2020 has been an unprecedented year for most business owners. The way customers shop has changed dramatically and the worldwide effects of COVID-19 are impacting shopping trends, logistics and more. Business owners need to be aware of what this may mean so we’re looking at 5 predictions for the 2020 holiday shopping season.
Ecommerce is the future
It’s not something that our founder and CEO Antony Chesworth hasn’t seen coming or shared with the world: that ecommerce is the future for businesses, retailers and more. Selling online isn’t a new phenomenon and has been steadily growing for a few decades now.
More and more business owners are understanding the importance of an online presence to grow their business and as of November 2019, the growth of internet sales as a percentage of total retail stood around 21.5%. This figure grew exponentially from March 2020 and hit an all-time high of 32.8% in May of the same year.
As lockdown restrictions eased this figure dropped but is still at a much higher percentage than ever seen before. And we can confirm this with our own statistics. We saw a 100% increase in online sales across our platform around the same time. The levels were much higher than the previous years’ Black Friday, which was the single biggest sales day of the year for our customers.
This indicates a new evolution for businesses. We predict that the holiday season this year will outshine any previous figures and experts are predicting a £7bn spend this Black Friday weekend alone. We don’t believe this is simply a temporary effect due to COVID-19. Shopping online has always had its benefits but with the global pandemic forcing businesses to get online and more established businesses to improve their processes, online shopping will become the new normal.
Online retailers need to prepare for the approaching shift in the way people browse, shop and purchase online. Omnichannel marketing (the multichannel sales approach that provides the customer with an integrated shopping experience) isn’t just something the big retailers are doing. The customer can be shopping online from a desktop or mobile device, via phone, or in a brick-and-mortar store, and the experience needs to be seamless
SMEs are now looking at ways to integrate their strategies into omnichannel marketing as this is the way that shoppers now expect their experiences to be. A completely seamless experience will help ensure a good customer experience.
Buy now pay later
Flexibility with payments is not a new concept but has become more available over the past few years. More recently, bigger players like PayPal have evolved their business model to offer these types of payment options for merchants. It has also opened a new share of the payments market for newer businesses such as Klarna.
Businesses are learning that their customers want more flexibility and payment options when it comes to shopping – and it’s not just for big-ticket items either. Companies like LayBuy, another flexible payment provider, now offer pay in 6 weekly payments. These options make purchases, large or small, a lot more palatable for customers.
The traditional pay by debit or credit card option may become less popular in the coming months or years. Particularly with the younger generation, for whom buy now pay later options are far more appealing and help encourage conversion at checkout.
A recent article by Marketing Week has suggested that there is now a disconnect between credit card brands and the younger generation. As we become more of a cashless society, buy now pay later options give consumers the instant gratification of purchasing something they desire and speaks to the distrust we have in credit cards.
The next year will most likely see an interesting growth in the buy now pay later world, especially with the uncertainty that many people and businesses are now living with.
Delivery and click & collect options
Delivery and click & collect options have been around for some time now but in the wake of a global pandemic, businesses have or should be realising how crucial this is for them – and not just for safety reasons.
More and more consumers are taking advantage of click & collect options whilst shopping online in more recent years. This is because it gives them the instant gratification of being able to order an item to pick up without any delivery costs. It provides an immediacy that traditional home delivery can’t match.
Other benefits for click & collect include helping customers to avoid problems with delivery companies. Items being lost or damaged en route can give the customer a bad experience with your business, regardless of if you’re responsible or not.
In-store pick up is especially helpful to customers who may be going to do their weekend shopping as it saves them time, finding and checking out the product. The name of the game in the next few years will be convenience.
While click & collect has its advantages over delivery, traditional home delivery is also an important part of online shopping, particularly with the holiday season coming up. For those who may not be able to leave their homes or get to the store at a convenient time, delivery is the next best thing.
Free delivery is a powerful tool with online shopping and can help you get a sale over the line, rather than charging for delivery. Business owners can always include a minimum for free delivery which will encourage customers to increase their basket value in order to qualify for free delivery. Both of these options will be a primary method for customers shopping online in the future rather than visiting stores in a traditional sense.
Personal consultations are something that traditional businesses have shied away from due to logistics among other reasons. However, businesses are now finding that providing a more personalised experience at scale can offer a 1-2 per cent lift for grocery businesses and even higher for retailers.
Typically, these highly personalised customer experiences can drive up customer loyalty and the share-of-wallet amongst already loyal customers. There is also tact in saying that when done well, these experiences can help reduce marketing cost by up to 30%. This also plays into the omnichannel marketing strategy to boost your efforts.
One of the larger UK retailers, John Lewis, announced their free personalised consultations earlier this year in order to support customers finding specific products and receiving advice. This follows their successful launch during the first lockdown of three other virtual services including home interiors, personal styling advice and advice for expectant parents.
Lockdown has fundamentally changed customer shopping habits but customer service should still remain a core part of any business model. Most businesses have embraced digital technology to transform their business and adapt to current times.
Increase in home-based experiences/activities
The lockdown earlier this year sky-rocketed sales for many activity and experience-based businesses. With the lack of activity to be enjoyed outside of the home, craft, hobby and many more similar businesses reported a huge jump in sales.
One example, in particular, was The Yorkshire Jigsaw Store who during the first month of lockdown did 18 months’ worth of orders in only 30 days. With a second lockdown now in place, we expect this industry to continue to grow over Black Friday, Christmas and January sales.
The unfortunate increase in people being put on furlough and or losing their jobs has contributed to a huge boom in home-based businesses. Moving away from traditional 9-5 jobs, people are now taking the reins with setting up their own businesses and due to many people now shopping online, they’re finding success.
We don’t think that this trend will stop when people return to work but we believe that more and more people will be starting their own businesses now and in the future to gain better control of their own incomes, rather than relying on a salaried job.