It’s never too early to start humming holiday tunes. Ok, it may be a touch early for Silver Bells, but a little holiday prognosticating, especially considering the unique holiday season on the horizon, is always welcome. Our team of marketing minds here at Digital Media Solutions (DMS) has taken a look at 2019 holiday shopping trends, stacked them up against consumer behaviors in 2020 and taken a crack at predicting what it all means for this year’s holiday season. Read on for DMS 2020 holiday season predictions:
Will Holiday Retail Sales Grow Year Over Year?
In 2019, holiday retail sales grew 4.1% from 2018 results to reach $730.2 billion.
In 2020, despite pandemic-related uncertainty, the summer saw three months of sustained rising retail sales, although foot traffic to brick-and-mortar stores remains down as much as 43% from last year and YOY retail growth has slowed. And, although 59% of respondents in a recent Service Management Group survey said they plan to spend the same amount during the holiday season as they spent last year, only 20% plan to spend more. In addition, holiday gatherings are in doubt, meaning not every favorite aunt will be able to deliver gifts in person.
= For the 2020 holiday season, we predict retail sales growth, especially in select categories.
With unemployment hovering around 8%, and many consumers tightening their purse strings, we predict retail growth in non-essential items (including holiday gifts, especially for those outside of immediate family) will grow — but at a slower rate in 2020 than last year, as consumers prioritize essential items. However, it’s likely that store reopenings around the country, and consumers feeling excited about the holidays after a rough year, could lead to robust sales in some retail sectors, including housewares, appliances and electronics.
Will Mobile Be A Major Player This Holiday Season?
In 2020, mobile ecommerce sales are predicted to be $339.03 billion, up from $268 billion in 2019, likely a result of increased reliance on ecommerce overall during quarantines. However, a resurgence in desktop use because of work from home has led to an increase in desktop searches during 2020.
= For the 2020 holiday season, we predict continued mobile growth.
The uptick in desktop use is likely short-lived, because, though some people will continue working from home, many will be back in the office and commuting. In general, it’s likely people will be out and about more, which could increase mobile purchases, particularly if consumers are being served targeted ads through social media and optimized apps. Recent additions to social media platforms, like Facebook and Instagram Shops, Snapchat Brand Profile Pages and Pinterest’s Shopping Spotlights, are also going to increase access to turn-key purchasing on mobile across consumer groups, leading to another record-setting year for mobile sales.
Will Promotions And Coupons Be A Major Part Of Holiday Shopping In 2020?
In past holiday seasons, many retailers were able to leverage promotions and deliver “conversion-rate increases roughly three times that of retailers without similar sales” during the holiday season, according to McKinsey & Company. For example, Kohl’s gave 25% off coupon codes for certain days in December, and consumers that spent more than $50 on Black Friday were given major discounts or cash for future holiday shopping.
In 2020, digital coupon apps like Target Circle and Ibotta offered ways for consumers to save, and more than six in 10 U.S. adults will use digital coupons this year. When used judiciously, coupons and promotions are being touted by retail insiders as a smart way to offset downturns that may happen this holiday season because of economic anxiety.
= For the 2020 holiday season, we predict promotions will be essential.
Consumer concern about the economy will almost certainly drive holiday shoppers to seek out discounts and promotions. And, with the dominance of ecommerce, retailers will undoubtedly include coupons and promotions as part of their digital strategies, and these strategies could be effective as more retailers make a play for some of Amazon’s business. In addition to seeking out promotions, consumers are also likely to read reviews and compare prices across retailers, as they focus on getting the best bang for their buck. According to a recent study by Service Management Group, one third of respondents said “value for the money” was the “most important factor” when choosing where to shop this year. Brands would be smart to focus on cost-savings for consumers when it makes sense for their brands and business objectives.
Will Ecommerce Dominate This Holiday Season?
In 2019, online and other non-store sales during the holidays were up 14.6% YOY. (Non-store sales typically refer to direct sales, telemarketing, catalog sales and similar.)
In 2020, ecommerce sales increased 44.4% YOY in the second quarter of the year, for a total of $200.7 billion. Ecommerce is the most significant silver lining of the pandemic for retailers, with brands like Amazon seeing a 40% revenue jump from the same time last year.
= For the 2020 holiday season, we predict ecommerce will be a major factor.
Many consumers, who’ve grown accustomed to online ordering, will avoid crowded stores and take advantage of brands launching multichannel digital strategies targeting holiday shoppers with promotions intended for use on their ecommerce sites. Upsell offers and a variety of last-mile delivery solutions will also factor within ecommerce strategies and results this year.
Will BOPIS And Other In-Store Fulfillment Options Be A Factor This Holiday Season?
In 2019, buy online pick up in store (BOPIS) grew 35% YOY, and 71% of shoppers said they'd prefer picking up their order in stores rather than pay for expedited shipping during the holiday season.
In 2020, between March and June, BOPIS orders rose 367.2% due to increased use of ecommerce while many stores were limiting crowd sizes and many consumers were avoiding public places. Plus, heading into the holidays, many retailers are concerned about shipping costs and limitations.
= For the 2020 holiday season, we predict many consumers will choose alternative pick-up and delivery options for their purchases.
Alternative delivery options will be leveraged frequently by consumers this holiday season as consumers look to reduce shipping fees and retailers promote in-store fulfillment strategies that mitigate increased shipping costs from couriers. The consumer behaviors acquired during the pandemic will be easy for many consumers to continue, including curbside pick-up and BOPIS.
Will Consumers Start Their Holiday Shopping Early This Year?
In 2019, the seven days before Thanksgiving saw 26% sales growth YOY, and other shopping days, including Black Friday, Small Business Saturday and Cyber Monday, also saw double digit sales jumps.
In 2020, in order to decrease concerns about crowds, several major brands including Target and Walmart have called off Thanksgiving Day shopping, with speculation that ecommerce campaigns may launch earlier and replace “doorbuster style” brick-and-mortar sales.
= For the 2020 holiday season, we predict holiday shopping will start earlier.
Retailers concerned about shipping delays and meeting the crush of ecommerce orders are going to lean heavily on early sales, allowing consumers longer lead times for delivery while retailers and manufacturers spread out demand for top products. The growing comfort across generations, including Baby Boomers, with online ordering could mean an early shopping push from people still staying primarily at home, and likely big ecommerce wins for the Thanksgiving shopping weekend.
Brands And Businesses Must Respond Proactively With Digital Marketing Solutions To The Trends That Will Shape The 2020 Holiday Season
Consumer behaviors will largely dictate the holiday trends this year, but, like so much in 2020, the holiday season may hold some surprises and will require brands to stay smart and ready to adjust as needed. Taking a hard look at past holiday seasons, and considering the ways in which pandemic-related shifts in preferences and habits could change this year’s holiday shopping, may serve brands well as they plan their digital strategies this holiday season.
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About the AuthorMore Content by Sarah Cavill