A COVID Christmas: What Does Holiday Shopping Look Like in a Pandemic?

To say that 2020 has been an impactful year on consumer behavior would be an understatement… about a year that has been anything but understated. During 2020, we have seen a massive shift to online shopping, specific categories exploding, others virtually disappearing and consumer behavior change, most likely, permanently. What does this mean for the most important time of the year for manufacturers and retailers? What do these changes to consumer habits look like for holiday 2020? In this post, we will be exploring these questions and how we can make the most of these changes.

What are we spending this year?

A big question that needs to be addressed before we jump into what customers are buying or when/where they will be shopping, is how much the consumer will be spending. According to the New York Times, there are 12 million unemployed workers in the United States and what this level of unemployment has done is made more people aware of the current economic situation and reevaluate their own spending habits. This led to a jump in saving and the elimination of careless overspending and has decreased the average consumer debt by 14% in the U.S. So what does the budget-conscious shopper plan on spending this holiday? According to NPD, a leading market research company in the U.S., the average person will spend $691 this holiday season. This is a decrease from 2019, however, it is on par with 2018. What is interesting is that the bulk of participants in the survey (55%) did indicate they will not change spending levels from 2019, most likely due to increased savings and guilt associated with being apart from loved ones over the holidays.

Source:  The NPD Group – NOW IN RETAIL: 2020 U.S. Holiday Purchase Intentions Key Findings

What are we shopping for this year?

Despite there being a smaller budget for holiday gifts this year, 40% of shoppers plan to buy more gifts as a way to spread a little more cheer to offset the current atmosphere. As we dig a little bit deeper into the mind of the consumer this year, we can explore what people will be buying. In an expected plot twist for 2020, we are seeing growth in the categories we have been seeing all year with shoppers focusing on practical gifts that can be used at home.

Source:  The NPD Group – NOW IN RETAIL: 2020 U.S. Holiday Purchase Intentions Key Findings

Some notable mentions of what people with be buying include, giving masks as a stocking stuffer, gifts for the virtual stay at home life (monitors, PC headsets, USB cameras, sleepwear, and hair care), subscription services (food and streaming services leading the way) and gift cards (up 8% from 2019). NPD has also noted that there will be an increase in self-giving (so it’s ok, if you want to give yourself a PS5).

Where are we shopping this year?

E-commerce has become the king of retail. During the first half of 2020, we saw incredible gains in the world of online shopping, with most retailers seeing significant jumps (somewhere around a 50% increase) and others seeing increases that defy belief like GameStop’s 800% growth. We continue to see shoppers to embrace the digital landscape with 80% of consumers planning on doing some shopping online according to NPD.

That said, for those that will be going into stores, safety is at the top of their mind. According to a study from PwC majority of consumers (55%) said COVID is their top concern around shopping, with 65% saying they are most concerned about catching the virus. This puts brick-and-mortar retailers in the position of not only needing to market the products that they have available but also the safety measures that put in place to protect their customers.


When are we shopping this year?

Take a moment and look outside on a residential street, what will you notice this year? There are more holiday decorations up early this year. This might be because we’re “bored in a house” but the simple truth remains, the holidays are starting early according to, well everyone. This goes for shopping as well and is likely due to the communication that shipping online orders might be delayed and that shoppers should start early. 41% of consumers believe that they will start shopping earlier than normal because of the pandemic according to NPD.

What does this mean for the toy world?

As we look over the holiday season, we should be looking at our marketing in a couple of different ways. The first being to push your online sales channels, whether this is your own e-commerce site, Amazon, or other online retailers, it will be important to direct ad dollars towards where your customer is, and right now that is online. The second thing you will want to ensure is that you are realistic with your customer on shipping timelines. All services are experiencing delays and have modified their processes to meet the demands of the pandemic. You need to be open and honest with your customers about how this will impact the timing and what they can expect. No one wants to find out that the hottest toy has been stolen off their porch because your shipping provider isn’t collecting signatures at the moment. Lastly, let your customers know where your product is in-store, as best you can. Shoppers will be looking to limit their time in stores and it will be more important than most years to let customers know where you’ve sold through. If they are only planning a trip to one store, it will be important for your business that they’re not picking the retailer where you’re sold out.

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