind of holiday. Many of the traditions that make up the holiday season will be difficult under current circumstances. Shoppers will be home for the holidays more now than ever before and their needs will be different. Ecommerce sales are certain to reach unprecedented highs.
Sadly, many shoppers are not in a position financially to partake in the season as they normally might. With COVID-19 making a return appearance, its impact will be felt on budgets and buying. Shoppers will continue their pattern of skipping store visits or at the very least spend less time there.
Pundits predict that ecommerce will be off the charts. While we have long seen double digit gains, Forrester Research Inc. sees online retail growing 18.5% this year, so that it will reach 20.2% overall penetration in North America.
Our own Digital Commerce 360/Bizrate Insights pre-holiday survey of 1,000 online shoppers suggests that the majority of those shoppers surveyed (46%) indicated they will buy most of their holiday purchases online. Additionally, 77% of online shoppers intend to complete more than half of their holiday gift purchases online.
#2. Time has no frame of reference
The rhythm of the season has gone off course. Shoppers find themselves asking when to buy, how to buy and the right way to buy under the circumstances. First came Prime Day in October and then questions about what’s next.
Did Prime Day take away the thunder of the season? Are shoppers already numb to what lies ahead? Our Digital Commerce 360 Prime Day 2020 survey of 530 online shoppers provides some interesting insights that buttress this discussion.
- 58% of online shoppers made purchases during the Prime Day event on Amazon.com.
- Buyers purchased on average two to three items.
- Three in four (74%) online shoppers spent up to $250 on Prime Day, though the $100 and under segment received the greatest attention with 42% spending in that range.
- 79% of Amazon buyers spent the same or more in 2020. Impressively, 41% spent more.
Now, let’s look at some of the findings and what they mean for our holiday journey.
#3. Contactless will be more compelling than ever
Everything contactless from the digital gift card to the delivery at the curb will be in vogue this holiday season. By looking at the gifting that is being readied for the holidays, retailers are providing keys to what the season holds.
Just take a look at Lululemon. The retailer knows that making things easier for shoppers will involve taking a more contactless approach than ever. It offers three ways to meet the needs of shoppers from curbside pickup, to buy online and pick up in store and lastly virtual personal shopping. While BOPIS has been a mainstay of store-based retailers and curbside a reality for just a few, the pandemic altered its course, given its role in keeping stores afloat. Virtual personal shopping tended to be the third wheel, but now appears to be a welcome addition. For those retailers that believe in the personal touch and have the infrastructure to support it, such services can truly distinguish their brands and drive sales.
Every retailer should have a contactless gifting solution, starting with digital gift cards. According to our research, 18% of shoppers indicate they will be purchasing a digital gift card. The worries about last-minute delivery challenges should bump this number up as more shoppers look for alternatives. Its performance relative to prior years will be worth watching. The ability to offer shoppers a simple solution is important—but what’s also important is giving the shopper the ability to personalize their gift through themes and ideally video. Coach utilizes Gift Now’s gifting platform to add another dimension to gift giving.
#4. Curbside may solve all problems
We will monitor curbside during the Cyber 5 to see how it holds up under pressure. If the projections ring true, shoppers will embrace this convenient and contactless option in droves over the holidays. Will it be chaotic or will it be well executed? These are the questions we will look to explore. I predict some bumps along the road due to volume but mostly smooth sailing. Our own mystery shoppers will be making their purchases and reporting on curbside’s performance as the season progresses.
The frame of reference begins and ends with “I want it now.” Target wisely showcases its two options for contactless shopping, giving customers convenient options to switch their order to drive up at any time. Choosing to be part of its membership or for a relatively reasonable fee, same-day delivery can be had to meet pressing demands.
#5. Creativity in gifting can compel shoppers to buy
Retailers each year look for ways to innovate, capturing the hearts of their customers as well as new prospects. Creativity comes in many shapes and sizes. It can be product-driven in looking at something new. It can also come into play via functionality and how the merchandising is executed often triggering an impulse buy. Though the numbers may be small, there is a growing love of real experiences, and that includes the 11% who say they would rather purchase an experience than a product.
REI sets the right tone for the times. It is the creative spin on the standards that compel its customers to look further. From the “nifty gifty” to the “piggybank friendly,” it has read the times accurately. Its spreading of outdoor cheer is core to the REI brand and will be inspiring to its customer base and beyond.
21% of surveyed shoppers anticipate they will be purchasing from brands. Retailers’ ability to showcase who they are is second to none. I came across The North Face, whose compelling brand assumes such a vision. The North Face also introduces sustainable gifts, which continue to see higher shopper adoption rates given the environmental challenges we all face.
