Christmas Shopping in Lockdown 2.0 – Who, What, Where, When and How Much Will We Buy?
Author: Elliott Jacobs
November 5, 2020
At the time when retail and eCommerce businesses would normally be rolling out grand campaigns for the holidays, the timing a second lockdown throughout Europe could barely have been worse. This lockdown period will cover the extended discount period of ‘Black November’ through Black Friday and the November payday weekend, at least.
- Who will we buy from?
- What will we buy?
- Where will we shop?
- When will we start shopping?
- How much will we spend?
- + 10 Lockdown Tips for Retailers
As non-essential retailers close their doors once again, uncertainty abounds. We don’t know how many will celebrate the season, whether we can travel, when we can visit stores again, which stores we might be able to visit, what the experience will be like, what we will want to buy, and how much we are prepared to spend.
This will be a stern test of whether the lessons learned, and the investments made throughout this year will stand up to the challenge.
For those that have shown agility and invested in their digital channels, lockdown provides an opportunity to serve customers during this critical time. However, for retailers that have failed to invest and are reliant on brick-and-mortar sales, there’s no doubt this holiday season will be an extremely difficult time.
Who will we buy from?
Consumers will seek the retailers and brands they trust the most. Those to have invested in their digital offerings and operations – from social media, digital marketing and online experiences, through warehouse automation, speedy delivery and convenient returns – have delivered for customers throughout the pandemic, and these brands will now be front of mind for shoppers thinking about Christmas purchases.
Also bear in mind, this time of year traditionally brings out the most interactive, experiential store experiences. With the absence of those in-store experiences, consumers will be drawn to brands that provide alternative, fun online flagship experiences this year.
If families are unable to gather in large groups or travel, we expect the notion of virtual gifting to be big this year. We might be drawn to brands offering enticing gift bundles, Wishlist features, personalized products, gift wrapping, enhanced unboxing experiences, letterbox gifts, customized gift cards, or shipping to multiple addresses from one cart.
There might also be a conscious effort to shop small. One of the more positive initiatives from this year has been the appreciation for small businesses: handcrafted arts and independent fashion boutiques, butchers, bakers and gourmet food makers. Those small businesses that have invested in online channels this year should expect to reap the rewards now.
What will we buy?
Expect the sectors that have done well this year to continue to do so. Technology and electricals, homeware and home cooking, loungewear, fitness and beauty have all seen strong sales and can expect a strong Christmas.
However, some of the bigger ticket items many would consider as gifts at this time – high-value fashion, jewellery and accessories; travel; theatre tickets; sports events; music concerts; fine dining experiences; spa treatments – feel a little less certain. Gift cards could be a popular option here, offering the promise of a special gift, with the flexibility for the recipient to secure the gift when things are a little more settled.
Brands should adapt their gift cards to reflect this, with extended validity dates, and also offer more engaging, personalised gift card packaging and unboxing experiences. However, with Gift Cards comes potential risk with many experiencing challenges with businesses who have closed with gift cards now worthless after March’s lockdown.
When thinking about packaging, letterbox gifting will be popular this year with people less likely to exchange gifts in person. From flowers and pamper sets to make-your-own pizzas and cocktail kits, this trend has really taken off in 2020.
Wellness and self-care gifts will also be popular, with more time spent at home combined with what’s been a turbulent and stressful year. Many of us started to value the small things that gave us a boost during lockdown, whether it was self-pampering, a good book, cooking a healthy meal or gardening.
‘Gifts that give back’ might be also be an option this year, during a difficult time for charities without fundraising events. For those that can afford to, gifting a charitable donation or buying from brands with a commitment to charitable causes are a thoughtful gift alternative. Also, with sustainability front of mind, consumers may choose to buy more responsibly this year, giving more consideration to plastic-free, carbon-neutral, organic, vegan or locally made gifts.
Where will we shop?
Lockdown has forced us online, for the next four weeks at least. This is clearly a huge blow to brick-and-mortar retailers. We recently saw London’s West End invest in extra safety measures to try and boost footfall at this critical time. They also extended the festive shopping period by bringing forward the famous Christmas lights switch-on.
But there’s no escaping lockdown, for now, and the consequences will be huge. We saw Hamley’s – famous for its Christmas store experience – cutting a quarter of its staff, when they’d traditional be ramping up personnel.
