The upcoming holiday season will experience the lingering effects of 2020 holiday shopping behaviors, as the pandemic changed overall shopping experiences forever. As we approach the holiday season, we marketers can expect to face new challenges at a different level. On the bright side, we can look back at the recent past holiday experiences and strategize accordingly. 

Will 2021 shoppers revert to pre-pandemic holiday shopping habits?

The answer is most likely no. With a new digitized world of shopping, ecommerce habits are instilled in consumers globally. The peak of the pandemic in 2020 called for the holiday shopping experience to be moved in our homes and online. New discoveries are being made and consumers are realizing shopping online may be more convenient to them. Not reverting to pre-pandemic holiday shopping habits might be the perfect gift for retailers this year. Online shopping is a faster and easier approach to checking everything off their loved ones’ holiday wish lists. With that being said, we can expect 2021 holiday spending to increase.

Holiday spending 2020 vs. 2021  

The Old Farmer’s Almanac warns that most Americans should prepare for a “season of shivers,” with “positively bone-chilling, below-average temperatures across most of the United States” this winter.

But there should be warmth in retail sales . . . all the pundits and trades expect holiday sales to be up this year vs. last year. Let’s look at projections on the expected holiday sales this season in 2021:­­

  • Visa: 9% increase
  • NRF: 5% to 10.5% increase
  • Deloitte: 5% increase
  • NPD: 7% increase
  • eMarketer: 9% increase
  • Mastercard: 4% increase

We can expect an increase in average spending overall on holiday gifts this year, up sharply from the average of $616 last year, according to Prosper Analytics. In addition, those aged 35 and younger are expected to help lead sales higher this season, as 75% of them expect to spend the same or more this season. On top of that, the NRF says it expects 90% of the country to celebrate Christmas, Hanukkah, or Kwanzaa this year, up from 87% last year. Consumer confidence has turned upward once again, inching its way back toward the highs seen at the beginning of the summer. Confidence is up for both current conditions and future expectations.

How will these predicted increases turn to reality?

As we discuss the 2021 holiday season, for many it might have already started. Some three in ten shoppers say they will start their shopping earlier this year than they did in 2020. Last year, brands kicked off the holiday deals as early as October leading in a 47% increase in ecommerce sales. Likewise, a survey of more than 1,000 consumers by RetailMeNot also found that two-thirds of shoppers say they prefer to complete all their holiday shopping as early as possible.

  • Data from Deloitte contains a prediction worth noting. Their survey of more than 4,000 shoppers found that while health and safety anxiety has decreased, it hasn’t gone away completely. Some 40% of shoppers report being anxious, compared to 51% last year, so the earlier they can get their shopping done, the better.

In addition to earlier shopping by consumers, this year we can expect to see that brands have already started online deals and promotions. Marketers should consider the foreseeable digital acceleration as we get closer to gift-giving season. It is essential to start connecting with loyal and new customers across digital and mobile channels.

  • A study from Convey shows that close to nine in ten (88% of) consumers say that on-time delivery is important to the overall shopping experience. Additionally, more than half (56%) are more likely to complete a purchase if the estimated delivery date is visible in the shopping cart. Read up on how to combat fulfillment agility here!

The Increased Presence of Digital and Social

The roles of stores and digital are reversing as consumers’ online presence is increasing. Nowadays, in-store shopping is more intent-based and transactional following more utilitarian-based attitudes. Ecommerce is redefining the digital experience calling for a new hybrid reality where brands are looking to simulate an in-store experience at home. In doing so, some main trends to look out for within retailers are styling and how-to videos, live fashion shows, augmented reality try-ons, messaging with sales associates, features offering personalized recommendations, and, rising in popularity, “buy now, pay later” (BNPL) programs. With the use of BNPL growing over the past year, it stands to reason that consumers will be using this option during the holiday season. A Tinuiti survey finds that 14% of respondents will use buy now, pay later to purchase holiday gifts, half (51%) of whom are Millennials.

These new ways to buy are growing exponentially, and within this new hybrid reality, people are discovering and purchasing more on social media. Data from Redpoint Global illustrates that personalization goes a long way. Some eight in ten consumers surveyed say they are more likely to shop with brands that demonstrate they personally understand them by sending relevant, personalized offers this holiday season . . . so can’t figure out what gift to get your loved one? Just hop on Facebook or Instagram for personalized inspiration and curated recommendations on the perfect gift. Looking into focusing on broadening strategy in social media marketing is going to be a staple this holiday season, especially on the social channels Facebook and Instagram. The two apps are built for helping products find people, also known as “discovery commerce,” according to ADWEEK Social ads can be used to spark ideas for the perfect gift for loved ones (or yourself!) and benefit brands through engagement in their ads and ultimately, product sales. Per Smartly.io, about half (52%) of consumers surveyed have found inspiration for a holiday gift from a social media ad, while more than two-fifths (42%) have purchased a gift directly from a social media ad.

With social and e-commerce shopping options increasing their presence, data shows that 62% of holiday spending is expected to happen online, compared to 33% that will be spent in-store (up from 28% in 2020).

Don’t forget about in-store shopping!

Online shopping may be the new norm, but we must not let our focus shift away from in-stores. PwC reports a somewhat less pronounced gap between the share of spending being done online (57%) versus in-store (43%). Discovery will continue to happen on all channels. Stores will drive seasonal spending and excitement, getting customers in the holiday mood with window displays, festive in-store décor, and unique experiences—which play a beneficial role in drawing in foot traffic. With most stores in lockdown last year and more stores open this year, we can predict that customers will be excited to come back— especially during the holiday season, as in-stores are critical at the end of the path of purchasing and people need ready-to-buy products during last-minute shopping.

Here at Marketsmith, we are excited for the holidays and all its joys. Looking to amp up your holiday marketing this season? Let’s connect!