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by Blake Morgan
November 12, 2020
by Blake Morgan
November 12, 2020
Big sales, big crowds, big profits—holiday shopping is big business. Many stores typically depend on strong sales in Q4 to hit their annual goals and put them on a path towards future growth.
But like nearly everything else in 2020, holiday shopping this year will be anything by typical.
Fueled by changes in customer preferences and economic situations, as well as a global pandemic, holiday shopping will be quite different this year. Retailers need to make adjustments to best serve their customers and find success.
Here are five ways holiday shopping will be different in 2020:
Most years, the unofficial start of holiday shopping is Black Friday, but this year, it’s already begun in mid-October. Surveys have found that 3 in 10 shoppers will start their holiday shopping earlier than usual this year.
Instead of waiting until stores are crowded in mid-December, shopping early allows customers to be more socially distant and safe. Logistical problems of large, last-minute crowds can also be frustrating and expensive for retailers, who are encouraging shoppers to start early. Spreading out holiday spending also lessens the impact on shoppers’ wallets, many of which are already strained this year.
Amazon Prime Day, which is typically held in July, was moved to October this year, which spurred many other retailers to run simultaneous sales. Salesforce estimates that $6 billion of retail spending that usually occurs during November’s Cyber Week could be pulled into October this year.
But an extra-long holiday shopping season also brings the risk of burnout for brands and consumers, so stores will need to proactively reinvigorate customers with new deals and communication.
Instead of in-store doorbusters, the 2020 holiday shopping season will feature predominately online shopping. Many areas still have COVID-19 restrictions in place that limit the capacity and hours of stores, and the impending flu season and cold weather could lead to an increase in cases. Most consumers still aren’t comfortable shopping in store and are instead taking their spending online.
Some estimates put holiday e-commerce sales growing up to 35% this year. To meet the demand, retailers are building out their digital capabilities with improved apps and online shopping experiences. Brands with strong digital offerings like intuitive mobile browsing, simple payment options, chatbots and accurate personalized recommendations will come out on top.
The huge growth of online shopping and deliveries will likely put additional strain on the logistics and delivery systems that are already reeling from COVID-19. Many consumers have come to expect shipping delays over the last six months, but they could become even worse during the last few months of the year. Some delivery companies are preparing for the holidays by hiring thousands of more drivers, but the strain on an already fragile system could still impact customers, especially as some delivery companies increase their fees to cover additional costs for safety and cleanliness.
To alleviate the shipping delays, many retailers are emphasizing their BOPIS (buy online, pick up in store) services and curbside pickup. Customers may be more likely to purchase from stores where they can quickly pick up items instead of having to wait for deliveries.
To avoid customer frustration, retailers will need to be very clear about pre-holiday order deadlines and the fact that orders will likely take longer than normal to be delivered.
One of the biggest questions surrounding holiday shopping this year is how much people will spend. With economic uncertainty and many people facing job losses or pay cuts, some shoppers may be spending less. A McKinsey report predicted a 25% net decrease in holiday shopping intent.
But at the same time, other surveys have found that 66% of consumers plan to spend the same amount on holiday shopping or even more this year. In many cases, consumers are willing to spend more to keep traditions alive. And with fewer people traveling over the holidays, consumers may have more money to spend on gifts.
What does this mean for the holiday shopping season? Spending will be uneven. Some consumers will be eager to have some sort of normalcy and spend their usual amount (or more) on gifts, while others will cut spending because of economic uncertainty.
Forget the typical gifts and stocking stuffers—this year, people will think outside the box. While retailers will still sell a large amount of clothes, shoes and electronics, experts are also predicting that consumers will flock to non-traditional gifts that can build relationships. After spending more time than normal at home, many consumers will give games, streaming service subscriptions and vouchers for future travel. People will also choose to pamper themselves at home with more health and beauty gifts. With the pandemic still in full effect, consumers will likely spend more on at-home fitness equipment, comfortable clothing and home décor to make the most of their time at home.
Are you looking to start saving for the holidays, a house, or a rainy day? Check out our savings accounts that can help you get there.