#6. Marketplaces up their game
In the Digital Commerce 360/Bizrate Insights 2020 pre-holiday survey of 1,000 online shoppers, we asked shoppers what they might expect would be part of their experience. Marketplace growth rises to the top with six in 10 online shoppers expecting to make a purchase from a marketplace. From mass marketplaces like Amazon and eBay to specialty players like Newegg and Etsy, their assortments appear unlimited. In our marketplace survey earlier this year, 1,000 shoppers told Digital Commerce 360 and Bizrate Insights that the fundamentals that are in discussion year-round regardless of COVID rise to the top.
#7. If you can’t pay, don’t worry
As initial forays into extended payments were introduced by Affirm and other companies, it wasn’t clear how those would be embraced by shopper and retail communities. I was skeptical as it harkened me back to early days of retail, and I wondered if they were a fit for what I perceived as a more affluent audience online.
A recent report from IBISWorld predicts the Buy Now Pay Later (BNPL) industry will continue to grow 9.8% annually over the next five years to $ 1.1 billion.
I interviewed an industry colleague, Chip Overstreet, now CEO at Spiceology, who joined Affirm in the early years and asked him his perception of this category. He shared, “It’s an opportunity to make expensive things affordable. The easy factor can’t be underestimated. Shoppers can check out faster than with a credits card. Five pieces of data is all you need.”
Its presence has penetrated many sites with both generic callouts and brand-related messaging. One can’t help but wonder if the current economic times are contributing to the growth of these forms of payment at an exponential rate. Even Etsy is in the game.
#7. Delivery will be the million-dollar question
They say there will be delays, certainly that there is not adequate capacity. Retailers have placed bets on inventory and now they must wait and see about how demand plays throughout the season.
Shipping will be free or mostly free with a threshold for consumers. One might ask under the circumstances, will fewer retailers offer unconditional free shipping at all during the holidays?
It makes sense that retailers would not offer unconditional free shipping. But nothing about online shopping is ever about what makes sense. I predict that the numbers will be similar to 2019. When 1,000+ online shoppers were asked what their reasons for selecting a retailer were, free shipping rose to the top. The numbers were almost the same from year to year. There’s simply something about it. In fact, as my daughter was placing an order on Apple yesterday for an iPad Air, she emphasized that she was getting free shipping included as well despite her purchase price being quite expensive and almost expected.
Cutoffs will be earlier and, in fact, retailers like DSW and others are already warning buyers of delays upon entering their homepage. It also focuses on the VIP, encouraging prospects to join reinforcing that all-important free shipping inclusion. We will measure as Black Friday becomes closer and share our findings.
Already, our research has shown that 42% will shop earlier knowing those delivery times may include delays. For some, that means the purchases are complete already. Others are simply forewarned that these delays may impact purchases and buyer behavior.
#8. Returns will be easy, erring on the side of the customer
One might ask, “Will retailers be more flexible with their return policies?” Shoppers want as much time as possible to return products and this holiday season will be no different. Detailed below are some factoids from our Digital Commerce 360/Bizrate Insights Returns survey in March completed by 1,052 online shoppers. Mostly, the majority zero in on a dislike from having to pay for return shipping, paying restocking fees, and any high fees associated with the return shipping. Only 12% found that return policy was too restrictive.
A later survey may be more telling as only 26% of online shoppers in our Digital Commerce 360/August Fulfillment survey of 1,105 online shoppers found that convenient returns—including shipping and in-store options—had met or exceeded their expectations. Perhaps these findings will play out in changes to return policies this season.
When asked about which aspects of the delivery experience have met or exceed expectations, only 36% agreed that they were satisfied with their ability to deliver in a timely fashion.
QVC takes a strong stance and has for many years given the customer the flexibility to return any holiday gift until the end of January. During these times, that convenience will be compelling.
According to our returns survey, almost half of online shoppers prefer a return window of 30 days and that goes back as far as I can remember in my over 25 years of working in ecommerce.
The journey is just beginning. The endless possibilities of ecommerce are inevitable. The season will ebb and flow in new ways that may reflect the ecommerce holiday patterns of the future. That will certainly include contactless initiatives including curbside solutions. Creativity in the gifting experience will still be mandated.
The marketplaces will see growing consumer adoption and the economics times will readily embrace a buy now pay later payment options more than ever.
But the success of the season will ride on the retailers’ ability to deliver. Cost efficiencies must be under scrutiny, but marketing touts, especially free shipping, must remain in place. Retail is always a messy business but extending returns makes it easy for everyone to transact under their terms. And that means doing it simply—as we know simple is the right message for this holiday season and always.Favorite