What to Expect from the Strangest Holiday Shopping Season Ever

Raise your hand if you think you know how this holiday shopping season will play out. Not many hands went up there, did they. In a year this unpredictable, it would take a truly top-notch crystal ball to confidently predict anything, let alone to discern where retail sales are headed as we approach the holiday season.

Nonetheless, here we are coming to you with our take for retailers in their most critical window of the year. Of course, having good data is the equivalent of polishing off the dust and film from a crystal ball so we do have a certain degree of confidence here, at least in general terms.

We made three predictions back in August...

#1: The shopping season will start earlier and last longer

#2: It will be harder for brands to cut through clutter (e.g., health concerns, election cycle and economic issues)

#3: Shoppers will find new ways to uphold old traditions, driving possible demand spikes in unexpected categories

Armed with fresh data, we thought we’d circle back to those and a few other key points, assess the consumer mindset as it stands right now and--critically--offer you some recommendations on where you might find opportunity and growth.

Elongated shopping season

The holiday season will indeed start earlier and last longer than in previous years. The early kickoff will be driven by Amazon Prime Day, normally a July event but this taking place October 13-14 this year. Black Friday and Cyber Monday will still be big but our data shows a slight drop (68% vs. 78% last year) in the number of people likely to be shopping over that weekend. 

Our recommendation to retailers? Be prepared to start holiday promotions early & offer competitive pricing in order to capture all-important early sales. You’ll also want to encourage consumers to get the majority of their online holiday shopping done before November 15 to avoid the shipping surcharges that eat into your margins.

A Tale of Two Shoppers

Just as this year has been “feast or famine” for many brands, it has been the same for a significant number of American consumers. Different people are facing radically different economic realities in the wake of this pandemic year. As a result, it’s likely to be a tale of two shoppers: people who have been out of work for months and whose stimulus benefits have now expired, and people who still have disposable income after remaining largely free from the pandemic’s clutches. Our data suggests that 30% of Americans will have less money to spend on holiday season gifts this year. Encouragingly, that leaves 70% seemingly unscathed.

So how do you as a retailer do right by two widely divergent types of shoppers? For starters, cast a wide net with your deals and marketing promotions because you can't be sure what situation your typical priority audience might be in. Now is also the time to capture new audiences and demographics (e.g., older, more affluent, seeking value). Expanded media targeting can drive your new audience acquisition.

Comfort Spending

Ever hear of comfort food? Well, these are times for comfort spending. Consumers are searching for ways to regain the normalcy that has eluded us this year. As a result, they will spend the holiday season trying to find solace and keep traditions alive despite everything. In our survey, 66% of respondents said they plan to spend the same amount or more this year in order to keep as much normalcy as possible for their family. 

Fulfillment

In addition to price, fulfillment will also be a big influence on purchasing decisions this year. Consumers will have an extra focus on being able to safely get what they need, on time, at the right price. Our survey revealed that 37% of people are worried about shipping and delivery delays while 35% worry stores will run out of items they need. These concerns are especially running high among Gen Z shoppers. The moral for retailers: take special note of any supply issues and be sure demand generation efforts don’t create availability snafus later.

Online Online Online (But…)

In normal times, it’s important to meet consumers where they are, so to speak. Right now, it’s absolutely everything. The online shopping experience you deliver will be a huge predictor of your success this holiday season. Our data suggests that 48% of your customers will shop mostly online this year (up from 36% in 2019) while 19% will shop mostly in-store, the remaining 33% mixing it up. Having said all that, ignore your customers’ in-store experience at your peril. With consumers in such an emotionally raw state, any positive in-store feelings you create are likely to reverberate well into the future and drive loyalty.

Joy to the World

Let’s close by talking about the most important intangible aspect of the holiday shopping season: joy. It’s been a year of dread for most people and shopping has become a mix of anxiety and utilitarian boredom. Anything your brand can do--online or in-store--to bring joy to the exhausted masses will set you apart, drive sales and build brand love for the longer-term.

Look to create experiences that make shopping fun again. How can you create browsing/impulse buying experiences online to drive up cart value? How can you replace interaction with store clerks by providing useful information online to inform purchases? How can you best communicate safe shopping protocols and provide incentives for shoppers willing to go in-store and take that risk? Also be sure to highlight your click-to-collect options (buy online, pickup in store or curbside) and educate shoppers that they can use online discounts to buy online, then still pick up at a physical location.

The enormous challenges brands have faced in 2020 are well-documented. But the opportunities have been there throughout, lurking just beneath the surface. It’s time to leverage all the strategic planning and all the ingenuity your organization can muster. Focus on experience. Focus on joy. Then go out and rock this holiday season.

RetailMeNot is ready to help your brand tackle 2020’s unique holiday challenges by partnering on marketing efforts, continuously monitoring both the retail landscape and shopper trends and making recommendations that drive real growth. Download RetailMeNot's Holiday Planning Cheat Sheet for an overview of key dates and promotional strategies to employ for a successful Q4.

We're excited to help our partners reach shoppers, manage demand and grow their business during this crucial time of year. To learn more about how you can jumpstart Q4 holiday sales, email your Account Director or reach out to our Partner Services team.