November 2020 will be remembered by many as a month of countdowns and waiting. The US election results were, and still are, a tense affair, Brexit negotiations are teetering towards an impending deadline, the vaccine race to help end widespread COVID-19 is progressing and the John Lewis Christmas advert finally went live.
It is also the month of a second lockdown in the UK, slated to finish at the beginning of December. In this post from the changing behaviour series, we look at what type of consumer might emerge from this second lockdown and break down what patterns of behaviour from Christmas 2019 might mean heading into this year’s festive season.
From March to June of this year the only retail option available to consumers, aside from ‘essential’ shopping, was to buy online. Upon reopening, from June onwards, there was the option of both. However, according to Helen Dickinson of the British Retail Consortium, “Lockdown appears to have permanently changed some consumers’ shopping habits, with online sales continuing to boom despite shops reopening in June”.
And yet, looking ahead to December and holiday shopping, whilst the impact of COVID means consumers expect to spend less – 57% still see physical stores playing a role.
We saw earlier in the year the pent up demand of shoppers queuing up for hours to get into non-essential retail stores, such as Ikea, Primark and SportsDirect after the initial lockdown. Whilst the weather may dampen spirits, the likelihood of queues emerging once the lockdown lifts remains high as the allure of the high street during the holidays is likely to entice people into stores.
There’s no doubt that digital transformation has accelerated throughout 2020. Online delivery for grocery has doubled since this time last year, even though it still remains only 12% of overall sales. However, it will take years for businesses to adjust fully if this trend is to continue. It’s also highly unlikely that many retailers will be able to fulfill the Christmas demand over the coming months solely through online channels. Looking at Blis data, we can see that despite rising case numbers in the runup to the second lockdown, visitation to physical stores continued to increase as it seems many consumers were eager to seize any opportunity to return to ‘normal’.
In ‘normal’ years there is a cut off date for Christmas week delivery. As more consumers shop online than ever before these delivery slots will become increasingly scarce while online queueing becomes more prevalent. We saw this with Tesco recently, who released their online delivery slots for the final week of Christmas and saw the slots sell out as quickly as pre-orders for the latest Xbox or Playstation. This cut off date correlates with the last minute surge as we see spikes of activity in physical stores during this final week, after the point of no guaranteed delivery.
This becomes evident when we look at patterns from Christmas 2019, with many consumers seeking out last minute presents rather than winding down for the holidays. Looking at the balance of foot traffic between Food & Drink and Retail we can see that Retail assumes an even greater share of visitation entering the final few days, commanding as high as 42.5% of all visits to physical outlets.
Christmas Day, this year, falls on a Friday and will see most schools breaking for the holidays a week before, on Friday 18th December. From our data, we can see that last year, Monday 23rd was the busiest day, the last full day of trading before the holidays as consumers scramble for their final gifts. With three full trading days preceding Christmas Eve this year there is an even greater opportunity to generate last minute shopper traffic and capture consumer demand which may have passed the Christmas delivery deadline.
Interestingly, Electronics and Clothing over-indexed last year versus the category on Christmas Eve despite the strength of rival online native retailers. This is perhaps as a result of consumers placing greater trust in being able to walk out of a physical store with an item, with plenty of time to get it under the tree. Given the pressure in 2020 on delivery networks this may be an even more important opportunity for these retailers and by ensuring there is adequate stock, support and awareness of the solution in store they stand to make the most of last minute physical visits.
Following a second lockdown and a tough year, consumers are keen to enjoy the 2020 holiday season. As a result, physical retail will assume great importance in the runup to the end of the year, thanks to pent up demand and limited leisure opportunities. Last minute sales with retailers seeking to offload any stockpiles may turn this period into a greater frenzy, combined with greater strain on delivery networks and shoppers keen to be assured of their purchases pre-Christmas.