The 2020 Holiday Shopping Season: Exploring Major Trends & Industry Predictions
Summary: 2020 has been a year of change, and this holiday shopping season is no exception. While consumers continue to hunker down at home following Thanksgiving, e-commerce has emerged as the go-to shopping method during the first official week of holiday shopping – a trend with echoes across the board. In this blog, we explore industry predictions that brands and retailers will experience in the days, weeks, and months ahead.
According to a September 2020 Pew Research Center survey, “global attitudes about the state of the economy amid the coronavirus outbreak were more negative in some countries than they were during the Great Recession.” However, people are also more optimistic about the possibility of a rapid rebound than they were after the financial meltdown more than a decade ago, a positive outlook that’s reflected in 2020’s Q4 predictions. U.S. holiday sales are currently projected to reach $1.15 trillion over the October-December shopping season, and e-commerce sales will grow 25-35% compared to the same period in 2019.
The State Of E-Commerce And Online Alternatives In 2020
E-commerce and specifically omnichannel shopping solutions have exploded in the wake of COVID-19 stay-at-home orders and social distancing guidelines. As consumers look to avoid crowded stores and shopping malls, they’ve taken to alternatives like online shopping and BOPIS (Buy Online Pick Up In Store) options. Additionally, social media shopping is on the rise, especially as people spend more time on apps like Instagram and TikTok, following the advice recommendations of today’s most popular influencers.
Undoubtedly, trends accelerated by the coronavirus will continue through Q4: 60% of consumers are planning to skip in-store shopping this holiday season, and 66% will rely on the web to buy gifts for friends and family. As a result, 85% of retailers predict that online shopping sales will increase in 2020 compared to years past, and 61% are expecting higher engagement and/or purchasing through social channels. To keep up with those added demands, 50% of brands and retailers are investing more in e-commerce website upgrades this holiday season.
Aside from the perceived health benefits of online shopping vs. in-store, 53% of consumers say they prefer e-commerce alternatives for convenience reasons, and 40% say it’s simply a matter of price; often, they can find better deals online. Of course, there’s more than one way to shop online – same goes for delivery and pickup methods. Regarding the 66% of shoppers who say they’ll rely on e-commerce alternatives this holiday season, 51% will use in-app shopping, 41% will use social media shopping, 45% will use home delivery options, and 42% will skip shipping and opt for curbside pickup.
Despite ongoing economic pressures, and regardless of HOW they do it, consumers WILL be shopping this holiday season. But, what will they be buying? According to industry predictions, COVID-19 has – at least temporarily – changed what people are asking Santa for come December.
The Most Popular Product Categories To Watch This Season
According to Reader’s Digest, technology gifts typically take center stage in Q4: “the most common gift in 2016 was an iPhone, which showed up as number one in 11 states. Bluetooth speakers were the top gift in four states.” This year, electronics will remain high on people’s wish lists. 74% of consumers plan to purchase computers and accessories (perhaps to satisfy work-from-home and remote learning needs), and 72% will purchase video games (an evergreen fan favorite.) Even more popular than electronics will be apparel, with 80% of consumers planning to purchase clothing, specifically causal and kid’s clothing. Since many consumers are staying home and working remotely for the foreseeable future, comfortable items like joggers, sweatpants, and leggings will be in high demand.
Speaking of staying at home and the increasing importance of “self-care,” personal care products will also be popular – and that’s not a temporary trend solely driven by COVID-19. According to an early 2020 report published by Fior Markets, “the global beauty and personal care products market is expected to grow from USD 493.34 billion in 2018 to USD 756.63 billion by 2026.” Additionally, “an increasing trend of personalization and customization of beauty and personal care products is expected to offer considerable opportunities in the market.” Along with personal care products, home cleaning products will also be prevalent as people look to make their homes as cozy, comfortable, and hygienic as possible.
For last-minute gifts and easy stocking stuffers, you can forget about cash this holiday season. According to the Chicago Tribune, “cash was already being edged out in many countries as urban consumers paid increasingly with apps and cards for even the smallest purchases. But the coronavirus is accelerating a shift toward a cashless future.” That said, gift cards will be the new go-to, particularly gift cards that support local businesses – indeed, 66% of consumers say they plan to shop at small businesses this holiday season. In 2020, it’s forecasted that shoppers will spend an average of $200 more on gift cards than they did in previous seasons.
Aside from cold hard cash, concerns about the ongoing pandemic have caused a decrease in other gift categories, as well. For example, nice-to-have non-essentials like jewelry have dropped in popularity since the beginning of the pandemic, with retailers like Kay and Tiffany reporting major sales drops. Additionally, experiential gifts – like concert tickets and surprise vacations – are also a no-go, as travel has decreased 72% since March. And if travel experiences are given as gifts, they’ll most likely be to destinations that don’t require travel by plane, train, boat, or bus.
Not only are consumers extra-conscious about WHAT they buy this year, but they’re also more concerned about WHO they buy from. COVID-19 hasn’t been the only 2020 headline – social issues like the Black Lives Matter movement and impending election have also been high on the radar. So, what does that mean for brands and retailers?
How Will Social Change & Consumer Expectations Affect the Holidays?
No longer can brands and retailers survive by laying low and avoiding conflict. Instead, modern consumers prefer when companies take a stand and use their platforms to promote opinions. 64% of consumers say they’d buy from a brand or boycott it solely based on its position on a social or political issue. That said, authenticity matters, and consumers can usually see through brands who jump on the social issue bandwagon; instead, there needs to be conviction and follow-through on any promises made. 86% of people agree that authenticity is a key factor when deciding which brands to support, and 81% say they need to be able to trust a brand to buy from them.
One way that companies can come across as more authentic and trustworthy is by investing in better customer service experiences. Not only does customer service enhance the shopping experience, but it also promotes a human element that’s sometimes lacking in e-commerce. 73% of consumers say that customer service is an important factor in their purchasing decisions, so brands should focus on email personalization, product recommendations, targeted ads, and seamless returns and refunds. If your customer service isn’t where it should be, there’s a good chance your competition will win over loyal supporters. Since the pandemic, 30% of shoppers have purchased from a brand they’ve never bought from before, and nearly 95% say they’d be very likely to buy from a new brand in the future.
Although e-commerce typically limits face-to-face interactions, video is helping to solve that challenge. In 2020, consumers are spending more time on social platforms that offer livestreaming, and in 2021, livestreaming is expected to generate more than 500 million sales interactions. For big events like Black Friday, there’s already proof that livestreaming works. In China, the country’s equivalent of Black Friday is called Single’s Day. Essentially, it’s a 24-hour livestream shopping event that incorporates fashion shows, concerts, and games. In 2019, Single’s Day sales reached a record high of $38.4 billion – that’s nearly twice Black Friday and Cyber Monday combined. Demand for video content continues to rise, and 54% of consumers say they’d like to see more videos from the brands and retailers they support moving forward.
2020’s Holiday Season Will Look Different, But In A Good Way
Humans are creatures of habit, which can make it difficult to say goodbye to old methods and embrace new trends. However, to excel in the retail industry, you need to innovate. Although 2020’s holiday shopping season will look different than years past, that’s not necessarily a bad thing. In fact, it’s a huge opportunity to change up old marketing strategies and adopt a more modern approach to omnichannel e-commerce experiences. If you need help developing a new strategy to meet new consumer expectations, BDS is here. With industry-leading Retail, Digital, and Experiential divisions, you can end 2020 with a bang and set the stage for success in the New Year. Contact our team at [email protected] or 800.234.4237 for more information!