Every year, the Chopras would look forward to Christmas and the holiday season. They would spend days shopping for new clothes for themselves, gadgets for their teenaged son, toys for their little daughter, gifts for family and friends, and exquisite decorations for their Christmas tree. At times, they would travel abroad for vacations. They looked forward to special days like Black Friday and Cyber Monday to shop together, and spend quality time with family and friends. However, this year will be different. With the fear of contracting the virus plaguing their minds, they will explore new and convenient ways of shopping, that allows them to browse online and pick up in-store.
Like the Chopras, consumers have to make major adjustments to their holiday shopping plans. As the pandemic continues to impact every aspect of life, it has greatly affected consumer spending habits across all income brackets. Though they may not be completely putting the brakes on shopping and spending on gifts, they are planning to reduce their budget and spend less than they have in previous years.
If a survey conducted by Coresight is to be believed, 48% of holiday shoppers are expected to spend a lot less than last year. This is quite expected considering that so many people have lost their loved ones or jobs and other means of livelihood. Talking about the grim holiday season, Levi Strauss & Co. CEO Chip Bergh told CNBC, “this holiday is going to be unlike any holiday season I think any of us have ever seen before.”
Let us analyse the holiday shopping trends for 2020 :
Spend less, save more :
As discussed above, people will be spending less this holiday season. This extends to shopping for new things for themselves, buying gifts or on celebrations. In a recent survey conducted by Morning Consult, 71% of Americans surveyed said they will be spending less than the usual on celebrations with friends, and 67% will be spending less than usual on celebrations with family. The survey adds that the share of American adults planning to spend less than $300 on gifts has increased by 9 percent while the willingness to spend more than $400 has declined by 8 percent.
The culmination of the pandemic, with the struggling economy will definitely have an adverse effect on holiday spending this year.
Online shopping will be preferred :
Most consumers will avoid going to malls or crowded shops due to coronavirus and will be shopping online. About 73% of holiday shoppers in the UK will mainly be buying online this year, says a report by Rakuten Advertising. It seems that 2020 has been good for online shopping businesses and retailers who have aced their e-commerce game will reap the benefits of a fruitful holiday season. Special days like Black Friday and Cyber Monday will also continue to draw consumers to shop online.
Deloitte expects holiday e-commerce sales to increase from 25% to 35%, amounting to anywhere between $182 billion (₹13,472 billion) and $196 billion (₹14,509 billion). With consumers all geared up to fill their online carts, it is no surprise that retailers are trying hard to invest and ramp up their digital presence to make sure they can meet the growing traffic on their websites and apps. As a result, companies like Amazon and Gap are hiring more workers in their warehouses and call centers to address customer queries.
In fact, another interesting trend that has come forward is that shoppers would look for convenience and safety more than free shipping while making purchases.
Competition between retailers will be at an all-time high :
As more and more retailers are embracing technology to offer a seamless customer experience, the competition between retailers to lure new customers is at an all-time high. Hence, retailers are thinking of special promotions, personalisation and attractive deals to entice customers. This means that just offering a smooth shopping experience isn’t enough anymore. Retailers should think beyond just faster checkouts, omnichannel and free shipping. They need to focus on creating memorable experiences for their customers.
Retailers will also have to think of robust digital marketing strategies as they will be competing for screen time as well.
The need of the hour is for retailers to offer more digitally immersive experiences that induce customers to shop. However, it is difficult to replicate in-store ambience and atmosphere that usually gets the consumers in to the festive mood. While Hilton (Hospitality chain) has shared their popular cookie recipe on digital channels, Disney has uploaded a roller coaster experience on YouTube to remind customers what they love and miss about these companies.
What’s in the shoppers’ bag?
The customer’s shopping behaviour in the holiday season has been hugely impacted by COVID-19. This year, families will not be going for vacations or entertainment venues due to the risk associated with the virus in public places. Hence, the consumers will be spending more on goods than services with a Coresight poll saying that nearly 7 in 10 people will be shifting a part of their spending from services to products. This year, American consumers are likely to buy goods like desk accessories, home décor products, comfortable clothes, beauty products, etc. It is speculated that most consumers will give practical gifts that can be used in homes.
How to reach customers?
Given the uncertainty in these tough times, consumers are looking for something more than just a delightful shopping experience. They need trust, confidence, and assurance from the brands. Retailers should invest in addressing customers’ concerns that might arise, like safety and hygiene concerns, fear of public places, resources to meet the spike in online demand, and other services like curbside pickup and returns.
Retailers can touch consumers’ hearts by coming up with emotive and feel- good campaigns that reassure them that the good times are likely to return soon. Retailers should invest their efforts in placing contextually-relevant digital ads that are personalised, authentic and optimised.
The 2020 holiday season will indeed be unpredictable and tough for retailers. Retailing during holiday season 2020 will be challenging, and will test retailers’ agility and adaptability. They are under extreme pressure to recover from the losses they have faced earlier this year and gain maximum out of this holiday season.
Intellect Commerce can help you to derive the most out of this season and enable you to offer your consumers a memorable shopping experience. For more information, request for a free demo of the iRetail software.
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