How COVID-19 Has Changed Holiday Shopping and What That Means for Retailers

The holiday season this year could be ‘make or break’ for a number of retailers, with many trying to make up for the huge losses they have incurred as a result of the global pandemic. Add to this the impacts that the health crisis has had on changing consumer behavior, and it’s easy to see why the pressure to make the festive season count is well and truly on.

Although no business has a crystal ball to see how the holiday shopping season will pan out in 2020, many do have the means to maximize their chances of sales in the form of robust consumer insight gathering. Getting into the mindset of the customer via research will be invaluable when it comes to directing sales and marketing strategies in the run-up to the holidays. Knowing what consumers want, when they want it and how best to deliver it, are all key questions that consumer insight can help to answer.

Below we’ll discuss some of the trends and behaviors businesses need to be thinking about in what is known as the ‘golden quarter’, and the importance of consumer insight in informing and shaping marketing strategies.

 

Online shopping habits will continue

The global pandemic has had a huge impact on our behaviors as consumers.

For instance, many of us have been forced to purchase goods and services online from the comfort and safety of our own homes. As a result, we’ve ‘shopped around’ and explored brands we may not have ever encountered or considered before. Pricing, delivery times, and shipping fees have all played a bigger role in directing consumer buying behaviors – particularly given the disruption to supply chains.

The impact of the health crisis has been significant. Recent McKinsey research suggests that as many as 75% of customers have tried new brands and new ways of shopping as a result of the global health crisis[i]. This is a seismic shift and one that will continue in the lead up to the festive season.

It’s clear that customer loyalty is certainly being tested in this new environment, and businesses need to be working harder to understand their audiences’ attitudes toward their products and services. In addition to attracting new customers, brands need to be thinking about how they can create meaningful moments that will retain the loyalty of their most valuable repeat customers, too. As we’ll discover, robust consumer insights can play a key role in supporting this.

 

Supporting local and ‘purpose-driven’ businesses

The adverse impacts of the pandemic have been felt strongest among small local businesses. Many of these businesses have a smaller online footprint and have suffered as a result of a decrease in foot traffic in physical stores.

The 2020 festive season is likely to see consumers coming out in support of their local stores when it comes to making festive purchases. According to the data, as of May this year, searches for “available near me” have grown globally by over 100% since 2019[ii].

In addition, the community spirit that the pandemic has fostered may also see an increase in consumers buying from brands who are ‘purpose-driven’ – the brands that aim to give back to particular groups and communities. Recent research suggests that nearly half (46%) of US shoppers state that they make a deliberate effort to shop at businesses that align with their values[iii].

As always, businesses that recognize the value of understanding what their customers truly care about will thrive. Brands should use this year’s holiday season to think about how and where they can market the truly local aspects of their product, brand, or suppliers to consumers. In addition, those with a charitable or purpose-driven story to tell need to look at how they can communicate this effectively to consumers.

 

Early shopping and extended cyber sales

The lead up to the holidays is traditionally the time for businesses to offer discount days in order to maximize sales. Black Friday and Cyber Monday are just two examples. However, we’ve seen discounting days turn into extended discounting periods, as smaller retailers compete with the big “e-tail” brands. In fact, the US saw some stores starting their festive discounting before Halloween[iv].

The need to avoid the crowds in physical stores, and guarantee delivery before the holidays, has seen 30% of US consumers start their holiday shopping earlier than ever, according to Coresight Research[v]. In addition to safety and delivery concerns, many consumers will no doubt be looking to spread the cost of the holidays this year, too, as a result of the economic downturn we’re currently experiencing.

 

Consumer insight is the key to weathering uncertain times

It is no secret that consumer habits have changed this year. And with that, it comes as no surprise that the biggest shopping season is being significantly impacted. In a year that has been difficult to plan for, it is businesses with consumer insight functions in place that have been able to identify opportunities and challenges early.

As we gear up for the holiday season and beyond, there’s never been a better time for businesses to engage with their consumers in a meaningful way. Medallia LivingLens has been at the forefront of providing organizations with the advanced technology they need to extract meaningful consumer insights from video for some time now.

A video-first approach to consumer intelligence gathering has certainly been accelerated this year as a result of the COVID-19 pandemic. Given the physical restrictions that were (and are still) in place globally, focus groups and in-depth interviews across the globe have been taking place across video conferencing platforms, like Zoom. Capturing these sessions on video and analyzing them with the latest in AI and machine learning technologies is helping forward-looking organizations to really get to the heart of consumer sentiment and spot emerging trends before they hit the mainstream.

Given the pressure to get the festive season right this year, consumer insight will be a valuable weapon in the armoury of many retailers, providing them with the means to identify consumer behaviors and outmaneuver opponents in a highly competitive retailing period.

What are you waiting for? Sign up for a 30-day FREE trial of Medallia LivingLens to easily capture and analyze actionable consumer insights via video.

 

Citations

[i] https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-us-consumer-sentiment-during-the-coronavirus-crisis

[ii] https://www.thriveability.co.uk/blog/prepare-your-business-for-christmas-2020-with-these-5-shopping-shifts

[iii] https://www.thriveability.co.uk/blog/prepare-your-business-for-christmas-2020-with-these-5-shopping-shifts

[iv] https://www.ft.com/content/c2f06c2a-fec6-4025-b9a0-40ec133e256b

[v] https://www.cnbc.com/2020/10/09/4-ways-shopping-for-the-holidays-is-going-to-be-different-this-year.html