Even if we can return to stores in December, what this experience will look like remains to be seen. We recently heard Gary Grant of The Entertainer airing concerns around how retailers simply won’t physically be able to serve the volumes of people they would normally expect to. It’s a risky strategy to rely on stores opening again, with many areas likely to remain in varying levels of lockdown, and the enforced distancing and capacity regulations for those that can open.
When will we start shopping?
We saw the campaign from retailers and associations to encourage consumers to start their shopping early, not only due to the risk of stores closing, but also because of anticipated logistical and supply chain pressures.
With uncertainty around what Christmas will look like this year, it’s not clear whether there’s been a shift to shopping earlier. With concerns around jobs and economic uncertainty, as well as travel and lockdown restrictions, what we’ll be buying, how much we’ll be spending, and how we’ll actually be able to give our gifts are all unclear, and many consumers might leave it late to make their decisions.
We’ve seen the ‘premiering’ of the usual Christmas television adverts earlier than usual, with Lego, Argos and Amazon moving first with their festive campaigns. Amazon also shifted Prime Day back to October, as opposed to its usual summer slot, to kick-start the holiday shopping season early.
It’s likely some retailers will be panicking and trying to shift stock. Many manufacturers and retailers will be offering heavy discounts and trying to shift the merchandise they haven’t been able to sell earlier in the year.
From a consumer’s point of view, it’s really about doing your research, for what will likely be a holiday season full of discounts through Christmas and post-Christmas sales. For those that have an idea of what to buy, it makes sense to start that holiday shopping early and take advantage of the deals, particularly with Black Friday – or Black November as it’s now widely considered – soon upon us.
How much will we spend?
With economic uncertainty and unemployment concerns combined with store closures, many consumers will spend less this year. This might also be a reason for brands to offer discounts, to try and retain business and shift stock. It’s also likely those ‘Buy-Now-Pay-Later’ options – think Klarna and PayPal Credit – will prove popular.
Consumers fortunate enough to have financial stability may have been unable to spend on big-ticket items such as travel, experiences, and high-value fashion purchases this year. Christmas could be the time to release some of that pent-up retail urge and spend a little more on themselves or their loved ones.
Either way, spending power should be a key consideration for online retailers this Christmas. Whilst many would usually think about gender, product categories and other product-centric segments when it comes to segmenting customer groups and targeting media spend, it’s also worth thinking about the price ranges they might be buying within and considering this as part of merchandising flow and user segmentation.
Segment users that can spend a bit more, from those that are being cautious with cart values. Present customers with recommended products and bundle options within relevant price ranges, that they’re more likely to add to cart, to maximize value within those segments.
Lockdown Tips for Retailers
1. Segment by spending power. Some consumers will have less spending power than ever this year, some might have more. Price may be a bigger factor than ever. Focus marketing messaging and merchandising efforts on spending groups.
2. Provide payment options. Offer alternative/BNPL payment options for those with less cashflow.
3. Prepare for change. Have ‘ABC’ campaigns ready ahead of time to roll out quickly if conditions change.
4. Use recent data. This has been a unique year. Don’t rely on previous year’s tried-and-tested campaigns. Be agile and analyse recent user behaviour to adjust online offerings.
5. Empathise. Ensure social media, video, on-site content is empathetic to the situation and engages with current consumer needs.
6. Make it fun. With stores closed, how are your digital channels filling the void of fun, interactive festive retail experiences this year?
7. Think gifting. The notion of virtual gifting might be big this year, if families are unable to gather in large groups or travel abroad. How can you set up for gifting?
8. Communicate. How are your operations changing to cope with store closures? Are there alternative click-and-collect procedures? Have you changed returns terms? Ensure any changes are communicated clearly to customers to avoid disappointment.
9. Promote loyalty. With the shift to online, you might see more new customers than ever before. What can you do to keep them coming back? Think loyalty points, free delivery, subscription offers, charity gifting, exclusive future offers.
10. Give back. Consumers are thinking more responsibly this year. Can you offer charitable or sustainable gift options?
Author: Elliott Jacobs
Elliott is Director of Agency and Commerce Consulting at LiveArea EMEA. He is an experienced global commerce and multi-channel retail professional, specialising in helping B2C and B2B companies achieve measurable success by reviewing current strategies and processes, and identifying and capitalising upon emerging digital opportunities.