This has been a very unusual year (to put it mildly). So it’s no surprise that the holiday shopping season is also shaping up to be very unusual. Covid-19 is affecting everything, from where people purchase to what they buy, making 2020 look much different from years past for both consumers and businesses.
What exactly is different? How is the pandemic changing holiday behaviors?
A dive into recent data reveals seven key insights about this strange season that every marketer should be aware of:
1. The macro holiday outlook isn’t terrible (but it’s hard to tell if it’s good).
Early this year it looked like the holiday shopping season might be a very bleak one in terms of spend. The good news is that the worst-case scenario seems to have been avoided. Total sales will likely be higher in the U.S. than in 2019.
However, it’s not clear exactly how good the macro outlook is. Deloitte predicts that holiday retail sales will only increase by an anemic 1% to 1.5% whereas the National Retail Federation expects sales to grow by a robust 3.6% to 5.2%.
2. The pandemic is impacting some holiday shoppers much more than others.
Why do the 2020 holiday shopping forecasts vary so widely? Part of the reason may lie in the fact that Covid-19 is affecting the finances of some consumers much more than others. It’s hard, then, to accurately predict how the season will look as a whole.
As Deloitte researchers recently noted, this is a season of “bifurcation,” with a third of all shoppers—and an even greater share of lower-income shoppers—saying they are in a worse financial position than a year ago.
3. In-store holiday shopping is anxiety-inducing for many people.
In addition to financial concerns, people have health and safety concerns this season because of the pandemic. Specifically, the idea of shopping in brick-and-mortar locations worries many. Some 57% of consumers say they are anxious about shopping in-store during the holiday season due to Covid-19.
These anxieties are impacting behavior. According to survey data from AlixPartners, a significant share of shoppers say they are less likely to do things this holiday season like visit stores to browse new merchandise, try products in store, and ask associates for advice in store.
4. E-commerce is set to grow twice as fast because of Covid-19.
If people are scaling back on in-store shopping yet total holiday sales are expected to increase, where is all that spend going? The answer is clear when you look at the data: to e-commerce.
Adobe forecasts that holiday e-commerce sales will jump by a third in 2020, which the firm notes is “two years of predicted growth in a single year.” Researchers at eMarketer are even more bullish. They predict that e-commerce holiday sales will grow by 35.8% (+$50 billion compared with 2019). Impressively, this spike is expected to more than offset a 4.7% decline in in-store holiday spend.
5. The who and how of e-commerce holiday shopping is changing.
E-commerce isn’t just bigger this holiday season. It also looks different from years past. That’s in part because the pandemic accelerated adoption by groups that hadn’t yet embraced e-commerce widely. For example, according to the NRF survey, some 45% of baby boomers say they’ve been shopping online more as a result of Covid-19.
E-commerce is also different in 2020 because of continuing pre-pandemic trends. This includes the steady shift over the past few years from desktops to mobile devices. Adobe forecasts that smartphone spend will grow by 55% year-over-year this holiday season, and will account for 42% of all e-commerce shopping.
6. The timing of holiday shopping is different this year.
With people concerned about in-store visits and increasingly embracing e-commerce, it’s no surprise that the timing of holiday shopping is being impacted.
According to a Deloitte survey, 57% of consumers were planning to avoid shopping during the Thanksgiving period in general to avoid crowds this year and 74% were planning to specifically avoid in-store Black Friday shopping because of crowds. At the same time, Adobe found many consumers were planning to shop online earlier than usual in 2020, with pre-Thanksgiving (November 1 to 22) spend forecasted to jump by 37%.
7. Holiday shopping carts look both familiar and different this year.
According to Adobe data, the top-selling product on Black Friday this year was Hot Wheels—a perennial favorite gift for kids. But on Cyber Monday the two top sellers—the Super Mario 3D All Stars video game and Apple’s AirPods—were both 2020-friendly products perfect for people weathering the pandemic.
Along similar lines, a survey conducted by AlixPartners found the top categories consumers plan to spend more on are apparel, video games, and toys. In other words shopping carts this year will look like the 2020 holiday season itself: both familiar and different.