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How the Christmas shoppers are planning their purchase in the United States in 2020

Published on 7 December 2020
Christmas shoppers planning US 2020
Shubham Agrawal
Shubham Agrawal
Product Manager

Shubham Agrawal is a product manager at Applexus. He loves solving problems at the intersection of business, design & technology. With domain knowledge across retail, e-commerce & analytics, he believes that customers should be the forefront of a great product and the product should be on the leading edge of innovation. He holds an MBA from the Indian Institute of Management, Kashipur

COVID-19 is disrupting everything this year including how the customers are shopping Christmas presents for their dear ones. The uncertainty that the pandemic raised has broadened consumers’ desire for choice and has brought about abrupt changes in their behavior.

Below is a graph from statisa which shows the rise in holiday retail sales in the US from Year 2000 to 2020.

In the year 2019, 114 million US customers shopped on Black Friday.

Holiday retail sales in the United States from 2000 to 2020

Holiday retail sales in US from 2000 to 2020

People have begun their holiday shopping earlier than ever before. Even though the amount spent on gifts hasn’t changed much from the preceding years, what consumers are buying is entirely different this year. Gift experiences, such as a day at the spa, or a zoo or museum membership, have been really popular in the past. But this year, there is a significant shift into going more traditional and tangible while they consider buying the gifts. In addition to this they have also changed the way they shop as well. Customer have started to shop more from digital channels such as click and collect, Buy Online Pick-up at Store (BOPIS) & through brand’s own ecommerce website. Hence to win the changing behavior and needs of customers, companies need to transform and innovate the in-store operations and provide a superior branded experience across channels.

Holiday shopping is now all about convenience and safety

We see that consumers are more cautious when it comes to spending their expendable income in many countries; especially in those regions that were hit hard by the pandemic. Interestingly, despite their caution, we can also see that customers are less likely to pre-plan their purchases on Black Friday and Christmas Holidays, and are more likely to search and make spontaneous purchases from online. As customers are browsing several categories online, this is a significant opportunity for retailers to sharpen their promotions and optimize cross-selling opportunities.

A good many number of people are going to take advantage of online purchases, pick up curbside, and they are definitely going to look forward taking advantage of big shopping holidays.

According to a survey conducted by Simon-Kucher & Partners, this year it will be crucial for retailers to draw customers through all available online marketing platforms to their online stores and provide them with a unique shopping experience, such as design corners or live influencer events, to improve cross-selling and up-selling opportunities.

Compared to last year, how interested are customers in shopping for the holidays?

customers interest in shopping for the holidays

With 47 percent of users expecting to buy more online this year, e-commerce is continuing to boom like never before. With a reduced amount of foot traffic to brick and mortar stores predicted this year, retailers will have to look beyond conventional approaches they have relied on in previous years, such as door busters and experiential shopping activations. Omnichannel, however, remains the spice for this holiday season, as customers search for gift ideas on various digital platforms.

How can retailers leverage the opportunity?

The global perception of holiday shoppers has transformed post the pandemic and the shifts that the retail industry has undergone are likely to remain with us for the coming years. That means this is the right time for retailers to reconsider the core elements of experience they want to extend to their customers in this holiday season based on the behavioral shifts as follows:

  1. Switch to digital: In the past few months, digital adoption across industries has increased significantly. Virtual visits were multiplied over the span of just 15 days. According to the McKinsey survey "2020 Holiday Season: Navigating shopper behaviors in the pandemic", 39% of respondents are planning to shop more online this year during holidays than they did last year. Digital adoption in the U.S. is projected to translate into an increase of at least 19% in its e-commerce holiday sales growth. Dependency on digital had therefore increased exponentially and a large amount of online usage is still expected to persist after the pandemic is over.
  2. Move to basics: The rise in digital shopping has not reversed the overall decline in consumer spending. During the recession, one-third of Americans have disclosed a drop in their household income, and 40 percent says that they are likely to spend more carefully after the pandemic. Consumers, in turn, expect to spend less on luxury categories such as clothes, cars and travel, while spending more on basics such as food and household supplies.
  3. Impact to loyalty: Three-quarters of US customers have changed something about the way they shop since the pandemic started, including one-third who have tried a new form of shopping such as delivery or curbside pickup and almost one-third who have tried another store. The primary explanation for this sudden change to various brands is value, which means cheaper costs, discounts, larger package sizes, or less costly shipping.
  4. Fresh holiday outlook: Only 19 percent of Americans are positive about the United States' prospect of a rapid economic recovery. It is therefore not shocking that 42 percent of US customers are planning to spend less on holiday shopping this year than last year, and nearly half expects to do more online shopping through multiple generations. It's also likely that more buyers will seek blockbuster holiday sales this year in line with the renewed emphasis on value.

Focusing on these core elements are an opportunity for retailers to engage with vast numbers of customers who have embraced new patterns, are open to new products, or are searching for new ideas for gifts. This year, retailers who have taken the time to consider how their clients have changed and invested in the infrastructure to provide them with comfort, protection and security at holiday surge levels are going to thrive ahead of the traditional players.

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