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The business of Christmas

Business · 5 min read

The business of Christmas

The seemingly inexorable rise of Black Friday has made the commercial opportunity of the festive season start earlier – and last longer – than ever before.

Traditionally the busiest time of year for many e-commerce stores, the Christmas and New Years holidays for 2020 look set to be a holiday season like no other for online retailers. Between the fear of Covid-19, the uncertainty as to whether families will get to spend time together, and financial concerns due to the pandemic’s effect on jobs and the economy, there are many factors to consider this this year. As much as the word has been mentioned in the last nine months, this truly is unprecedented. However, it could be that with people unable to spend time together, gifts may take on added importance. After a tough year, people may have been saving to celebrate properly, giving 2020 a more positive end by loosening the purse strings.

In slightly more traditional circumstances, holiday spending was rife. In 2019, over US$1 trillion was spent in the United States, while shoppers in the UK spent over £2 billion.1 We were already seeing a shift in shopping habits as customers began utilising e-commerce websites and online shopping, but thanks to the events of this year, this is likely to be accelerated. In fact, Salesforce predicts that because of Covid-19 as much as 30% of global retail sales will be done online this holiday.2 Let’s take a closer look at the numbers.

delivery truck and stall

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Where are online customers buying?

According to research conducted by Astound Commerce3, online shopping rates are growing by as much as 129% week-on-week in the UK and Europe. And, in the lead up to Christmas, 58% of UK consumers say they’re shopping more online than they did before Covid-19.4 Meanwhile, over 60% of U.S. customers surveyed by Deloitte stated that they prefer to buy their gifts online, while of those who prefer the in-store experience, 60% say that they do so because it gives them a chance to interact with the product(s) they are buying.5

The results obtained by Bazaarvoice6 indicate a strong increase in preference for online retailers that offer home delivery – with a rise from 45% in 2019 to 56% in 2020 – so make sure to check out our advice on shipping during the holiday season. The percentage of respondents choosing click and collect services also grew slightly, as did the amount of purchases from social media that included home delivery. However,  it’s bad news for pop-up shops and markets, as their appeal decreased by 4% each among those surveyed.

Tim Hinckley, CCO of Radial, commented that “The 2020 holiday season will reward omnichannel retailers. Instead of the recurring and seasonal demand cycles retailers are used to, in the wake of COVID-19, brands must contend with consistent high demand for e-commerce year-round. This year, peak season levels essentially started in March… Retailers must leverage unique strategies like using stores as fulfillment centers and creative order management techniques paired with advanced technology in order to keep deliveries flowing by embracing curbside pickup and other emerging consumer expectations.”7

family playing video game

What are online customers buying?

Stocking-fillers, apparently. A study by Voxware this year has revealed that 62% of shoppers intend to buy smaller gifts, and last-minute surprises, online in 2020.8 This is backed up by Bazaarvoice, who claim that three in five buyers around the world are less likely to give physical gifts, while 54% are reluctant to gift friends and family experiences, and 55% not willing to give services as presents due to Covid-19.

With families having spent much more time at home than usual this year, many will give games, streaming service subscriptions and vouchers for future travel, according to research from The Huffington Post.  This is backed up by Dana Marineau, CMO at Rakuten, who claims that “...shoppers will look for items or experiences that bring them closer to family and friends.”9 People will also choose to treat themselves to a little luxury, with more health and beauty gifts anticipated.10 And, as the pandemic continues, CNBC also predicts that consumers will likely spend more on at-home fitness equipment, comfortable clothing and home décor to make the most of their time at home.11

woman and child smiling

How are online customers buying?

In 2017, 46% of respondents claimed to use their mobile phones for holiday shopping when Deloitte surveyed. In the same study, conducted in 2019, that number had risen to a massive 70%. And, over Covid-19, in-app shopping has gone through the roof. A study by Appsflyer has shown an increase of 35% in e-commerce app installations across Europe. This serves to show the importance of driving sales through owned properties, as well as how the ability to mimic in-person shopping experiences can reap benefits.12 Find out how to ensure that your site is mobile friendly through our article on mobile commerce 101.

Deloitte’s research also revealed that the more income a household has, the more likely it will be that they shop online. Their findings revealed that 59% of high-income households do their holiday shopping online, compared to around 46% of low-income families, while 53% of middle-income earners make their festive purchase online. A survey from Statista points to these figures rising across the board, with their findings revealing that 49% of US consumers are more interested in shopping online this holiday.13

pig wrapped in Christmas lights

How much are online customers spending?

In good news for stores, the research by Radial discovered that shoppers don’t plan on spending less this year than in 2019. However, McKinsey have released a report that states low- and middle-income Americans are approaching the festive spending spree with caution, predicting a net 25% decrease in outgoings.14

The majority of customers surveyed by Bazaarvoice are of the opinion that they’ll be spending the same amount as previous years this holiday season, but there are some regions that will see the effects of Covid-19 hit shopping, and shoppers, a little harder. 

75% of Mexican respondents agree that the pandemic has impacted their budgets, while 51% of Americans and 50% of Australians also agreed.

In more positive news for those of you selling to northern Europe, just 27% of German and 34% of French consumers believe this to be the case – so watch out for opportunities to take advantage.

How can you make the most of the strangest festive season in recent memory?

Check out our checklist for the festive season, make sure you’ve got your shipping in shape, and make the most of every opportunity to get yourselves out there you can.

Sam Steele
Sam Steele Discover content team

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