Whether your brand is already in holiday prep mode or slightly late to the game, SMG’s most recent research—gathered through our proprietary market intelligence tool BrandGeek®—will be a useful source as you navigate your way through this unprecedented holiday shopping season.
Here are the top 3 takeaways we uncovered from talking to nearly 10,000 consumers about their holiday shopping plans:
1. Financial concerns will have some impact—but not as much as you may think
Though the pandemic has created economic issues—with more than half of panelists noting financial concerns—almost 60% plan to spend the same amount on gifts this year. And while 21% say they will spend less, this number could be offset by the 20% who are planning to spend more.
To help quantify what that means in terms of actual spend, we asked respondents the amount they plan to allocate to their shopping budget and found 47% plan to spend $499 or less, whereas 24% plan to spend more than $1,000.
It’s also important to note our research found a positive correlation between a state’s unemployment rate and financial concern. While that isn’t a big surprise, it does mean geographical differences could have a big impact on consumer spend and brands should consider this factor as they plan for the season.
2. Brands that demonstrate value will win big with customers
Though financial concerns aren’t impacting how much consumers plan to spend, they are having a big impact on where customers plan to shop and what they plan to buy. Looking for more bang for their buck, 32% of respondents said “Value for the money” was the most important factor when deciding where to shop for holiday gifts—which was more than twice as important as the next factor on the list.
With consumers’ current penchant for value, it’s also no big surprise the most popular gifts this year could be considered more practical than frivolous. Clothing and gift cards were the two most popular gifts, whereas self-care and experiences were in the lower half.
3. Most shopping will be done online—and soon
While it’s no big secret e-commerce has been trending up over the last decade, we have yet to see the majority of consumers opt to exclusively shop online—until now. Our data shows 3 in 4 panelists plan to do most of their holiday shopping online this year, and the majority will not shop in-store at all.
This is a big change when we look at 2019 Black Friday weekend when only 3% of respondents planned to shop exclusively online. Of course, this is without the pandemic factor. Today, with more than half of consumers concerned about catching COVID-19 when shopping in-store, brands must prioritize the digital experience as this could be the only way they interact with the customer.
And those digital efforts can’t wait. With more consumers shopping online, there’s much less anticipation for traditional holiday season experiences—like the mad rush of Black Friday shopping. This has blurred the lines of a distinct shopping season, with 42% of consumers saying they plan to shop earlier this year. In fact, close to two-thirds of customers plan to have most of their shopping done before Black Friday.
Prepare for a new kind of holiday shopping season
We’ve entered unchartered territory—one where heightened financial and health concerns have greatly altered consumer preferences and behavior. But what we’ve learned over the last seven months of studying consumer trends amid COVID-19 is this: Brands with an effective experience management (XM) strategy—that leverages real-time consumer feedback and enables them to act with agility—will be the ones to win (or retain) customer loyalty.
This means retailers must adjust their XM strategy to accommodate evolving consumer expectations this holiday season. To guide your efforts, we’ve created an interactive XM playbook—with a phased strategy map and personal status tracker—designed to help you navigate these uncertain times with precision, act quickly on insights, and emerge stronger. Download your complimentary copy.
Paul Tiedt | Senior VP, Research