The 2020 Holiday Shopping Experience
This year’s holiday shopping experience is different from any year before. The economic climate and COVID-19 have created the perfect storm for retailers. These limitations have altered the traditional in-store shopping experience.
But it isn’t all bad news. The holiday shopping experience to-date has proven to have positive milestones so far. Brands have already had significant success from Black Friday Cyber Monday (BFCM). Much of this success is due to adaptability, innovative technologies, and omnichannel services. Let’s take a look at how retailers are attracting shoppers in this new holiday landscape.
The Buying Experience is Different
When we think of the holidays, we usually picture long lines and waits. That scenario no longer is the same for 2020. The nation has gone through phases of shutting down and re-opening since the onset of COVID-19. New health and safety measures have instilled new behaviors and trends within consumers. More consumers have shopped online even during reopening, in comparison to when stores were still closed. In PYMNT’S latest report, The Great Reopening: Doubling Down Online, research shows that safety and convenience are the two primary motivations behind shopping digitally.
In exchange for chaotic swarms of shoppers, brands have invested in a streamlined digital experience. This has led to a boom in businesses implementing omnichannel services. This strategy will remain essential for a seamless holiday shopping experience. Shopping options such as Curbside Pickup, Online Ordering, Buy Online & Pick Up In Store (BOPUS), and Contactless Delivery adopted by brands earlier this year for COVID-19 safety have prepared them for the holiday shopping season.
Mobile shopping will be an important omnichannel strategy in the customer journey this holiday season. Mobile data and analytics firm, App Annie, estimates that U.S. consumers will spend over 1 billion hours on Android devices alone in Q4, up 50% year-over-year. In anticipation of this growth, brick and mortar retailers have beefed up their mobile experiences with innovative technologies and more.
Whether it’s the ease of access or concerns over COVID-19, it’s clear that the shift toward online shopping and omnichannel features will be here to stay.
Consumers are Asking if the Price is Right
Economic uncertainty has made consumers think more about their budget. In McKinsey & Company’s recent holiday report, consumers state that their top three reasons for choosing a retailer during the holiday season are: better prices/promotions, better value, and shipping/delivery costs.
Source: McKinsey & Company
To incentivize today’s bargain shoppers, retailers have rolled out promotional offers, deep discounts, and payment options to capture the eyes of consumers. One of the most interesting payment features brands are advertising more this year is buy now, pay later models. Walmart, Apple, and many other stores have begun offering this form of financing to consumers in hopes of increased holiday sales. The buy now, pay later is touted to be a savior for holiday shoppers who are on a budget or want to splurge on gifts.
“We expect to see installment loans or alternative financing in full force during the upcoming holiday shopping season,” commented Raymond Pucci, Mercator Advisory Group’s Director of Merchant Services.
To kick off the holiday season, brands announced holiday deals as early as September. The early start to holiday promotions has paid off quite well so far. Retail revenue from September through Thanksgiving weekend rose 2.1% to $62.5 billion. Online sales made up 27.2% of spending during this time, an increase of 18.7% in comparison to 2019. Adobe’s latest analysis of shopping data showed that holiday spending so far has already passed $100 billion. This number isn’t typically reached until mid-December. The numbers speak for themselves. Even if consumers are more price-conscious, they’re willing to buy from brands if the price is right.
The Competition for Customer Loyalty
The battle to win customer loyalty has heated up immensely throughout 2020. With the power in consumers’ hands, brands have raced to differentiate themselves now from their competitors. One of the largest ways in which consumers are deciding who to buy from is based on company values and social responsibility.
Consumers are taking a brand’s values more seriously than ever before. 2020 marked a year of catastrophic headlines about climate change, wildfires, and more. Consumers are observing how brands are contributing to society. Whether it has to do with racial and gender equality or climate change, taking action has become an expectation for brands. In return, businesses everywhere have made substantial efforts to prove they’re a brand worth buying from. These efforts will go a long way in vying for Gen Z’s attention – the most value conscientious generation with an annual estimated spending of $143 billion.
Businesses are Connecting with Shoppers Differently
Consumers want to connect with brands, even if there is less face-to-face communication. As a response, brands have focused on creating meaningful interactions with consumers online. Instead of traditional holiday marketing, brands have tied in sensitive messaging and themes of social responsibility to connect with consumers. This includes messaging and marketing with a sensitive and philanthropic tone.
Source: Think with Google
Consumers themselves are looking for ways to contribute and be a part of their community. The tremendous success of Small Business Saturday was just one example of this trend. The rollercoaster of reopenings and temporary closures left many businesses wondering if they would have to shutter their doors down permanently. Small Business Saturday this year gave many businesses a light at the end of the tunnel and a reason to smile. Local shops were pleasantly surprised at the turnout from customers throughout the country.
“I pushed out a little bit of specials here and there but it was amazing. “It was just busy all day long. It was beautiful weather. People were happy. People were excited.” said Lindsey McBride, owner of House of York.
One thing that has played a critical role in helping both small businesses and multi-location brands is social media. Brands have capitalized on the increased consumer usage of social media as another tactic to reach holiday shoppers. 56% of consumers in the 2020 Holiday Shopping Survey from DMS reported they rely on social media to support their holiday shopping decisions. More businesses are leveraging social media to increase communication, advertise their holiday deals, and showcase products. We can expect to see this trend continue on even after the holiday season.
Aware of the influence social media has on consumer’s shopping decisions, Facebook and Instagram have released new updates to streamline the platforms’ shopping experience. Facebook and Instagram rolled out Shops as a new way for businesses to create “storefronts” out of their profiles. This feature puts businesses right in front of consumers. Businesses can use this as another revenue source to help businesses this season.
Despite the rough year, the changing landscape has created opportunities for businesses to adapt and grow. As we close out the holiday season and look into 2021, it’s important to take a step back and reflect. Every brand needs to analyze what factors improved their brand’s customer experience and which led to turmoil. This will help businesses improve future operational decisions and gain insight into their customer journey.
This holiday season has shown that consumers still want to buy from businesses. Brands with a seamless experience can expect to experience success.
If you’re looking to analyze and elevate your brand’s shopping experience with local SEO and reputation management, speak to one of our experts today.