How the Pandemic Affected Holiday Shopping

Now that we’re almost a month out from Christmas, retailers have finally released their sales numbers from the holiday season. Like many leaders in the industry predicted, the season was a mixed bag – some brands and retailers performed really well, while others suffered and fell short of their usual holiday sales expectations. Since industry leaders are also anticipating that some shopper behaviors that developed during the pandemic could be permanent, these insights could be just the beginning for new trends in holiday shopping over the next several years.

 

Consumers are Open to Shopping Online for More Types of Products

For some product categories, traditional wisdom was that ecommerce was just not going to be compatible with the way that many of their consumers shop. One of the best examples of this is furniture. Despite the success of platforms like Wayfair® and Casper®, a lot of shoppers have been hesitant to make important big-ticket purchases without being able to see, touch, and test the item in person first. However, according to Furniture Today and Salesforce, ecommerce sales of home goods grew by 89% during the 2020 holiday season.

Despite shipping delays throughout the holiday season and prompts from retailers to make purchases early, digital sales grew 58% during the five days before Christmas. Part of the reason for this late sales jump could be that some consumers knew that they would not see friends and family on Christmas Day itself due to the pandemic, so they felt comfortable putting off their shopping or stretching it out over a longer timeline. Additionally, some consumers might have felt empowered to make a big-ticket purchase late in December because it became increasingly likely that they would get a second stimulus check soon.

 

Stores that Can Offer a Wide Variety of Products Won the Holidays

As consumers felt the need to limit shopping trips, stores that could fulfill multiple needs were able to capture a greater share of Christmas purchases. Target’s same-store sales, for example, grew by 17% over the holidays. Many shoppers wanted to avoid potentially risky places like malls and department stores (Nordstrom’s holiday sales dropped by 22%), but big-box stores like Target allowed consumers to knock out their grocery shopping and their Christmas shopping in one trip – and they stocked up on cozy clothes for a winter at home, too. While overall store visits were down, shoppers spent more time in stores during these trips and basket sizes increased at both Target and Walmart this winter.

One major advantage that this kind of retailer has is the ability to offer a suite of same-day services, including in-store pickups, same-day delivery, and curbside pickup. These features were very important to shoppers that prioritized convenience, safety, and efficiency this year. At Target, sales using this kind of fulfillment option tripled during the holiday season. This particular trend is one that is expected to continue after the end of the pandemic, meaning that retailers that have a strong selection of fulfillment offerings and that can minimize consumers’ shopping trips might be even more competitive for future Christmases.

Going forward, it looks like several lasting trends are going to have a big impact on future holiday shopping seasons. eCommerce, convenient fulfillment options, and a wide variety of SKUs will be important features for shoppers, while in-store experiences may not be as significant for retailers that want to stay competitive. This might have been an unusual holiday shopping season, but there are still many lessons to take away from it.

 

  • The Biggest Lessons for Brands in 2021
  • How COVID-19 Is Changing Retail Displays