Retail Radar: 2020 Holiday Predictions: What to expect over the coming weeks

November 25, 2020
5 min read

The year is coming to an end, and with it brings what is typically the busiest time of the year. But the holidays in 2020 will undoubtedly look different than before, and so will holiday shopping. With the pandemic still a concern, hesitation to visit stores persist, meaning more consumers will head online for their shopping needs. But the bigger questions are, where will they shop? And what will they buy?

Here’s a look at what to expect this holiday season.

Holiday shopping began earlier than ever, yet delays signal the potential for an extended season

The normal cadence of holiday shopping, which gets earlier each year, has changed in 2020. With the pandemic throwing a wrench in Amazon’s normal Prime Day schedule, the retailer moved its annual two-day event to mid-October, causing competitors to react with similar sales events. This resulted in kicking off the holiday shopping season, as some retailers didn’t shy away from using “Black Friday” or “holiday” in their marketing. Just because many consumers got an early start on their holiday shopping, that doesn’t mean there won’t be a last-minute scramble for gifts, particularly given the anticipated shipping challenges. Retailers including Madewell have already sent emails to customers, urging them to shop early and offering early deals with warnings of delayed packages if consumers wait to shop. Inevitably, there will be consumers who experience more frustration than joy given these challenges.

This could have a potentially beneficial side effect – given the expected delayed arrivals of gifts, the surge of returns that typically follows the week between Christmas and New Year’s may also be delayed. This means spending associated with returns and exchanges could potentially trickle into January, helping to spread out the sales over a longer period of time.

Convenience and conscious consumerism influences purchases

This is the year for eCommerce when it comes to the holidays. For the first time in Mintel’s winter holiday shopping research, more than half of consumers said they plan to do the brunt of their winter holiday shopping online this year. More than ever before, consumers want convenience, particularly so they can limit time spent in stores. This means shoppers will be seeking services they didn’t use during last year’s holiday season but have tried during the pandemic. Services such as curbside pickup weren’t widely available at apparel retailers, nor were they as widely used by consumers for non-essential purchases, but now retailers such as J.Crew and Bloomingdale’s are offering the service and shoppers are using them. This need for convenience will also prompt consumers to do things such as shopping through social media and look for try-before-you-buy options, both of which provide seamless shopping and provide reassurance, which is particularly important when gifting.

Another purchase driver this holiday will be less about the gift itself and more about the business behind it. Consumers have grown increasingly conscious, especially since the pandemic has proven difficult for small businesses in particular. In the hopes of supporting their local community, interest is growing among consumers to shop small and shop local. Some small businesses have responded to meet the demand by piloting some of those aforementioned convenient shopping options, such as curbside pickup and the ability to shop through Instagram. An example comes from ShopinNYC, a Brooklyn marketplace that curates local businesses to one central site, and even offers same-day delivery, so shoppers can support their community while still getting the convenience they need. According to Mintel research on holiday shopping, more than two-thirds of shoppers have shopped local businesses and would do so again, and less than one in five haven’t shopped local but are interested in doing so. As the #shoplocal movement grows and more convenient options to shop small become available, expect to see more consumers shopping small businesses for their holiday needs.

The tech effect

Some consumers will be scaling back this year, given the difference in celebrations and the financial struggle many are facing. Yet, gifting will still happen and some consumers may take advantage of the holiday to trade up on bigger ticket, but high use, items such as phones, laptops and their accessories. Anything that enables connectivity will continue to be a “hot” holiday item. The same is true for leisure and entertainment items, including high-tech gaming consoles, but also traditional items such as puzzles and board games. Since many consumers will be celebrating differently, anything that enables connectivity and bonding without having to be in person will be top of mind. This likely means less spending on clothing, in favor of more useful gifts, although expect to see those who are buying apparel to seek comfy, cozy clothes such as loungewear and pajamas. Similarly, the restrictions placed on in-person entertaining mean gift cards will have a big year, especially those that can be purchased and given digitally or virtually, mirroring the way many will be celebrating.

Why does it matter?

This holiday season will truly be one unlike any other. Consumers are stressed and concerned and many are looking to the holidays as a chance to finally have fun and celebrate, but how they do so will also be different than in the past. Retailers must be nimble to adapt as the pandemic unfolds and consumers’ sentiments (and consequently their needs) also change.

Alexis DeSalva Kahler
Alexis DeSalva Kahler

Alexis is a Senior Research Analyst at Mintel. Alexis focuses on US Retail and eCommerce reports.

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