Preparing for Peak Holiday Shopping Season During a Pandemic
Holiday Readiness

Preparing for The Peak Holiday Shopping Season During a Pandemic

Hugh Fletcher
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September 14, 2020
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Read Time: 6min

When times are tough, the strength of the relationships you form with your customers becomes absolutely critical. The foundations for maximizing revenues lie in building trust and loyalty. That depends partially on getting your communication right and creating the right experiences, which is especially important during the peak holiday shopping season. But before you can do that, you really have to zero in on who your customers are and what they want.

Know your customers

The figures suggest that, if you want to up your average spend over the peak holiday shopping season, you should be targeting younger shoppers. Customers ages 25-34 years old had the highest average spend over the Black Friday period last year, according to Wunderman Thompson Commerce’s independent research. This group spent an average of $161—well above the average of $96.34 across age groups, and almost four times the $43.84 spent on average by consumers aged 55+.

Younger shoppers are more open to the idea of upping their spend over the peak holiday shopping season, too—just 12.6% said nothing would convince them to spend more, compared with 51.7% of consumers aged 55+. And for any retailers who feel competing with Amazon over the peak shopping period is becoming an insurmountable challenge—16-24 year olds spent the lowest proportion of their money through Amazon of any age group last year (29.9% of overall spend), while nearly three quarters (72%) told our Future Shopper survey that Amazon wasn’t the right place to find the brands they want.

Of course, retailers cannot simply switch all of their attention to younger shoppers only. There is an equally valid argument that says finding ways to encourage more reluctant shoppers to up their spend is an even better strategy for boosting revenue because it unlocks untapped potential. It’s also worth noting (and a great opportunity) that an eye-watering 61% of UK consumers didn't purchase anything during last year’s Black Friday period.

Across age groups and demographics, retailers need to understand what will motivate consumers to spend more. When we asked shoppers this question after last year’s peak season, the top answers included bigger discounts (44%), discounted/free delivery (23%), easy/free returns, and faster delivery (both 18%).

Adjusting Your Strategy to The New Normal

The truth is, as the COVID-19 pandemic continues to rage worldwide, it is hard to say with any certainty what the peak holiday shopping season will be like.

After the last few months, retailers are hoping we will have taken a step closer to normality by November/December, but the potential for a second or third wave this winter casts a dark cloud over this year’s Black Friday preparations. A disrupted peak holiday shopping season could prove an almighty challenge for many businesses, particularly in non-essential categories like fashion which was already hit hard by lockdown store closures earlier this year.

Planning in the face of so much uncertainty is never easy. There are a couple of solid working assumptions we can start from, though. One is that, even if another wave of lockdowns doesn’t happen, demand will be down. Last year, a quarter of UK shoppers (24.8%) said Brexit directly influenced their decision to spend less over the peak holiday shopping period. Given the financial turmoil COVID-19 has created, the impact on jobs and so on, we can assume that that figure will be much higher in relation to the pandemic.

We can also assume that this year’s peak will see a further significant shift to digital. 69.5% of Black Friday spend went online in 2019 according to our survey. Given the increased exposure consumers have had to digital shopping during the lockdown and ongoing nervousness about heading into stores, that figure could again be higher.

In order to minimize the damage decreased demand will do to revenue, retailers have to think creatively to maximize every available sales opportunity this peak holiday shopping season with a larger-than-ever emphasis on digital. Let’s look at some strategies for how these might be achieved.

1. Don’t just count on discounts

Discounting is an obvious one during the so-called "sales" period and links into a bigger question around pricing and promotions strategy. But free delivery and returns are more straightforward incentives every retailer can consider as part of their holiday discounting strategy, especially as momentum shifts increasingly towards digital. In our Future Shopper 2020 survey, with data gathered early in the lockdown as much retail activity could only happen online, more than half (54%) of our respondents said free delivery would encourage them to shop directly with a branded site, rather than, say, Amazon.

The Future Shopper survey gave us some more valuable insights into consumer preferences in the context of COVID-19. Overall, the shift in emphasis towards digital was clear. Asked what was most important to them in making a purchasing decision, the joint second-highest factor cited after price (by 94% of respondents) was availability to buy online—an obvious priority when in-store shopping has been so severely disrupted.

