Black Friday is on its way, the official kickoff to the holiday shopping season. Normally. But 2020 hasn’t been a normal year by any stretch of the imagination, and many holiday shoppers started buying earlier this year. So will the Black Friday to Christmas Eve stretch be boom or bust?
More on the Holiday Retail Season
U.S. retail sales inched up just 0.3% in October, according to seasonally adjusted data from the Commerce Department, marking the smallest increase since the pandemic recovery began in May. However, sales were still 5.7% higher than the prior-year period, and the numbers indicate it will be a reasonable holiday for retail, Neil Saunders, GlobalData managing director, retail, told RIS, though he tempered this by noting there are early signs consumers are losing momentum.
“Unless there is another round of stimulus, this suggests that holiday spending will fall a long way short of being a boom,” he said.
IBM’s latest holiday forecast is projecting a 1.8% increase in Nov-Dec retail sales vs. 2019.
“The 2020 holiday season is a real challenge–no one really knows what holiday shopping will be like as there’s no real comparable situation and the macro-economic conditions are very fluid,” saysKarl Haller, partner, Consumer Center of Competency Leader at IBM.
“We expect sales trends to continue to be heavily weighted towards essential retailers (home improvement, grocery, and mass discounters, and e-commerce), which were able to remain open and operating during the COVID lockdowns and which, for many consumers, have become the habitual first-choice shopping destinations.”
Not shockingly, across the board e-commerce is predicted to rise, but capturing consumers’ digital attention is a big task.
“Unfortunately, because of the pandemic, many consumers have indicated that they're not necessarily looking forward to the holiday season as much because of either they're grieving the loss of a loved one or they're social distancing, so they're not getting together with others, not going to holiday parties,” Dora Bock, associate professor of marketing in Auburn University’s Harbert College of Business, tells RIS. “There's a lot of uncertainty in a lot of people who have lost jobs and are still recovering financially from some of the hurdles they've had to face this year. Overall, it's going to be very different just because there's going to be a clear push for online, but also there's a lot of different emotions that consumers are currently experiencing now very different to what they have experienced in the past.”
Consumers are being more cautious when it comes to spending their discretionary incomes, says Shikha Jain, a partner in the global Consumer Goods & Retail practice at Simon-Kucher in Boston, U.S. “Interestingly, despite their cautiousness, we’re also seeing that consumers are less likely to pre-plan their Black Friday and Cyber Monday purchases, and are more likely to browse and make spontaneous purchases – this reveals a major opportunity for retailers to sharpen their promotions and maximize cross-sell opportunities as consumers will be browsing across multiple categories.”
“This year, it will be critical for retailers to pull consumers to their online shops through any available online marketing channels and offer them a unique shopping experience online, such as concept corners or live events with influencers, to boost cross-selling and up-selling opportunities,” says Nina Scharwenka, a partner in the global Consumer Goods & Retail practice at Simon-Kucher in Munich, Germany.
“With many consumers doing far less aisle-wandering and having fewer touch-and-feel experiences this year, retailers that best simulate these environments online will be able to capture those unexpected purchases, Periscope by McKinsey says in its “2020 Holiday Season: Navigating Shopper Behaviors in the Pandemic” report. “Expect retailers to increase the number of product photos, easy-to-compare features, user reviews, and generous return policies to improve browsing confidence. Retailers who perform well this season are also likely to personalize the browsing experience, merging data on customer characteristics and preferences with information on trending holiday products to optimize the assortment of products each digital shopper sees.”
Retailers are certainly tasked with a complicated consumer mindset this year, but preparedness and last minute agility will likely be a winning combo. As the industry enters the throes of the holiday season, RIS reviews the latest expert forecasts and findings.
- Puppets & marionettes (+363%)
- Security safes (+363%)
- Duvet covers (+251%)
- Measuring cups & spoons (+287%)
- Cufflinks (+236%)
- Wallpaper (+188%)
- Holiday ornaments (+134%)
- Poker chips & sets (+180%)
- Toners & astringents (+134%)
- Cookie cutters (+109%)
- Opinions from other customers (69%)
- Website recommendations (31%)
- Talking to a real human via only chat (27%)
- Specialist online forums (19%)
- A customer service phone line (15%)
- Expert recommendations (15%)
- Chatbots (11%)