The writing is on the wall and in the data: The 2020 holiday season is going to be very different — but, even in challenging times, it won’t be altogether bad for retail.
According to a new report today by Adobe, COVID-19 and holiday spending combined will drive record gains for e-commerce this year.
The report, which analyzed more than 1 trillion visits to U.S. based retail websites plus more data points, indicates 2020 e-commerce holiday season spend could reach as much as $189 billion, or 33% growth year over year. That is the equivalent of two year’s worth of gains crammed into one season.
Pandemic-induced online demand, said Adobe, remains elevated despite varying levels of COVID infections across the country. And such demand will lead to “record-shattering” Black Friday and Cyber Monday sales days from big box chains in particular while smaller firms could anticipate some residual gains. As retailers look to mitigate shipping, inventory and logistical challenges, they’ll start slashing prices earlier in the season, leading to revenue gains early in November. Still, notes Adobe, Black Friday — the unofficial kick-off to the holiday season in year’s past — is expected to reach $10 billion.
All told, the unprecedented influx of traffic to e-commerce sites over the next couple months, means online retailers are seeing “shopping on steroids,” according to Adobe.
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As the United States economy — as well as economies across the globe — grapple with the ripple effects of the pandemic, it’s welcome news for retailers that consumers, many of whom are facing financial difficulties, are continuing to shop albeit differently from year’s past.
Still, the massive and frantic shift to digital is challenging many firms to reboot their supply chain and logistic strategies.
While Walmart, Target and Amazon are among the boldface names that were better positioned at the outset of the global health crisis, smaller companies are feeling the pressure to find new and creative ways to pivot their businesses — particularly to reap some benefits from the holiday season.
“The biggest thing that’s going to drive success for smaller retailers over the short term is going to be: Can you understand the trends that are affecting the big players, too?” Ethan Chernofsky, VP of marketing at Placer.ai, told FN this week. “Local and proximity have become critical factors for success [in the era of COVID] but that affects big and small companies alike.”
He added, “It’s going to be creativity and good ideas [that tip the scale]. Are you willing to try things? If you’re in a situation where the odds are against you, you have to say: ‘What assets do I have that I can use?’”
Services such as buy online pickup in store, curbside pickup and contactless payment are no longer nice-to-haves but instead they’re critical offerings this year — with Adobe predicting explosive growth for BOPIS during the holidays. Mobile shopping will also get a boost as consumers do 42% of their shopping from smartphones during the all-important retail period.
What’s more, as temperatures turn cooler and fears of an impending “twindemic” (where people around the world battle a flu season coupled with the ongoing coronavirus crisis) heighten, more people could reach for their smart phones and laptops to meet their shopping needs in the months ahead.