The world around us has changed significantly in the first three quarters of 2020, however, one thing that has remained certain is that the holiday season is the most important earnings period for retail success. The COVID-19 pandemic has forced retailers around the globe to reduce their physical footprints with store closures and customer limits and to explore new methods of delivering products into the hands of their customers. Across the globe, retail websites have witnessed almost 22 billion visits in June 2020, an exponential growth of 37.5% over January 2020.
According to Deloitte, eCommerce sales are forecasted to grow by 25% to 35%, year-over-year, during the 2020-2021 holiday season, compared to sales increasing by 14.7% in 2019. eCommerce holiday sales are expected to generate between $182 billion and $196 billion this season.
eCommerce, BOPIS/Click & Collect, and Curbside Pickup have soared in popularity as many shoppers are expected to continue to avoid stores over safety concerns this holiday shopping season. With new limits on physical interactions, stores will need to be on top of their game to draw in shoppers. More importantly, these changes have accelerated the need for a future-proof retail strategy, one that is digital lead and fully omnichannel enabled.
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The biggest uncertainty that retailers have on their mind today is: How will shoppers want to make purchases this holiday season?
Retailers are looking at a vague financial outlook, as some may opt to spend less this holiday season, however recent positive reports suggest that shoppers have no plan to change their holiday spend compared to last year, possibly as a way to infuse a bit of joy into a challenging year. Also given that many are forgoing vacations and big-ticket purchases, holiday purchases may just occur earlier and, government subsidies may play a vital role both in how much people spend and when they spend it.
This uncertainty could give any retailer a headache as they look to prepare themselves for an onslaught of online orders. It becomes imperative for the retailers to review the previous year’s customer shopping data to identify the products in high demand and feature those via eCommerce platforms during holiday sales. This also gives an opportunity to retailers to pull out the list of their loyal customers and start communication with them early to ensure top of the mind recall when their customers make their holiday purchases.
Adapting to the New Normal in Retail
According to the latest report by McKinsey, customers who occasionally used online shopping channels prior to the pandemic have quickly become accustomed to it and are enjoying the convenience and germ-free shopping option. Buy Online Pickup in Store (BOPIS) or Curbside has become the new normal as consumers can order from anywhere, drive to the store and have goods delivered to them in their personal vehicles without risking physical contact. Retailers who either didn’t offer or didn’t heavily rely on BOPIS/Curbside before COVID-19 are now welcoming it with open arms.
This year’s Black Friday shopping experience is expected to be significantly different. Some stores might open for reduced hours, whereas retail giants like Wal-Mart have announced that their stores will close on Thanksgiving Day; meaning lesser rush for Black Friday. Retailers are likely to compensate with even deeper eCommerce deals on both Black Friday and Cyber Monday.
Last year Alibaba recorded $38.4 billion USD in revenue globally over the 24-hour online shopping bonanza on the Chinese Singles day. And if numbers are to be believed, this year the figure is expected to touch $45 billion USD with higher discounts on offer. Similar trends are expected for the Christmas and Boxing Day online sales as well.
Navigating through Holiday Shopping Uncertainty
One thing retailers can address now in terms of digital business transformation is to centralise all data — customer, product, supplier and location etc. instead of each department having their own information system, all relevant data can be shared and accessed by a few clicks. Retailers that use real-time data to understand individual shopping preferences and effectively leverage multiple sales channels will be much more successful in securing consumer spend this holiday season. Solutions like master data management allows retailers to view data through a single source, enabling better insights into buying trends and identifying opportunities – both for everyday business and for the holidays.
An uncertain economic climate can dampen the spirits of even the most successful retailers especially during the holiday season, but it doesn’t have to. Brick-and-mortar retailers looking to prioritise their holiday season readiness efforts need to ensure that their eCommerce store resides on solid infrastructure adhering to industry-leading uptime and up to date third-party integrations. Digital-first and omnichannel retailers who tick all of these boxes will find it easy to pivot through an unpredictable holiday season.
Is your retail business ready to meet the changing demands of shoppers this holiday season and beyond? Contact an iVend Retail expert for a free digital assessment of your retail business.