Retail Holiday Guide 2020: A Very COVID Holiday Season

Editor’s Note: This post is the first installment of our 2020 Retail Holiday Guide. See part two and part three. 

There are things that retailers have come to expect from a typical holiday shopping season. A queue of children waiting to see Santa. Limited supplies of the must-have toys and gadgets. Recording-breaking holiday sales.

But thanks to COVID-19, this year will be anything but ordinary. Retailers will need to strategize how to bring the holiday magic—that is, the customer experience—that will entice shoppers both online and in stores.

In the first of our Retail Holiday Guide 2020 blogs, we examine some of the most pressing questions about this year’s shopping season, including how different regions will address COVID-19 challenges, how consumers will split spending between online and offline channels, and how retailers can position themselves for success.

COVID-19 Retail Strategy Will Vary by Region

What will retail shopping look like this holiday season? A lot of it depends on where you live. In some parts of the country, stores may be at capacity with people milling about, filled with holiday cheer. In other places, the battle for Black Friday deals may look more like a queue of cars waiting in curbside pick-up than the usual free-for-all.

Across much of the United States, the number of coronavirus cases continues to grow at a rapid rate. States that reopened early, sometimes because infection rates were low, now see high numbers of new daily cases.

As a result, businesses across the country are in different modes of reopening, pausing, reversing their retail strategies. While masks are status quo across most of the country, regulations vary in terms of capacity and social distancing. And, on a global scale, concerns about the second or third surge in COVID-19 cases are causing governments, like the UK, to reinstitute lockdowns.

With all this uncertainty, one thing is for certain: a business’ retail strategy must remain flexible this holiday season. Leaders will need to ensure each store knows the basic game plan, but also has enough autonomy to adjust to the conditions on the ground.

Holiday Sales Will Be Different, Not Necessarily Worse

While COVID-19 has impacted many things, it appears holiday spirit is not one of them. In a recent survey, 73 percent of consumers said their holiday spending will either stay the same or increase this year. With declines in spending on travel and experience, more money will likely funnel toward the purchase of gifts.

According to Deloitte, retail sales will increase by 1-1.5 percent year over year. The difference will be in the way people spend. The pandemic prompted an increase in online shopping, and that will apply to holiday spend too, fueling an estimated 25-35 percent increase in e-commerce this year, compared to a 14.7 percent increase last year.

Still, it’s essential not to discount the importance of the in-store experience. Even during the height of COVID-19, online spending still only accounted for $1 in $5 of retail spend.

While many shoppers want to limit time spent in retail locations, 30 percent of consumers have no safety concerns about in-store shopping.

A Slower Pace for the Holiday Rush

The holidays will be less concentrated this year. Many people have used months of isolation as a way to kick-off their holiday shopping. Even for those who haven’t yet started, the shopping schedule will look different.

Consumer spending will be less dependent on Black Friday sales, continuing a trend in recent years. Much of this has been driven by a plethora of online sales timed before the traditional Black Friday. Amazon Prime Days, for example, has become the new can’t-miss event. This year Amazon delayed their Prime Days from July until October 13-14, taking clear aim at Black Friday. Big-box retailers have followed suit by announcing large sales of their own.

Another trend that will suppress in-store sales over the Thanksgiving holiday weekend: Major retailers such as Target, Macy’s, JCPenney, Best Buy, and others, have decided not to open on Thanksgiving Day.

The key will be to maintain visibility and relevance with customers throughout the shopping season. This requires close attention to all channels as part of the comprehensive customer experience.

Presence (and Presents) Across Channels

To successfully wrap up this holiday season, retailers will need to provide a customer experience that carefully considers every touchpoint, no matter if it’s in-store, through an app, or online. Communication and personalization are paramount, especially as many of us are craving connection after being cooped up at home for so long.

In-store Shopping

Customers have different expectations for in-store shopping. It’s no longer just about the right products, fantastic offers, and excellent customer service. Shoppers also need to feel protected and valued. Showing you care can help create a customer advantage.

“No longer is making a sale simply about informing customers of the products you sell and where to buy them. Instead, you need to show customers how you are protecting them when they come to your stores while still providing them inventory and the customer experiences they want,” wrote Nicole Leinbach Reyhle, founder of RetailMinded, in a recent blog post.

Online and Mobile Shopping

Online ordering provides 24/7 convenience—and no face masks—but it can be hard to deliver a differentiated experience, reinforce relationships, and drive preference. New technology, such as augmented reality (AR), is playing an increasingly significant role in the new state of retail.

According to Vertebrae’s survey, immersive experiences that allow consumers to stage e-commerce products in real-life environments are more compelling than product ratings in driving purchase decisions. In fact, 76 percent of respondents who used AR indicated that the technology increased their confidence before placing an order. If you can offer these value-added customer experiences, now’s the time to roll them out.

The Need for Omnichannel Experience

This holiday season, retailers can expect more consumers to place orders online before picking them up at stores; 55 percent of consumers say they will use curbside pick-up and BOPUS this year.

With consumer shopping more disjointed than ever before, retailers can find a competitive advantage in a robust omnichannel experience informed by consumer behavior across channels.

“Real-time data is the key for this holiday season. Businesses that can identify customers’ needs and preferences and meet them, in the moment, will pull ahead of the pack during the holiday rush. And, of course, these capabilities will keep driving success year-round—data-driven omnichannel marketing isn’t just for the holidays,” says Shija Johnson, Principal Technical Product Manager, Data and Analytics, Treasure Data.

A Very, Merry Customer Experience

While a Customer Data Platform (CDP) can’t tell you who’s been naughty or nice, it can go a long way to helping you understand what your customers want, at least in a shopping experience.

The Treasure Data CDP provides real-time customer insights—such as what sold and when, offers that pique customer interest, and why customers leave—allowing retailers to tailor strategies and personalize communications across channels.

To learn more about how to improve customer engagement with a CDP, check out the CDP Academy. For more from our 2020 Retail Holiday Guide, read installments two and three.