As a retail analyst, Christmas comes early every year. I start talking about holiday shopping in August, as agencies and brands look ahead to cooler weather and warmer sales numbers. This year is, of course, no exception. While I don’t have insight into the must-have toy or what to give your partner, I do have a sense of what challenges consumers, brands, and retailers are facing. Here are some challenges unique to Holiday 2020:
- Consumers are still afraid to go to stores. Their level of concern about the virus has not dissipated, so e-commerce acceleration will only continue. For insight into consumers’ ongoing concerns about the pandemic, see Gartner’s Consumer Covid-19 Concerns Tracker.
- Consumer financial anxiety will increase price sensitivity and inhibit spending (U.S. Consumer Spending in the Pandemic Recession: What to Expect Based on 2008, subscription required). While more affluent consumers may have dollars to burn that were earmarked for trips untaken, uncertainty about the future of the virus and the economy loom large, especially surrounding the U.S. election in November.
- Higher shipping fees along with ongoing supply chain and delivery challenges mean that everyone will benefit if consumers pull their gift ordering forward and retailers promote click and collect fulfillment in addition to home delivery options.
So what’s the solution?
The consensus seems to be starting holiday promotions early. Because time has lost all meaning, Black Friday will begin in October this year. U.S. retailers are trying to make a 10/10 shopping holiday happen (the U.S.’s new answer to Alibaba’s 11/11 Singles Day), and Amazon is kicking off their Black Friday deals on October 26. Kohl’s, Macy’s, and L Brands have all referenced pulling forward promotions in recent earnings calls, with many, many more to follow. While I’ve certainly been a scrooge about holiday creep in the past, this year Christmas in October actually makes sense.
For more retail insights from my snow globe/crystal ball, see the Consumer Outlook for Retail in 2021 (subscription required).