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No Time Like the Present: Holiday Shopping 2020 Preview

No Time Like the Present: Holiday Shopping 2020 Preview

Steve Heisler

masked woman wearing Santa hat in front of snowflake background

This year’s holiday shoppers remain committed to gift-giving—so long as brands shift to meet new consumer timelines, budgets and safety concerns

It has been recited ad nauseum that we are living through unprecedented times. But when forecasting this year’s holiday shopping season, Rod Sides, who leads the U.S. retail and distribution practice at Deloitte and serves as the company’s vice chairman, cites precedent. During the recession of 2008, holiday spending was expected to drop substantially due to lack of discretionary finances —yet it fell only 4% from 2007, according to Statista.

“Our theory was that folks wanted to be able to extend at least a greeting, some kindness to more people,” Sides says, suggesting this same mindset will influence holiday spending trends this year. “I expect it to be the same [as last year], maybe arrive slightly better, because people are trying to make up for the lack of other experiences.” That dollar amount could increase even more given that locked-down consumers are likely to save money on holiday travel, meals and entertainment.

According to data gathered by eMarketer, 2019 retail holiday sales in the U.S. broke $1 trillion for the first time in history. This represents a 2.4% increase in spending at brick-and-mortar locations and a 13.2% increase in e-commerce from the year prior. Sales on Black Friday and Cyber Monday both shot up nearly 20%, and purchases on Thanksgiving rose almost 15% from 2018.

While holiday spending may continue at its robust pace, the way in which consumers shop this year is subject to change.

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A joint study carried out in partnership between Google and Ipsos showed that 70% of consumers will start their holiday shopping earlier than last year to avoid crowds, and 80% will consolidate their shopping so as to necessitate fewer trips. Customers will be arriving with intent: 67% plan to check whether an item is in stock before heading to the store. The same report found that shoppers will opt for brands and stores that ease their pandemic-related concerns, as 53% of customers say they will prioritize shopping at stores that offer a contactless experience and 47% plan to purchase online to pick up curbside.

This holiday season, brands can attract consumers by funneling them through a journey that can be customized to fit their comfort level. Place ads where customers are spending most of their time these days: social media, YouTube and streaming video. Messaging should emphasize in-person safety protocols and the availability of online ordering. Then, ensure that the in-store experience, particularly closer to the holidays, lives up to the promise of safety and a speedy purchase.

“Brands that give choices will win,” says Lauren Cooley, senior vice president of retailer and brand solutions at the mobile marketing agency RetailMeNot. “Communicating the actionable messages—how can I transact with you? How can I get the best deal? What are the recommended items I should be thinking about? That, to me is the critical piece. It’s not about framing all of our ads with what’s happening [in the world]. Everybody knows what’s happening. It’s about making sure that consumers really understand how to [safely] interact with these brands they love.”

Awareness

Pandemic-related issues have diminished customers’ perceptions of brands—even those they’ve previously favored. According to an April survey of more than 1,000 online shoppers conducted by the ecommerce news outlet Digital Commerce 360, 47% of customers have experienced delays in online orders or out-of-stock alerts since the pandemic began. “Consumers became less brand loyal,” Cooley says.

Ryan Sauer, director of digital marketing at PowerChord, feels that effective creative relies on a hybrid message that focuses on both safety and traditional holiday cheer. Continue to let customers know about your contactless options, but there’s nothing wrong with including images of families enjoying a holiday meal together, or a child tearing into a gift. Customers are still hungry for a holiday experience, whatever it looks like, so remind them of what they’ve looked forward to in the past.

Social media posts and banner ads remain effective avenues to consumer attention, but pay special mind to YouTube. Staying home led to a 60% increase in the amount of media content watched during lockdowns, and Sauer notes that one of the most pronounced trends during has been customers taking on projects themselves. Rather than call someone to enter their home, for example, they are attempting to unclog drains and spackle walls on their own with the help of YouTube tutorial videos.

Produce pre-roll ads or in-video banners to meet customers on YouTube. Because consumers are spending so much time in front of their desktop computers, make sure your ads play as nicely with traditional computer browsers as they do on mobile.

Research

Budgetary and safety concerns are likely to shift the kickoff of this year’s holiday shopping season from October to mid-September. The pandemic has left many customers are working with smaller budgets, and the sooner they get a sense of how much gifts will cost, the sooner they can begin squirreling money away. Similarly, those who prefer browsing the aisles will be heading to stores long before the holiday crowds arrive so social distancing guidelines will be easier to follow. An earlier launch to the shopping season also affords customers with the peace of mind that gifts will arrive in time for the holidays.

Holiday messaging should begin as close to mid-September as possible to better position your brand for when customers begin their research in earnest. Understand they may be disoriented from inconsistent store closings and reopenings and therefore might not immediately know where to look—or even remember you.

“Customer loyalty is up for grabs right now,” Sauer says. “If [consumers] don’t think that your brand or store … is open, or is there for [the consumer], you’re not top of mind.”

In addition to being clear about your payment options and safety protocols, highlight your customer reviews to potential shoppers during their research phase. Those brands that have successfully managed new customer expectations and shopping experiences during the pandemic can solicit recent testimonials from customers to help put others at ease. More so than illuminating how you have been handling supply chain woes or fluctuating social distancing guidelines, these reviews serve as proof to customers that your brand follows through on its promises.

Purchase

The challenge at the bottom of the funnel is to ensure that customers have no reason to bail on their purchase. Some might peel away once tax, delivery and other fees start factoring in and they realize an item might be financially out of reach. Others who were promised a contactless experience could get upset when they pull up to a store only to witness sloppy execution of distancing guidelines.

Sauer believes that financing options can reduce sticker shock once customers, who may be operating on a reduced pandemic budget, are ready to check out virtually or in person. Consider putting together payment plans and layaway services.

“The largest competition during the holidays [are] massive marketplaces—Amazon obviously has payment plan financing,” Sauer says. “Any type of approach you can do to also show you can be flexible during this time to be able to compete with them … give [customers] additional reasons to continue to look into [your brand.]”

Cooley encourages brands to spend time perfecting and communicating purchase protocols so customers have no excuse to bail at the last minute due to safety concerns. This process can include online ordering with either reliable delivery or in-store pick-up, and reconfiguring the layout of your store to include one-way aisles, distanced cashiers and extended weekday morning and evening hours. Even though individual states have produced different reopening guidelines, err on the side of overly cautious.

Another way to reduce crowd size, Cooley adds, is to deemphasize traditionally mammoth shopping days, such as Black Friday, and extend sales over the entire Thanksgiving week and through the following Cyber Monday. Sides also suggests offering customers a slight discount if they order online and pick up curbside, which can attract cost-conscious shoppers and reduce the likelihood of a delayed delivery.

Steve Heisler is a staff writer at the American Marketing Association. His work can be found in Rolling Stone, GQ, The A.V. Club and Chicago Sun-Times. He may be reached at sheisler@ama.org.