In addition, more than half (52%) told us they wished the brands they bought from would be more digitally innovative. So, a message to take from this ahead of the peak holiday shopping season would be, make sure all of your stock lines are available online and innovate with your channels and technology. For example, more than a quarter of consumers (27%) are now using voice assistants to help make purchases. And close to 1 in 3 products (28%) now bought online are digital, i.e. downloads and subscriptions, with a third (34%) of consumers saying they prefer this option if available. It is worth looking at what options you have to digitize your product range.

Finally, certain categories and types of product have performed better than others through the pandemic, and these give us some clues as to what the best-sellers might be during this year’s peak holiday shopping season. Health and wellness products, which also extends into diet, food, cookery, and kitchen utensil categories, are likely to perform well as the pandemic puts health right at the top of our collective conscience.

In addition, home entertainment, and gadgets have been big winners throughout the pandemic so far, and historically Black Friday and Cyber Monday, in particular, see large volumes of electronics selling at discounted rates. With more time spent at home, there is a feeling that family members of all ages have had time to become familiar with tablets, games consoles, and smart appliances, and that these will therefore feature highly on holiday gift lists this year.

2. Focus on experiences, not just transactions

Once you have a strategy in mind based on understanding who your customers are and what they want, the second part of the jigsaw is providing the experiences that will encourage them to spend more with you.

While discounts and promotions, as always, will be a critical part of your peak holiday shopping strategy (not least because consumers are feeling the financial pinch), it is important at this time to look at the bigger picture beyond sales. Customers want products, yes. But they also want reassurance, support, the feeling that they are buying from brands that care. Black Friday 2020 could end up being the first ever to take place under an enforced lockdown. In that case, it is important to position yourself as supportive and engaging, rather than overly commercial and potentially exploitative.

On your digital channels especially, much of this boils down to optimizing your content and understanding the role it plays in customer journeys. The old-fashioned linear ‘sales funnel’ is dead - modern consumers take all sorts of paths through inspiration and discovery, using multiple different channels, before deciding to buy. Your content is what locks them into your brand. For that reason, your content and the experiences you create have to work seamlessly across all channels, across both marketing and commerce operations.

Nowadays, you have to be ready to engage where you sell and sell where you engage—that’s what we mean by an omnichannel approach.

Experiences and engagement start with messaging, and as we have noted, there should be a big emphasis on reassurance this year. This obviously relates to getting your COVID policies right. If stores are open, use your digital channels to promote what measures you have put in place around social distancing, staff protection, and so on, how you intend to mitigate the impact on the in-store experience in terms of waiting times, etc. Letting people know what to expect will go a long way to addressing concerns.

There is also a more general need to address a certain amount of skepticism around Black Friday and other peak season events. Last year, 59.9% of shoppers said that they thought that Black Friday deals are misleading and only 27.9% of consumers believe that they get the best deals of the year during Black Friday. In the wider context of reassurance and building rapport, transparency over deals will be essential this year.

Finally, perhaps the strongest overarching narrative you can create around this year’s peak campaign is this—we’ve all had a long, tough year, and we’re not out of the woods yet; but right now you deserve a treat. We know that a majority of shoppers use the Black Friday period to do some of their holiday shopping (64% of consumers last year), but we also saw 41% of people treating themselves to something in 2019.

The holiday gift trade is guaranteed, although we may see revenues from it fall as consumers become more cautious with their spending. Pushing the "self-gift" trend with the right "treat yourself" messaging and product placement to encourage cross-sales could go some way to counter this.

Finally, take care not to come across as trying to cash in, at a time when many consumers are struggling. Think about balancing your more overt promotional tactics with community-based or charitable gestures—perhaps donating a small donation per sale to the NHS or local charities for example.

Author

Hugh Fletcher

Hugh is an internationally sought after digital commerce futurologist, heading up the Thought Leadership team at Wunderman Thompson Commerce. As an ex-Audi digital guru, Hugh uses his client-side experience and unique take on the future of commerce to help organisations set up for, and implement, digital change in the constantly evolving commerce market. His work focuses on helping ambitious Clients to transact more digitally through strategic consultancy, covering digital business transformation, the future of ecommerce and conversion. He is a go-to spokesperson in press and TV for tech trends impacting ecommerce, and author of reports, white papers and articles covering future shoppers, Generation Alpha, Digital Commerce Leaders and peak selling.