Holiday shopping questions from merchants 2025

According to eMarketer, annual holiday retail sales in the United States exceeded $1 trillion for the first time in history in 2019. The November-December holiday sales season of the previous year saw a 3.7% increase, which amounted to approximately $1.01 trillion. This was undoubtedly a prosperous period for retailers.

This year, we should anticipate another season of record-breaking performance; however, projections have been fundamentally altered, as they have been in the majority of industries in the aftermath of COVID-19. During the same period, e-commerce has experienced double-digit growth, while brick-and-mortar retailers have been compelled to implement two years of innovation in approximately two months.

The truth is that consumers will continue to make an increasing number of purchases online or combine in-store and online purchases, even after the pandemic has passed. This year, there will be no lines of patrons waiting outside for door busters after Thanksgiving dinner, and it is uncertain whether they will return in the future. As a result, brick-and-mortar retailers must adopt rapidly.

The following are the three inquiries we are posing regarding the holiday season, along with a few potential responses regarding the manner in which retailers may adjust.

What are the early indicators of the holidays telling us?
To gain an understanding of the holiday season, consider the current season, which is back-to-school. If they have not already done so, consumers with children are currently in the process of purchasing for school supplies. The second-largest purchasing season of the year has also undergone a transformation, as parents are increasingly allocating a greater portion of their budget to items that enable their students to learn from home, as well as products such as disinfecting wipes, hand sanitizers, and disposable mittens.

The uncertainty surrounding the opening of schools has resulted in a delay in the commencement of back-to-school purchasing, according to CNBC. The events that transpire during this season are indicative of the events that are likely to occur during the holiday prime season. In other words, the holiday peak season is likely to follow suit if the back-to-school purchasing expenditure is lower this year than it was last year.

In what manner will consumers conduct their shopping?
According to McKinsey, consumers who used e-commerce purchasing channels sparingly or occasionally prior to the pandemic have rapidly become accustomed to them. The convenience and germ-free option of purchasing online are enjoyed by new online consumers, including older generations, and they will continue to do so. In fact, Accelerant Research has projected that e-commerce-based back-to-school shopping will increase by nearly sevenfold this year.

The convenience of “buy online, pickup in store” has become a favorite among consumers, who can place orders from any location, travel to a parking lot, and have their purchases delivered to their vehicles without any physical interaction. Retailers that either did not offer or did not extensively rely on BOPIS prior to the COVID-19 pandemic are now enthusiastic about it. The most succinct statement was made in a recent article by MarketWatch: “Any store without a crowd will be the winner of Black Friday 2020.” It is possible that consumers are waiting in their vehicles for the delivery of their online orders. Alternatively, retailers could adopt concepts from other sectors and implement a system that enables customers to schedule appointments, thereby reducing the number of individuals present in the store simultaneously.

It is probable that even retailers that are open for Black Friday purchasing will provide significantly reduced hours. Wal-Mart and Target have announced that their stores will be closed on Thanksgiving Day, effectively ending the Black Friday frenzy that used to commence on Thanksgiving. Retailers are anticipated to respond by offering even more substantial eCommerce promotions on both Black Friday and Cyber Monday.

What methods will consumers employ to make purchases?
Another million-dollar question: what will the modern consumer purchase for the holidays? Retailers may presume that individuals are cautious and conservative due to the ongoing uncertainty surrounding the duration of the pandemic, the timing of the decline in confirmed cases, and the implications for their financial and professional prospects. Nevertheless, a recent survey conducted by Radial revealed that consumers have no intention of altering their holiday expenditures in comparison to the previous year.

Nevertheless, government subsidies may influence the amount and timing of consumer spending, as consumers begin to spend any money they had saved before extended unemployment benefits expired in July. Also, consider that holiday purchases may occur earlier than usual due to the fact that a significant number of individuals are forgoing vacations and larger-ticket expenditures and are paying off credit card debt earlier than usual.

Managing this uncertainty can be a burden for retailers, particularly as they concentrate on preparing warehouses for an influx of online orders. It is advisable to evaluate customer and product data from previous years at this time. While purchasing preferences may evolve this year, comprehending the products that your customers preferred during peak season 2019 can provide you with an idea of which items to promote on e-commerce platforms in October/November. Furthermore, by initiating communication with the most loyal customers at an earlier time than is customary, you can guarantee that you remain at the forefront of their minds as they allocate their budgets for the year.

Prepared for retail during the uncertain period
E-commerce is up, while in-store purchasing is down in many retail sectors (but not all). As government subsidies commence to diminish, consumers who have experienced job losses may either decide to purchase now or refrain from doing so altogether. Nevertheless, the 2020 peak season may approach the all-time high of last year, as travel and big-ticket expenditures are declining. Who knows?

Retailers may find an uncertain economic environment to be detrimental; however, this is not necessarily the case. Centralizing data is the optimal approach, including customer, product, supplier, and location information. Retailers can gain a more comprehensive understanding of purchasing trends by utilizing solutions like master data management, which enable them to view data from a singular source. MDM assists retailers in navigating the unknown by establishing their strategy on reliable, uncontaminated data. In conjunction with agile management, the transparent sharing of trusted data allows the analytics team to identify opportunities and derive new insights for both ordinary business and the holidays.

It is imperative to commence the preparation for the holidays at this time, as the prime season of 2020 is already ongoing. Consider investing in MDM to manage uncertainty in 2021 and beyond, and utilize the data you already possess to enhance the clarity of your crystal ball.