How Retailers and Marketers Can Win the 2021 Holidays

 

 

Insights, Predictions, and Big Bets for the
2021 Holiday Retail Season

 

Authored By: Melissa Tatoris, Vice President of Retail
Monica Daniels, Content Marketing Writer

 

1. The Holiday Season Is Approaching—Is Your Brand Ready?

 

 

2. Recapping a Wild 2020 by the Numbers

 

 

3. Mark your calendar

 

 

4. The four calling birds of holiday marketing this year

 

 

5. Need help putting a bow on the 2021 holiday season?

 

The Holiday Season Is Approaching—Is Your Brand Ready?

 

Retail and ecommerce sales will reach between $1.1 trillion and $1.3 trillion1 this holiday season (and $800 billion between November and December alone) as consumers look forward to normal, in-person celebrations following the COVID-fueled chaos of the 2020 holidays. Already, 41% of retailers believe this holiday season will make or break their business' year—yet only 21% of retailers feel prepared2.

To make the most of this abundant spending, brands must continue adapting to the COVID-shaped behaviors of consumers, such as pre-Halloween holiday shopping.

Filled with insights, predictions, and big bets for everything from Black Friday to Christmas, Zeta's 2021 Holiday Retail Planning Guide will give you a competitive advantage heading into the most important season for retail marketers.

Recapping a Wild 2020 by the Numbers

 

The 2020 holiday retail season went better than expected, despite looming concerns related to the pandemic. Both brick-and-mortar and online retailers saw their sales increase from 2019, thanks to intense fiscal stimulus from the federal government and burgeoning household savings3:

 

 

$1.064

trillion

 

 

 

 

total retail spending (up 6.5% from 2019)

$878.26 billion

 

 

 

 

brick-and-mortar sales (up 2.2% from 2019)

 $185.88

billion

 
 
 
 
ecommerce sales (up 32.5% from

$11

billion

 
 
Sales on Cyber Monday increased by 15.6% from 2019, making it the busiest day for ecommerce in history.

$8.92

billion

 
 
 
Black Friday ecommerce sales increased by 22% from 2019 to $8.92 billion, as economic uncertainty forced consumers to double-down on BIG sales.

 

$5.02

billion

 
 
 
With brick-and-mortar stores closing to allow workers to be with their families, Thanksgiving Day ecommerce sales surged last year, increasing by 21.4% from 2019 to just over $5 billion.

The Attention-Grabbing Retailers

Mark your calendar

 

When are consumers most likely to start shopping?

 

21%  |  1 week or less before Christmas

9%    |  1 to 2 weeks before Christmas

27%  |  2 to 4 weeks before Christmas

21%  |  4 to 8 weeks before Christmas

22%  |  8+ weeks before Christmas

 
Why the early start?
For decades holiday shopping didn't start until Black Friday. But these days, people are starting their shopping earlier and earlier in the year. Why, you ask? The growing ease of ecommerce, a disdain for long lines at crowded brick and mortars, and a willingness among retailers to break the mold by running big, holiday-themed sales as early as Halloween.
 

 

It Pays to be Popular

 

What product categories will see the highest increase in

online purchasing versus the 2020 holidays?

Athleisure

+49%

Beauty

+32%

Electronics

+148%

General Apparel

+16%

Gift-Giving Items

+65%

 

 
What makes these product categories special?
Products in these categories tend to be multipurpose—they're convenient at-home or on-the-go. In a COVID-plagued world where people don't know if they'll be stuck at the house or allowed to move freely, products that can be used in a number of places or in a variety of ways are desirable.


 

Stop the scroll

How do consumers plan to shop for the holidays in

2021?

In-Store Only 30%

Online only 25%

Blend of In-Storeand Online45%

What's going on?
Conditions surrounding COVID-19 and variant strains continue to dominate headlines and call into doubt an impending "return to normalcy." As such, consumers can't completely commit to in-store shopping which is why 70% plan on doing at least some of their buying online.
 
 

Making the most

of the holiday

bonus

 

What will the average budget be this season?

 

$100 or less 33%

$100 to $500 29%



$500 to $1000 19%

$1000 or more 19%

Why are most people spending less than $500?
Even though unemployment is down across the country and household savings is at all-time highs, Americans aren't confident right now in the broader economy. The result?—People are being cautious with how they spend money, particular money on others (e.g., gift buying and giving).

