Holiday shopping is the next big event for U.S. retailers, but this season presents more challenges than in previous years, including a consumer who is more cautious and online-savvy.
For the 2020 holiday season, consumers are expected to purchase heavily from marketplaces such as Amazon and eBay, with apparel looking to be the most popular category for presents, according to a report from e-commerce rewards platform Shopkick.
This year, holiday shoppers are dealing with the repercussions of the coronavirus pandemic, which has disrupted store activity and impacted their personal finances. While many companies have been exploring e-commerce for the first time to reach consumers, the strain on logistics providers has caused delays for all but the most established e-sellers. That will important when it comes to gift-giving, as consumers want to be confident they are spending their money strategically.
“Online marketplaces like Amazon have strategically positioned themselves as leading shopping destinations, offering low prices, fast delivery and an overall convenient shopping experience,” said Dave Fisch, GM of Shopkick. “Marketplaces like Etsy and eBay also give consumers the opportunity to support small businesses and find unique and handmade products and gifts, which is also appealing for the holiday shopping season.”
Of the 17,000 Americans surveyed by Shopkick, 67% said they expected to conduct all of their holiday shopping online — a 16% increase from 2019. Within that group, 65% reported they would purchase from Amazon. The e-tail giant was also the most popular choice for those planning to purchase from online-only retailers (with 72% of votes), followed by Etsy (56%), eBay (43%) and Wayfair (39%).
Brands who sell through multiple retail partners might therefore want to explore their presence on third-party marketplaces, in order to maximize their exposure during the holiday season. By selling through a marketplace, brands can often gain access to free shipping and faster delivery networks — free shipping was deemed the biggest incentive to purchase by the majority of surveyed shoppers.
Shopkick also had positive news for apparel brands, following a year of declining sales. Apparel was the most cited gift choice by respondents, with 25% planning to purchase clothing and accessories this holiday season. (Electronics, the most popular category in 2019, fell to second place at 21%.) Fisch attributes the apparel demand to state reopenings and to the lack of clothing purchases earlier in the year.
“As we approach the end of a year mostly spent at home, consumers may feel optimistic for a different reality come 2021 and anxious to refresh their friends’ and family’s wardrobes for the upcoming seasons,” said Fisch. “This presents a great opportunity for fashion and apparel retailers who may have experienced dips in sales earlier in the year. Retailers should capitalize on offering special rewards to shoppers to help boost sales now and throughout the holiday shopping season.”
Despite these opportunities, retailers should be prepared for a more conservative spender. The survey found that 23% expect to spend less than in 2019, while only 14% plan to spend more. Therefore, creative rewards programs can be a helpful way of making items more affordable to a shopper who is price-conscious.
With Shopkick, consumers earn free gift cards through their everyday spending, which can then be put toward holiday purchases. Tying rewards to essential goods and services rewards shoppers for spending that they would already be undertaking, such as buying groceries or gas. This can foster loyalty between the consumer and the retailer whose gift card they earn, both for the holiday season and beyond.