THE CLARUS Blog

Why Holiday 2020 Poses Unprecedented Challenges for Retailers

Since the pandemic hit the U.S. in March, there has been a massive shift toward e-commerce, which has turned the shopping pyramid on its head.

According to data from IBM’s U.S. Retail Index, the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years.

Just let that sink in…online shopping is NOW where it was previously projected, just eight months ago, to be at in 2025!

Since consumers have flocked to online shopping, make sure your e-commerce process is seamless, quick, and easy.

The dramatic rise in e-commerce and BOPIS (buy online, pick up in-store) has prompted some retail experts to speculate these online purchasing trends formed during the pandemic might be here to stay.

As COVID-19 cases surge throughout the country, they also impact how consumers shop and retailers adapt.

Ongoing unemployment, the sagging economy, less discretionary income, and a presidential election year are a few factors putting a strain on those that deliver your online orders.

Holiday season 2020 promises to be more challenging for retailers than any previous one.

We’ll look at how consumer holiday shopping will be impacted, the importance of brand communications with customers, and how retailers can make a good first impression during this all-important time of year.

 

Online Shopping Will Be a Major Theme This Holiday Season

While holiday 2020 will be quite different in many ways, including less people traveling, fewer family celebrations, and a likely drop in spending, how consumers shop is a major theme.

Nearly half (49%) of consumers plan to do most of their holiday shopping online, which is a huge increase compared to the typical percentage in the teens.

As a result, retailers not only need to prepare for an online surge and fulfilling those orders but reconfigure their stores for anticipation of larger crowds than they’ve seen since the onset of COVID in March, while meeting the pandemic safety standards.

The holiday shopping season kicked off earlier this year when Amazon held its annual Prime Day in October. Amazon’s record-setting two-day global event already showed that consumers are eager to spend online on great deals.

Supply chain and scarcity issues on products will also entice more consumers to shop early during the holiday season.

And throw in the fact that many top retailers like Target, Walmart, Kohl’s, and Best Buy have decided to close on Thanksgiving, this holiday shopping season will be quite different from the past.

Given the nation’s uncertain economy, unemployment, and a government stimulus plan that remains up in the air, many consumers will spend less this holiday season.

And when they do spend, will it be more on necessities or luxury items?  This is forcing retailers to think and analyze even more than usual about what products to stock this year based on data and anticipating consumer demand.

 

Brand Communication With Consumers Has Never Been More Important

If 70% of consumers believe their loyalty is harder for retailers to maintain, brands have to work twice as hard during a pandemic when convenience is the main priority for consumers.

Brand communications with consumers and making true connections have never been more important.

For any brand to be authentic, its customer connections must be relevant and valuable.

Customers want to feel recognized and valued. They want to feel connected and personalized experiences let customers know that brands know and understand them.

Trust is a huge component in making customer connections.

Consumers want experiences that are simple and predictable.

The problem, though, now is the pandemic has made so many things difficult, unpredictable, and challenging.

Given this tenuous backdrop, retailers must truly focus on what they communicate to their customers, navigating what is potentially happening with them economically, health-wise, and relating to societal issues.

Adding to that, shoppers take notice of how these retailers are treating both their customers and their employees to keep them safe.

Consumers want retailers to implement the strictest health and safety protocols and communicate those measures to them.

During this challenging time for everyone, retailers must go the extra mile to ensure consumers’ safety.

 

Making a Good First Impression is Crucial for Brands

Be prepared to make a good first impression with potential new customers. With new shopping behaviors in place for Holiday 2020, consumers will be interacting at all-time highs, for the first time, with retailers they’ve never shopped at.

What will retailers do to keep these new shoppers?

It is critical that retailers make the shopping experience easy and rewarding.

In addition to fulfilling orders in a timely fashion (ideally with free fast shipping or easy buy online, pick up curbside), the relationship between new customers and retailers can grow through strong benefits and rewards within their loyalty program and personalized offers and messaging.

A recent Forrester shopper survey revealed that 70% of consumers say it’s important to them that a retailer’s loyalty program offers instant discounts/cash back on their purchases. Also, 64% say that they would like to use their cash back or rewards earned toward future purchases from that brand, driving more purchase frequency.

A retailer’s first impression toward a new customer is crucial as consumers form rapid opinions.

This is yet another challenge for retailers this holiday season: make a positive first impression that leads to a memorable experience.

 

Retailers, It’s Up to You to Meet the Challenge of Holiday Season 2020

Holiday season 2020 will be the most challenging for retailers in quite some time.

Success depends on many factors:

  • Adapting and preparing for how consumers shop
  • Meeting their expectations on product and fulfillment
  • Careful and personalized communications
  • Using a loyalty strategy that has them coming back will put retailers in a strong position to come out on top this holiday season and have a successful start to 2021

Treat every consumer like a first-time customer because that loyalty mindset will prove effective.

Don’t you want to make a first impression this holiday season that will last well into the future?

 

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