The 2020 holiday shopping season will be very different from anything we’ve seen before. The COVID-19 pandemic is disrupting the retail industry in ways that were simply unimaginable 12 months ago. McKinsey surveys found that consumers are drawn to new streaming services and over 60% have tried new shopping options, from ordering to mobile apps to click-and-collect.
Additionally, nearly two-thirds have ditched established brands or retailers in favor of something new – causing loyalty shock.
To get a better understanding of how shoppers will apply everything they learned during the first lockdown this holiday season and beyond, McKinsey surveyed 3,500 consumers in the US, UK, China, Germany and Germany for its 2020 report France questions Christmas season: managing shoppers’ behaviors in the pandemic.”
The report revealed five key trends this holiday season:
Spending on blockbuster shopping events is increasing while overall holiday spending is falling
Consumers around the world expect their holiday spending to decrease compared to 2019 in all countries except China. However, the study reveals a surprising level of enthusiasm for bargain-hunting on blockbuster shopping days like recent Amazon Prime Day and Singles Day, as well as upcoming Black Friday and Cyber Monday, on which the retail industry depends so much. Eighty-one percent (China: 90%, Germany: 89%, France: 85%, UK: 75% and US: 73%) say they will spend the same or more than last year on blockbuster holiday events.
Anxious Christmas shoppers need empathy
Anxiety and stress among shoppers are a feature of this year’s holiday season. Just over a third, 36%, of UK shoppers are the most anxious, followed closely by the US as 30% of Christmas shoppers report feeling anxious and/or stressed this year. Retailers should be aware of the issues that cause anxiety and show empathy. Instilling confidence in COVID-19 safe in-store environments is a consideration. Ensuring stock availability for ordered items and demonstrating good value for money helps to convince customers. The key this year is how retailers can deliver a more seamless digital experience.
Brand loyalty remains at risk
Forty percent of consumers have made a purchase from a new retailer this year and a third have experimented with a different, often cheaper, brand of product, according to McKinsey’s latest Retail Reimagined report. This trend of declining brand loyalty continues into holiday shopping, with just 11% of US respondents intending to stay with the same retailers they shopped at last year.
Retailers should consider winning back loyalty by understanding what their customers want and targeting them with engaging, relevant gift ideas. Survey respondents reinforced this by saying personalization and engagement on social media will play a key role in their holiday shopping this year – 28% of US shoppers will use social media for holiday research and ideas, and 18% said that personalized campaigns could trigger a gift buy.
Digital highlights this season
Building on their lockdown experiences with online shops and mobile apps, holiday shoppers expect to flock to these channels and others like curbside pickup for their holiday shopping. Across the five countries surveyed, 39% of respondents intend to shop online more during the holidays this year than last year. In the US, digital adoption is expected to drive at least a 19% increase in e-commerce holiday sales. In contrast, only 10% of shoppers intend to increase their spending in physical stores.
Health and safety are top priorities
While the history of Christmas shopping in 2020 is clearly digital, the desire to stroll down festive aisles and browse malls to the sound of Christmas music hasn’t entirely gone away. This year, 43% of US respondents plan to browse stores, down significantly from 65% last year. Of course, intention doesn’t always translate into reality during a pandemic. Seasoned retailers operating under new restrictions need to consider what digital experiences they can offer to replace the desire to browse the store.
Christmas shoppers in every country except China rate universal mask wearing and the use of protective barriers at the checkout as the most important safety features. The availability of detergents and disinfectants is also a necessary safety element in all countries. One-way streets and special hours for older shoppers and other vulnerable groups are also important factors for 31% of US Christmas shoppers.
What it means for retailers
Undoubtedly, the collective consciousness of holiday shoppers has shifted this year and many of the behavioral changes the sector has seen are likely to stay with us for the long term.
For retailers, this means they need to rethink some key elements of the holiday experience, which are best summed up in the top six emerging trends:
• Encouraging Christmas shoppers to buy early: Each Christmas season, predictions are made about an earlier season. But this year, shoppers have several reasons to jump in — to avoid store crowds, shipping delays and stock-out issues. Smart retailers are driving demand by creating early Black Friday events and sending personalized communications to shoppers, encouraging them to buy now.
• Provide consumers with multiple options for fulfilling orders: Retailers that offer consumers simple options for purchasing the products they want—whether traditional home delivery, online purchase for store pickup or curbside—are best positioned to attract new customers and regain old ones.
• Flexibility of digital infrastructure and operational logistics for customer experience: To capitalize on the expected increase in website and mobile app traffic on key blockbuster shopping days, successful retailers will ensure their digital storefronts and operational backbone are able to accommodate them support rise. This means you’re armed with additional resources for online customer support, live chat and warehouse processing, as well as scaling click-and-collect services.
• Personalisieren und verbessern des Surfens : Einzelhändler, die in dieser Saison gut abschneiden, werden wahrscheinlich auch das Surferlebnis personalisieren, indem sie Daten über Kundenmerkmale und -präferenzen mit Informationen über trendige Urlaubsprodukte zusammenführen, um das Produktsortiment zu optimieren, das jeder digitale Käufer sieht.
Diese Trends sind eine Gelegenheit für Einzelhändler, mit einer großen Anzahl von Verbrauchern in Kontakt zu treten, die neue Gewohnheiten angenommen haben, offen für neue Marken sind oder nach neuen Geschenkideen suchen. Einzelhändler, die sich die Zeit genommen haben, um zu verstehen, wie sich ihre Kunden verändert haben, und die in die Infrastruktur investiert haben, um ihnen Komfort, Sicherheit und Gewissheit bei Urlaubsfluten zu bieten, werden sich in diesem Jahr auszeichnen.