Holiday shopping seasons like never before – how can brands plan?

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This blog post is a collaboration between Chase Buckle, Trends Manager of market research firm, GlobalWebIndex and Blis’ Head of Insight, Alex Wright.

It’s probably safe to say that given how the first half of 2020 went, retailers will be pinning their hopes on the upcoming holiday shopping season. But what’s in store for retail brands and what do consumers want, given the continued COVID-19 threat, especially with the back to school period looming, as the first major seasonal milestone? With major events and holidays coming up, brands are looking to understand the trends that could guide their campaign thinking, while uncertainty and anxiety lead the way in consumer thinking. 

This blog post, another collaboration with target audience company, GlobalWebIndex (GWI), reveals the answers to these questions, by comparing what people say (in consumer research) vs. what they do (in the real world).

Back to school:
This back to school shopping season will be anything but normal, with the ambition – rather than the assumption – that all children will be back in the classroom. A recent Deloitte survey reported in Forbes showed that instead of stocking up on new clothes, uniforms and notebooks, spending will increase on tech gear like tablets, computers and phones. Using grocery shopping as a barometer for return to normal, as this sector has been open throughout the crisis period, Blis data currently has UK shopper volumes at 40% of what they were at the beginning of 2020. If the average rate of recovery continues, we expect to see close to 70% by the end of the year.

In terms of consumer sentiment, GWI data showed that when looking at an audience of parents with children under 16, that audience is more likely to want normal service to resume than non-parents – perhaps an indication they’re looking forward to other things than childcare. They’re also keener to visit shops, so may be more accommodating of  in-store retail when buying for back to school.

Though you might have been expecting a more cautious parental mindset, the data says otherwise. Nevertheless, parents will be seeking convenient collection options and a safe in-store shopping experience. It’s also important to keep in mind that, along with the ‘thrift mindset’ we talked about in our prior blogpost in this series, Confidence vs caution, parents may be looking to cut back to just the basics to conserve the family wallet. 

Black Friday:
From tentative trends GWI is seeing, consumers are being more optimistic about their own finances, and moving more into searching for cut-price discounts. Black Friday could be a great event to take advantage of this sentiment, especially for electrical retailers. According to Blis data, retailers in the electronics sector seem to be recovering more quickly than other retail verticals (in the UK in particular).

In the US, Walmart have announced, however, they will be closed on Black Friday, which, given the circumstances, seems like a smart move. Perhaps other big box retailers will follow suit, with new outbreaks continuing to pop up worldwide and volatility likely to continue. It’s clear that contingency planning is essential for this year’s holiday shopping season.Online shopping has broken new ground during COVID-19, especially with older shoppers.

Online sales made up 22% of 2019’s Black Friday sales – equivalent to Black Friday 2018 – but with a stronger trend toward ecommerce (with 33% of total retail spend occurring online in May). We speculate that Black Friday may be a bigger contributor to early holiday shopping this year than normal, as people concerned with a second wave seek to get their presents purchased early, so they’re not caught out. In the UK, three in four consumers say they’re concerned about a second wave, with one in four saying they’re extremely concerned, according to GWI.

Holiday planning:
GWI data shows that, true to the shift online in shopping behaviors, the majority of consumers say they’ll do most of their holiday shopping online (around 40%). But this isn’t just something GWI is seeing among younger age groups, like many would expect. Figures are above 40% for every age group. Additionally Ebay reports that 27% of UK consumers are planning to start holiday shopping and preparing for the festive period earlier than usual.

The best litmus test Blis can offer regarding holiday planning is based on footfall analysis in the US in the run up to public holiday weekends in 2020 thus far (President’s Day, Easter, Memorial Day and July 4th). Blis data showed that while the holiday weekends in the first half of the year provided a bump in store visits, the lead-up period represented a disproportionate opportunity for retailers (and therefore advertisers) versus any normal 10-day period. However, it is imperative to consider the current virus situation in this equation, as both Easter (during the initial peak) and July 4th (while the virus was halfway to its second peak) were negatively impacted when compared to Memorial Day (during a period of virus decline). Online delivery, particularly for groceries, will play a bigger role than in holiday seasons past – so if the virus is in the ascendancy, consider switching messaging to drive shoppers down the ecommerce route.

Complimenting this, GWI data shows that over 40% of consumers expect to shop online more often post-lockdown, and this figure is rising. Additionally, GWI asked consumers in the UK and US whether their holiday spending will change after the coronavirus outbreak. Just as the majority (around 40%) of consumers say they’re financial situation is “ok” at the moment, a similar rate (around 40%) also say they will buy/spend as they normally would during holiday shopping. The US seems harder hit, however, with almost a quarter surveyed saying they’ll spend less, compared to under a fifth in the UK. Expect many to take advantage of sales to bag their items too (over 25%).

Recommendations:
With the festive season looming, we have five key recommendations for brands, derived from both Blis and GWI observations:

  1. Continue to emphasise convenient and safe collection points to drive consumers into store.
  2. Be prepared to capture share, with early holiday season gifting campaigns.
  3. Don’t ignore the 10-day lead up to a holiday for grocery campaigns
  4. Holiday spending is still ‘a go’ for consumers, but expect them to get more creative, using more channels to research and bargain hunt for presents and essentials. 
  5. Contingency planning is essential, as brands will still need to be covid-flexible. Don’t be caught out without one.

In summary, the 2020 holiday season is sure to be a shopping season like no other. Brands will need to be prepared for any contingency, taking the lessons from the first COVID wave, sentiment analysis and real-world behaviour to guide their way.

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