23%

21%

16%

13%

11%

10%

45%

1 to 3 people

28%

4 to 7 people

16%

More than 10 people 

10%

8 to 10 people

Naughty and nice

 
Who are consumers most-likely to buy a gift for?

Child

19%

Themselves 19%

Spouse

15%

Parent

14%

Sibling

14%

Friend

13%

 

Neighbor

5%

 
What's behind the lack of gift-giving?
Inflation worries, lagging economic confidence, lackluster employment numbers, acute labor shortages, and compassion-fatigue are pushing people to spend on themselves and their closest loved ones this holiday season.
 
 
 
 

Shopping in a

one-horse sleigh

 

Will mobile or desktop be more popular for holiday

shopping?

Mobile

Mobile holiday shopping soared to new heights last year due to the pandemic—more than 70% of consumers used a mobile device to make a purchase between Thanksgiving and the end of Cyber Week4.

That trend will continue in 2021—more than 80% of consumers will use a mobile device to make a holiday purchase this year.

 
 
How can you maximize your brand's effectiveness on mobile?
 
Invest in SMS to share promotions, serve cart abandonment reminders, and drive conversions.
 
 
 
 
Deliver a seamless user experience by minimizing load times, simplifying website architecture, and making it easy to complete a purchase from a smartphone.
 
 
 
Deploy push notifications to share shipping updates, make exclusive offers, and more.
 
 
 
Lean into social media by adding "buy" buttons on your posts, answering customer questions in real time, and making it easy for holiday shoppers to engage with your brand.
 
 
 
 

Making a list, checking it twice

 

Will consumers continue to have shipping and

inventory concerns?

Yes

Consumers will be more conscious than ever with their buying decisions-in other words, holiday shopping will still be purpose-drive.

Consumers expect brands to increase their emphasis on...

 

 

 

Empathy and social Consciousness

 

 

 

 

 

Locality

 

 

 

 

 

Transparency and sustainability

 

 

 

How can you connect with the purpose-driven holiday shopper

 

Highlight sustainable products online and offline across a multitude of categories.

 

 

 

Provide little extras that people won't expect (such as a mini hand-sanitizer with every purchase) to show shopppers that you are truly committed to their safety.

 

 

 

Partner with local retailers to support your brand's products-use in-store pop-up events to highlight giftable goods and demonstrate your commitment to local businesses.

 

 

 

 

From Santa's

workshop to

under the tree

 

How can retailers overcome first-mile-to-last-mile

challenges this holiday season?

 

 

By empowering local, brick-and-mortar locations
Gone are the days when retailers centralized communication from the corporate brand to the individual consumer. The most successful retailers empower their individual brick-and-mortar teams to handle local communication during the holidays. This not only makes it easier for retailers to act in real time, but it also makes it easier to develop strong, enduring customer relationships that go beyond the holiday season.
 
What are some tips for better serving holiday shoppers from the first to the last mile?
 
 
Invest in a marketing partner that makes it easier for your brand to understand consumer trends and demands, so you can make smarter merchandise buys upfront.
 
 
 
 
Trust individual brick-and-mortars to use technology (such as SMS notifications) the right way, and develop a transparent communication process that works for their community and allows them to nurture a strong relationship.
 

 

Mailing letters to

the North Pole
early

 

Will consumers continue to have shipping and inventory

concerns?

Yes
As a result, they're going to start their holiday shopping very early (not unlike last year when 59% of consumers reported completing most of their holiday shopping before Thanksgiving).
 
In-stock positioning will remain the "bread and butter" of retail.
Unlike last year, most brick-and-mortars will be open in-full this year. Keeping up with in-person demand when many brick-and-mortars have also become micro-distribution centers for ecommerce is difficult and increases the risk of shoppers seeing empty shelves.
 
Being able to pivot rapidly will remain crucial
Downstream customer experiences in marketing are impacting where emails and digital ads redirect due to out-of-stock or low-in-stock items. As a result, marketing ROI is contracting while spending is increasing.
 
How can retailers better prepare for shipping delays and inventory shortages?
 
Negate lost opportunities related to out-of-stock inventory by making alternate product suggestions in real time. A quick ‘if not this, how about that’ suggestion will elevate the customer experience, build basket size, and move more inventory off shelves.
 
 
Only invest in what consumers are most likely to want this holiday season. Doing so will not only drive top line revenue, but it will also protect margin and help you avoid being hung up with excess inventory that will require post-holiday major markdowns and promotions at the end of the holidays.
 
