Retail holiday trends have changed drastically over the last few years. Much of that change has been accelerated by the COVID-19 pandemic, with more holiday shopping occurring online last year than ever before. 2020 saw a huge 57% increase in digital growth and a 40% increase in net new online shoppers.
While the demand for excellent online shopping experiences isn’t going away, customers are shifting away from needs to wants. Many consumers are longing to browse and buy in-store, and are keen to return to physical locations.
However, an increase in high street footfall is just one of the 2021 holiday shopping trends we’re expecting.
In this guide, we’ll run through our predictions for the year ahead including:
How a lack of cookies will change marketing strategies and budgets
The emergence of an extended holiday shopping calendar
The changing interests of shoppers
The role of the in-store associates
The impact of an extended supply chain
A Christmas without cookies
GDPR is changing how people perceive cookies, and this will affect retailers’ marketing plans.
In response to government and user concerns about privacy and the fear of breaching new laws, companies are eliminating the means of tracking users — essentially, killing third-party cookies and restricting ways of retargeting users.
The world’s most popular web browsers are already blocking third-party cookies, and Google will follow suit next year (although it is reportedly exploring a privacy-friendly alternative). As for mobile, Apple has required users to opt-in for app tracking since April and has begun restricting advertisers’ ability to follow an iPhone’s device ID, with 20% of iPhone users already impossible to track.
What does all this mean for retailers during the holiday season ahead? In short, it means change. This shift is expected to be the biggest disruption to marketing across the next five years.
Once third-party cookies go away, ad targeting, re-targeting, and personalisation will change entirely. We'll no longer be bidding on ads for individuals visiting our website, and instead target groups that represent those interested in our products.
Retail marketers will need to change their strategy to reach customers this holiday season. With increasing limitations on data collection and the phase-out of third-party cookies, marketers must now focus on first-party data and owned channels. Savvy retailers will therefore spend their holiday budget on more direct-to-consumer (D2C) marketing, and less (though still plenty) on advertising.
Retailers can’t rely on the same marketing tactics as previous years. It’s time to be smarter, redefine loyalty programmes, double down on social (with a 30% increase in social referral expected), and personalise marketing wherever still possible, such as through tailored email campaigns.
An extended holiday calendar is emerging
‘Holidays’ are no longer just Cyber Week and beyond. The holiday calendar is expanding, stretching out for nearly half the year, with spending sprees beginning as early as July.
Even the traditional November Cyber Week itself is getting longer, with promotions expected to start early and last throughout the whole month. But despite the increase in pre-Cyber Week sales, the level of discounts is likely to reduce.
And for those last-minute shoppers in December, Click & Collect will extend the digital season in the other direction: in-store deliveries will make ecommerce purchases possible beyond postage cutoff dates, and retailers who embrace Click & Collect can see online sales continue to increase in the final days leading up to Christmas.
To make the most of this extended holiday calendar, you need to deliver the right messages to your customers. This includes early communications and final reminders about Click & Collect availability. It's also vital to get ahead of inventory planning and allocation to deal with the new periods of high demand.
Shoppers’ interests are changing — messaging needs to, too
The pandemic hasn’t just changed how consumers shop. It’s changed what they want to buy too.
After an extended period of restrictions and a focus on necessities, consumers are set to splurge on experiential categories.
The top three interests for shopping this holiday season will be:
Adventure — Even in winter, there will be a desire to get outdoors
Social — Goods and services that bring people together will thrive, with people valuing ‘making memories’
Luxury — Investment pieces that people can show off will rise
To maximise your success in these areas, retailers must connect with shoppers with messages that resonate and relate to the current Christmas retail trends. It’s important to cater to shoppers’ changing interests and desires. For instance, if you’re selling cookware, you can sell this based on the joy of sharing food, rather than the need to dine at home.
How you deliver messaging also matters. Today’s customers demand connected experiences, so ensure your messaging is consistent across channels. Bringing interactive experiences to life in-store and through digital engagements will take this to the next level.
Store associates will fuel digital growth
The store associate role is on the cusp of massive disruption. As a result, they will become a key link in the customer journey across different channels.
Store associates will become increasingly involved in fulfilling digital orders. Click & Collect will drive more foot traffic to physical locations. So although customers may buy online, they will complete their transactions in-store. To drive repeat business, you must ensure staff are familiar with Click & Collect processes and are equipped to deliver seamless service.
Thanks to technology, store associates can also help shoppers purchase products that are not physically in the store. This might be with a tablet used by staff to show shoppers a wider inventory available online. Plus, with Click & Collect, the order can be delivered to the store.
Providing staff with technology can also help them deal with queries from outside of the store. Nobody knows your shop and its stock better than those on the floor. In this work-from-anywhere world, store associates can handle support cases rather than in-office teams.
And finally, store associates offer unparalleled social reach. Encouraging teams to be ambassadors for the brand is a good move. Giving staff a sneak peek of a Christmas collection and encouraging them to share, for example, can encourage organic online conversations.
To help store associates thrive and boost digital conversions and sales, retailers need to embrace training, collaboration tools, and technology that facilitate easy communication between all combinations of parties — whether that’s corporate to associate, associate to associate, associate to customer, etc.
The changing supply chain will cause inventory challenges
The supply chain has extended, so retailers will have to adapt for a smooth holiday season.
While those who can get ahead of inventory challenges will be this year’s winners, the extended supply chain will mean rising costs for all. It’s predicted that costs will increase by $233 billion across the sector.
The extended supply chain is caused by various external factors at all points including:
A shortage of raw materials and workers at the manufacturing stage
Increased container costs, COVID-19 restrictions, and more demand affecting logistics
Fewer associates, wage increases, and decreased customer satisfaction impacting stores’ performances
There are two crucial elements to dealing with the supply chain changes:
Getting ahead
Communicating early, and clearly
To get ahead, improve your merchandise agility and visibility both in-store and online. Utilise out-of-stock notifications so that customers do not waste in-store journeys or receive frustrating refunds post-purchase. You can also limit popular goods to ensure that more shoppers have the chance to buy them. Accepting pre-orders ahead of the season can help with easier demand planning too.
As for communicating early and clearly, educate your shoppers as soon as possible that there may be changes this year. Encourage shoppers to buy earlier than normal and create a sense of urgency, without panic. Incentivising behaviour that offloads strain, such as Click & Collect, can be beneficial here. By using your data and business intelligence tools to predict sources of delay across your supply chain, you can be transparent with your customers and minimise disappointment.
Learn more about retail holiday planning
Want to know more about how to prepare for the 2021 peak shopping landscape and the tools that can help you achieve your holiday goals? Visit our New Holiday Retail Planning Guide.
