Retailers Up The Ante For Holiday Shopping
The unofficial start of the holiday shopping season—Black Friday— is right around the corner. This busy season is a win-win for consumers and businesses alike: shoppers enjoy deep discounts, and small businesses see a sizable revenue boost. This year in particular, consumers are able to buy gifts and get deals from an ever-growing list of options.
— With so many ways for consumers to shop in the digital era, competition is hot to reach these buyers in new and creative ways.
— Small businesses look to digital tools to reap the benefits of the shopping spikes during the holiday season.
With so many ways for consumers to shop in the digital era, competition is hot to reach these buyers in new and creative ways.
eMarketer forecasts show that U.S. holiday online sales will surge 35.8% as shoppers embrace online options. “Retailers are bracing for a softer holiday season due to the pandemic. They will see, however, a major shift to ecommerce this holiday season. US consumers will spend $190.47 billion this year on holiday ecommerce purchases, up 35.8% and representing an incremental $50 billion in sales versus 2019. In-store holiday sales will decline by 4.7% to $822.79 million. But online gains will entirely make up for these losses, resulting in growth of 0.9% for total holiday season sales, to $1.013 trillion.”
Adobe forecasts that the majority of consumers will support small and local businesses during Small Business Saturday, and small businesses expect to see revenue double over the holiday season. “Small businesses ($10M – $50M in yearly revenue): +107% revenue boost over holiday season. 51% of consumers plan to support small and local retailers on Small Business Saturday. 38% of consumers will make a deliberate effort to shop at smaller retailers throughout the holiday season.”
The direct-to-consumer explosion provides countless avenues for customers to shop directly from up-and-coming brands. Tech analyst Benedict Evans finds several hundred new online-only or online-first brands are powered through ecommerce.
Traditional retailers are responding to changing consumer habits, providing new sales channels and digital capabilities.
— As shoppers moved online during the fall months, Target saw a 20.7% increase in comparable digital and in-store sales in Q3, the Wall Street Journal reports. “In recent years, Target has invested heavily to use stores as fulfillment centers for online orders, efforts that are paying off during the pandemic, said [Target CEO] Mr. Cornell. Demand for same-day online pickup and delivery services grew more than threefold in the quarter, the company said.”
— Online retail represented 32% of total Kohls sales in Q3, according to Retail Leader. “As Kohl’s continues to promote its omnichannel offerings, the retailer’s association with Amazon remains part of that push, according to [Kohl’s CEO] Glass. ‘We are focused on driving further adoption on our pickup offerings and especially Store Drive Up. And we continue to be pleased with Amazon Returns, both from a customer experience and economic standpoint.'”
Small businesses look to digital tools to reap the benefits of the shopping spikes during the holiday season.
Due to their size, small businesses have been able to be nimble and update their sales strategies to incorporate more digital channels. “Early in the pandemic, many small businesses made a bigger push to digital sales, some adding curbside pickup while stores were closed under state or local orders, said Matthew Wagner, vice president of revitalization programs at the nonprofit National Main Street Center, a subsidiary of the National Trust for Historic Preservation. ‘Now the push is to try to elongate this season, alleviating some of the crowd factor,’ Wagner said. A survey by the center found more than 40% of businesses added curbside because of the pandemic and more than 20% added touch-free payment systems.”
A strong digital plan helps small businesses stay close to customers and take advantage of the rise in holiday sales. “As Americans have moved much of their lives online in 2020, marketers who want to reach them must go online to meet them there. For retailers, that means having the capability to sell online, where sales could grow 30% this year, according to Salesforce.”
A survey from small business lender Kabbage found that most retail small businesses have their highest profits during the fourth quarter holiday shopping season. “The impact of fourth-quarter profitability varies by industry, with online retailers (74 percent) and brick-and-mortar retailers (71 percent) reporting Q4 as their most profitable time of the year.”
Julie Gabay, owner of Pacific Cycling & Triathlon in Connecticut, says that digital ads help her reach consumers even though she doesn’t have an online store. “I don’t look at it as a deficit that I don’t have an online store. At the same time, social media is very important to us. For us, it’s a way to reach customers we couldn’t with just our website.”