An Early Start and More Online Orders: How Holiday Shopping Will Change in 2020

Key InsightsCyber November will begin by Nov. 4.Consumers will be much more tactical about in-store shopping.Early deals will help consumers spread out the cost of traditional celebrations in the wake of financial challenges.Shipping could get expensive, driving consumers even more toward pickup options. When it comes to the holiday season, starting early has always been effective for both buyers and sellers. Retailers want to ensure they have goods in stock, along with media buys that will reach the right customers at the right moments. Consumers, meanwhile, risk product outages or late deliveries if they wait too long into the season. But 2020 is, as we all know, a different sort of year, and it will likely come as no surprise that 2020's challenges will impact holiday shopping. But that tactic of early action remains relevant given the financial constraints, product shortages and logistics challenges we’ve seen so far this year. And this, of course, has shaped the eight major changes forecasted this season: It will be the happiest holiday ever for ecommerce. For starters, expect the shift to online shopping to continue throughout the season. “I think [it’s] undoubtably and unequivocally going to be the biggest online holiday season that we've ever seen,” said Peter Sheldon, senior director of strategy at Adobe. According to Adobe, 130 days in 2020 exceeded $2 billion in daily online sales by August, with every day in May and June doing so. In 2019, only two days outside the holiday season hit that mark. “We've seen this massive channel shift of consumers being either forced to buy online or having a strong preference to buy online, avoiding the risk of going to the stores or the fact that during the peak of the pandemic, many of the stores were closed,” Sheldon said. It will start early, likely with Prime Day, and kick into high gear right after Election Day Holiday offers will appear much earlier this year as retailers attempt to compensate for lackluster sales, consumers grapple with financial struggles and a delayed Prime Day potentially cannibalizes some holiday traffic. Retailers like Walmart, Home Depot and Macy’s have already announced plans to move their own holiday sales up. These early holiday promotions will also extend longer than usual, with Cyber Monday becoming Cyber November. “I think what we'll really start seeing is as soon as the election is over, a lot of retailers will start offering their Black Friday [and] Cyber Monday deals way, way earlier and making them available over a two-plus week period,” Sheldon said. Black Friday and Cyber Monday will be less meaningful—but not meaningless We likely won’t see big crowds on Black Friday as early online deals will make the idea of waiting in line for hours and fighting over flatscreen TVs feel “dated and irrelevant,” Sheldon said. However, both Claire Tassin, a retail analyst at Gartner, and Sheldon agreed there will still be a bump on those traditional days, but it will be smaller as the dates are less meaningful. Shoppers will go to stores for different reasons Consumers may not descend upon malls en masse this year, but they will still go to stores—they’ll just be more tactical about it. Sheldon expects traditional window shopping to be supplanted by online research and for customers to lean hard into pickup services to “make that actual visit to the mall much more orchestrated and a little bit clinical.” This strategy also allows shoppers to pick up whatever they couldn’t find online in brick and mortar. Early deals will help consumers mitigate financial challenges Actual consumer spend this season is a little harder to peg. However, Elizabeth Marsten, senior director of strategic marketplace services at Tinuiti, expects it to be consistent with 2019. “I think we'll still find ways to spend just as much money,” she said. “I think we're going to be pleasantly surprised on how robust it still is as far as sales and revenue.” Tassin, however, said while consumers will likely be in the mood to spend, they may not be in a position to do so with a struggling economy and astronomical job loss. That means the final dollar value may not be where pundits would like it to be. “I anticipate seeing people spend, but I think a lot of these deals and promotions are going to be really powerful to drive so much of that spending,” she said. “I think there's a lot of price sensitivity that comes along. So we'll see some kind of cheap and cheerful versions of celebration.” That’s why early deals will be so important as they also help shoppers spread out the cost of their celebrations, according to Marsten. She also expects to see a spike in the use of buy-now-pay-later services this season for the same reason. We may see more product shortages—but nothing like toilet paper One big challenge could be inventory shortages resulting from the relative unpredictability of consumer demand so far this year. “We may have quite a severe problem on our hands in terms of a U.S. population that's really quite willing to spend during the holidays, only to find that everything is out of stock because retailers did not buy enough,” Sheldon said. Logistics will be a bigger challenge than in years past According to a study on holiday shipping challenges from retail and ecommerce event CommerceNext, 63% of merchants said their biggest concern is consumers will demand fast, free shipping at a time when UPS, USPS and FedEx plan to charge hefty holiday surcharges. An additional 60% of retailers are fearful carriers will cap deliveries at peak periods. However, cut-off dates for shipping so far appear to be about the same as last year. The survey found 77% of “extremely risk averse and the extremely confident” retailers plan to cut off free shipping between Dec. 14 and 21. Only 14% plan to end nonexpedited shipping before Dec. 13. Delivery commitments, however, will be more conservative: 63% of retailers will promise delivery in four or more days and just 22% will offer shipping in two days or less, the survey found. Consumers will be more understanding Early shopping should help alleviate some of these challenges, and Sheldon expects consumers will be amenable to behavior changes like shopping earlier or waiting a bit longer if it means they’ll get the gifts they want by holiday deadlines. The CommerceNext survey was in alignment, finding 31% of consumers would be willing to wait a big longer for packages as a result of increased delivery costs. Slightly more (37%) said they would be willing to pick up orders, which the study noted is a new habit many consumers acquired during the pandemic. “I think typically what happens with holidays, we're just going to see an acceleration of trends that we've seen throughout the year,” Tassin said. “So we're going to see a lot more of the curbside or in-store pickup and more of the connection of online retail to in-store.”

Adapting to Crisis

An Early Start and More Online Orders: How Holiday Shopping Will Change in 2020

Consumer behavior shifts will accelerate

Lisa Lacy

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