 
 

Hang a QR code

on the tree

 

What's the biggest change retailers can expect as in-store

shopping resumes?

 

How can retailers create a clear path to purchase?

 

 

Retailers must dissect each path to purchase to understand their workload (how many customers take each path) and profitability. Dive into the products and categories purchased in each path to also shape merchandise strategy for the holidays.

 

 

Improve channel engagement by using QR codes throughout the customer journey—redirecting customers when they find out of stock items, sharing special in-store coupons, promoting an endless aisle to overcome having too many colorways and deep categories, etc.
 
 
 
 

Pinching pennies

this year

 

In what way will the economy impact holiday shopping?

 

Price sensitivity will play a major role in purchase decisions
 
More than 65% of consumers have not been able to save money during the pandemic to use for the upcoming holiday shopping season, and 33% plan to spend less than $100 on gifts. Therefore, retailers and the brands they carry must remain sensitive to pricing to account for the reality that consumers have less in their wallet to spend this year.
 
What's the best way to adopt a price-sensitivity model?
 
Plan dedicated shopping events and promotions for in-store shoppers, offering steep incentives for one-stop shopping. Use demographic data to target shoppers in different income brackets with unique creative that will truly speak to their budget.
 
 

The present no

one will return

 

What will remain a cornerstone of the 2021 holiday

marketing season for years to come?

 
Individualization
Retail marketers are drowning in data but are struggling to understand both known and unknown customers (e.g., online guest checkouts). It’s time for retail brands to get to know their unknowns. Understanding whether people are making one-time purchases or adding to their lifetime value is critical during the holidays.
 

How can brands better create an individualized customer experience?

 

Layer product tags into ecommerce sites to create more individualized experiences for each customer—show people the right product and the right creative to avoid cart abandonment and increase sales.

The four calling

birds of holiday

marketing this

year

 

 

Livestreaming

Live streaming is a great way to add topline dollars to the marketing mix. Live events held in storefronts, distribution centers or pop-up locations are ideal for showcasing merchandise and getting shoppers to move down the funnel. Use energetic associates, reputable influencers, or long-time customers to tell on-camera stories that add authenticity to live streaming sessions.

 

Virtual carts
 
Virtual carts help ensure retailers reach the shoppers across every waypoint in the customer journey, thereby increasing the odds of a sale. To make virtual carts more effective, allow shoppers to keep their preferred method of payment on file. If shoppers are interested in an out-of-stock item, offer auto-charging their preferred payment method once said item is back in stock. Make it easy for holiday shoppers to put "down payments" on certain, high-ticket items they might not be able to afford right now—doing this will increase overall holiday season sales volume and discourage cart abandonment.
 
Seasonal hires
 
Hiring seasonal employees to deal with the holiday surge isn't a new practice for retailers, but how those seasonal hires are used this year is changing. Rather than having extra in-store staff, retail brands should consider using their seasonal hires to provide local, same-day delivery from brick-and-mortars. Given that more than 60% of holiday shoppers will do at least some of their buying online—and given consumers' growing expectation for expedient fulfilment—seasonal hires are a great way for brands to not only offer same-day shipping, but also avoid being reliant on over-stretched, third-party shipping companies.
 
Live video chat
 
While not mainstream, live video chat is becoming an indispensable part of the clienteling experience. Live video chat humanizes and personalizes the customer service experience in a way that chat bots and call centers can't match. Adopting live video chat as a part of the clienteling experience will help retailers better know their customers at an individual level, which will lead to higher sales volume and higher-value purchases.

Need help

putting a bow on

the 2021 holiday

season?

 

Retail is changing overnight. Big ideas are being tested across all industries to earn more customer LTV, increase newly acquired revenue, drive positive brand sentiment, and generate more shareholder value. It’s important to get set up now to be well equipped going into the holiday season—and overall for 2022.
 
Zeta offers an unmatched Data Cloud that can enrich your customer base on every level. Out-of-the-box integration and easy data connectivity can help deliver action against securing incremental revenue this holiday season. Contact us today at [email protected] to learn more.
 
 
 
The findings in this report were derived from the Zeta Data Cloud’s proprietary consumer data set of over 225 million people in the US, including a Zeta Pulse consumer sentiment survey. Third-party data was used as a supplemental source as required. All expert commentary was provided by Zeta’s VP of Retail, Melissa Tatoris.
 
 
 

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