What Shoppers and Retailers Can Expect This Holiday Shopping Season

Like everything else in 2020, the upcoming holiday shopping season is full of unknowns. Retailers are facing the challenge of not knowing how much inventory to stock for the holiday rush, while simultaneously keeping the thought of once again preparing for possible lockdowns in the back of their minds.

And shoppers are prioritizing their health concerns this season, with many opting for the convenience and safety of online shopping. According to a 2020 holiday shopping study, more than half (51%) of respondents reported being anxious about shopping in-store over the holidays due to the crisis, leading 65% to prefer shopping online to avoid crowds. In addition, with so many Americans still underemployed or unemployed this year, holiday spending may not be as high as retailers hope for. In fact, 29% of respondents reported that their household’s financial situation was somewhat or a lot worse than it was last year, up from 20% in 2019. And 38% said they plan to spend less during the holidays.

Here are the key points for retailers and shoppers to be aware of for the 2020 holiday shopping season:

For Retailers

• BOPIS (Buy Online Pickup in Store) Is A Must

The opportunity to buy online and pick up in store is expected to be a major player in holiday shopping this year. Consumers are going to be searching for stores that offer this option, in order to get their items quickly without the hassle of shipping costs and shipping delays. It’s predicted that sites offering store pickup (curbside, inside the store, or drive-through) will see a 90% increase in digital sales over the previous holiday season.

• Consider Increased Shipping Costs and Times

When considering shipping costs and speeds, retailers must factor COVID-19 surcharges and delays into their calculations. Some predictions estimate that there could be as much as $4.5 billion in COVID-19 delivery surcharges from the traditional delivery providers such as FedEx, UPS, and DHL. It’s also estimated that parcels shipped by these carriers will “exceed capacity by 5% across the globe between the week before Cyber Week and Boxing Day (December 26^th). ”

• Promote Gift Cards

Make gift cards a major part of your holiday marketing strategy. According to recent data, U.S. retailers sold 114% more digital gift cards in the third quarter of 2020 compared with Q3 2019. Experts predict that gift card sales will continue to surge with less people getting together for in-person gatherings over the holidays.

For Shoppers

• Don’t Procrastinate

If you’re one of those last-minute holiday shoppers, you may want to rethink your strategy this year. New restrictions and social distancing mandates may make in-person shopping difficult or even impossible, so be sure to plan ahead. In an effort to avoid crowds many people will be turning to online shopping for the majority of their holiday purchases. If you choose to shop online, do so in good time to allow enough time for the projected holiday “shipageddon”. The longer you wait to do your shopping, the more you will encounter higher shipping costs, delayed shipping, and limited inventory.

• Expect Shipping Delays

The sheer amount of growth that e-commerce has experienced this year has already put a major strain on the logistics and delivery industry. During this holiday season you’ll have to ship your gifts early if you want to be certain they’ll arrive on time. According to predictions, traditional delivery providers will be so bogged down that they’re forecasted to max out their capacities to the point that 700 million gifts will be at risk of not arriving in time for the holidays.

• You May Need to Get Creative with Your Gift Ideas

If you usually give your family gifts for experiences, you’ll to think outside the box this year. With concerts cancelled, travel limited, and many movie theaters closed it can be tricky to figure out what to buy. Here are a few ideas:

• Instead of a gift certificate for a massage, you could create a spa-themed gift box with bubble bath, candles, and facial creams or masks.

• Instead of a movie theater gift card, consider a subscription to a streaming service.

• Instead of a cooking class, you could purchase a meal delivery kit for a loved one.

Because it is impossible to predict the specifics of the 2020 holiday season, retailers should be as adaptable as possible and maintain an agile mindset. This year has shown us that situations can change at the drop of a hat, so be flexible and be prepared to pivot quickly.

If your retail business is in need of funding to help you prepare for the holiday rush, visit our retail page to learn more about our financing options or apply here.