It’s official: the holiday season has begun. Given that holiday shopping usually picks up in mid-November, it’s safe to say that holiday shopping will look different this year. Retailers can stay competitive and capture a wider range of customers by following the lead of mega-retailers, such as Amazon, that are promoting holiday deals and shopping well before Black Friday.
In an executive brief, Mercator Advisory Group’s Director of Merchant Services, Raymond Pucci, offered insight into how this holiday season will be one like never before and what trends are emerging in retailers’ online strategies.
The holiday season will begin earlier this year
This year’s holiday season will be longer than most. According to Pucci, “we’re going to see a 60-day holiday shopping season, compared to a typical 30-day season.” An elongated shopping season beginning in October gives retailers more time to fulfill the record number of e-commerce orders anticipated for 2020.
“Amazon Prime Day will be looked at as kicking off the season,” noted Pucci. Amazon Prime Day, which took place on October 13th and 14th, usually occurs in the summer but was delayed due to the pandemic.
Despite the fact that many households are still struggling financially due to COVID-19, estimates indicate that Amazon Prime Day could generate an impressive $10 billion in revenue (up from just over $7 billion in 2019).. Part of this increase can be attributed to a decrease in spending in the dining and travel sectors. If the estimates are correct, $10 billion in revenue would be an all-time record for Prime Day.
Other retailers, including Walmart, Target, BJ’s, and Best Buy, have followed Amazon’s lead by announcing their own holiday sales to take place in mid-October.
Online shopping will continue to thrive
As the world enters the first holiday season of this unprecedented retail environment, e-commerce will continue to accelerate. “The convenience and immediacy of e-commerce has never been so stark for consumers, whether it’s for in-store pickup, curbside pickup, or delivery,” explained Pucci. E-commerce holiday retail sales could grow as much as 25% to 35% from November through January.
In preparation for the holidays, retailers have invested significantly in their infrastructure, warehouses, and delivery systems. For example, delivery companies are hiring more seasonal workers this year than in years past, while Amazon is hiring more warehouse workers. This is important, as the abrupt and significant increase in e-commerce traffic when COVID-19 started led to supply chain inefficiencies and delivery delays. Functional, seamless, and convenient e-commerce experiences will be more important than ever this holiday season.
Retailers can benefit from starting early
As brick & mortar retailers shuttered their storefronts to comply with social distancing mandates, e-commerce surged. Now, COVID’s impact on consumers’ shopping behavior is trickling into the holiday season.
Gone are the days of customers eagerly waiting outside of malls at midnight for Black Friday deals. But the overarching goal of Black Friday—being the first to offer deep discount deals to holiday shoppers—is still very much present in these October promotions. Retailers are simply adapting to the state of the world today to better accommodate the needs of both their customers and their suppliers.
By starting holiday promotions early, retailers can be successful this holiday shopping season, mitigating the strain that will be placed on their supply chains and clearing out inventory that has piled up since the pandemic began in March.
Given that e-commerce transactions now make up 16% of all U.S. retail sales, the highest it’s ever been, being an early bird when it comes to holiday promotions may be just what retailers need to catch the worm (customers).
