Five Illuminating Holiday Shopping Predictions for Retailers
Five Illuminating Holiday Shopping Predictions for Retailers
Black Friday traditionally begins the day following Thanksgiving and is considered the kickoff to the holiday shopping season. Neither is the case this year. It’s not breaking news that COVID-19 has dramatically altered life for most people, but how the pandemic will impact the holiday shopping season is still unfolding. By now everyone knows that stay-at-home mandates, in-store capacity restrictions, and fear of contagion have caused a spike in e-commerce. This alone creates a new factor for holiday shopping because retailers are no longer reacting to this reality; they have had time to adapt and modify their holiday marketing strategies. To help shed light on what to expect this season, Adobe Analytics analyzed over a trillion visits to 80 of the top 100 U.S. retail websites, along with sales of more than 100 million unique products. Based on findings from the 38-page report, Channel Key has outlined the five most illuminating data-driven predictions for the 2020 holiday shopping season.
1. Online Holiday Shopping Will Shatter Records in 2020
In 2019, online sales in the U.S. totaled $142.5 billion, a 13% increase from 2018. This year, the number will skyrocket. According to Adobe Analytics, the online holiday season is forecast to break all its past growth records to top $189 billion, a whopping 33% YoY spike. Other reports are corroborating this estimate, including an October projection by software company Salesforce that forecasts a 34% surge in e-commerce for the 2020 season. These figures suggest that nearly a third of all holiday sales this year will take place online. All this is great news for retail companies that have shifted their marketing strategies to e-commerce platforms.
2. Black Friday Will Be Black November
One of the key differences this year is that holiday shopping began more than a month ahead of schedule. This is primarily due to the timing of Amazon Prime Day, which was pushed back to October because of the pandemic. The highly anticipated event generated more than $10 billion in 48 hours and brought customers into an early holiday shopping spirit. Just days after Prime Day, Amazon continued this momentum with its Holiday Dash promotion, offering Black Friday-esque sales through November 19. Other major retailers have followed suit by not only launching holiday sales much earlier this year, but by shifting many of them online. For example, Walmart is dividing its traditional Black Friday sale into three events across November, two of which begin on Walmart.com. Lowe’s is currently running Cyber Steals, an online-only promotion that offers one-day deals on selected items through December 2. Meanwhile, Target is taking a new approach by offering Black Friday Now deals throughout the entire month of November.
3. Curbside Pickup and BOPIS Will Soar
Many customers who prefer the traditional brick-and-mortar Black Friday experience will buy online but pick up their purchases curbside or in-store. According to Adobe Analytics, the buy online and pick-up in-store (BOPIS) option is expected to grow 40% YoY as customers seek to avoid large crowds and shipping costs. Adobe projects that 19% of shoppers will choose BOPIS this season, compared to only 4% in 2019. Additional evidence to support this is the sudden rise in curbside pickup and delivery services offered by grocery retailers. Amazon recently announced free, one-hour grocery pickup at Whole Foods for Prime members, Walmart announced a partnership with delivery service Instacart, and Target announced an expansion of pickup services nationwide. With more customers becoming comfortable and familiar with curbside grocery pickup, it’s safe to assume this shopping behavior will transfer to holiday purchases.
4. Black Friday and Cyber Monday Total Sales Will Spike 50%
While this season’s Black Friday event will be spread throughout November, actual Black Friday and Cyber Monday sales are forecast to crush previous records. Despite an early start to the holiday shopping season, the tradition of visiting brick-and-mortar retailers in search of amazing deals is engrained into the shopping behavior of millions of U.S. consumers. This habit may prove a difficult one to break, and customers will likely be hungry for savings on Black Friday – even if they opt to find them online. In fact, the shopping momentum that occurs on Thanksgiving Day through Cyber Monday has become its own event known as Cyber Five, which is expected to skyrocket this year. Adobe predicts Black Friday 2020 to break last year’s record of $7.4 billion by 39% to reach $10.3 billion. As for Cyber Monday, which totaled $7.9 billion in 2019, online retailers can expect to rake in $12.7 billion in a single 24-hour period.
5. The Election Will Briefly Distract Holiday Shoppers
Another factor to consider this holiday shopping season is politics. With the U.S. presidential election on November 3, combined with a contentious and charged campaign season, the verdict is still out as to how shoppers will respond. Traditionally, elections have caused a distraction among shoppers. According to Adobe, the day following the 2016 presidential election saw a 14% decline in sales compared to a non-election year, while the day after the 2018 congressional midterms saw a 6% drop. Despite a probable short-term decline in consumer spending immediately following the election this year, online holiday spending is likely to resume its elevated 2020 path as retailers leverage the anticipation of Black Friday and Cyber Monday.
CHANNEL KEY TAKEAWAY
By all accounts, the 2020 holiday shopping season will set numerous records. The Adobe Analytics report is just the latest research to shine a bright light on an otherwise gloomy year. There is another important factor, however, that can’t be measured by data. It’s too abstract, yet just as real as any statistic or metric. It’s the common thread that runs through the veins of every American – a genuine feeling of hope that has helped carry us as a country through profound setbacks and challenges time and time again. Americans are resilient people, divided on many fronts, but all currently struggling in one way or another through the same pandemic that has transformed life as we know it. If there’s one thing to celebrate this holiday season, it’s that we’ve made it through a very difficult year. This alone is a victory. As the holidays approach, Channel Key predicts this underlying optimism will be the driving force of a shopping season that benefits both customers and retailers; not because we want to shower our family and friends with gifts, but rather, because we want to close out 2020 on a celebratory high note. That is, after all, the best way to ring in a new year.
About Channel Key
Channel Key is a full-service channel management marketplace consulting agency that has helped generate $250M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn about how Channel Key can help increase sales for your business, contact us today for a free consultation.
Ryan Faist is the Corporate Marketing Content Manager for Channel Key. As an accomplished marketing professional, journalist, copywriter, graphic designer and problem-solver with experience on both sides of the media, Ryan is passionate about discovering creative, effective ways to help businesses exceed their marketing and communication goals.