For retailers and sellers of just about every consumer product, the Christmas selling season is a crucial time. It is estimated that between 50% and 80% of total revenues are generated in the final six to eight weeks of each year. Surveys and studies are predicting that sales this shopping season will generate between $157 billion and $182 billion, an increase of 13.9% over last year.
Without a strong finish and a respectable share of this revenue, many businesses will not survive to see a continuation of business after the new year celebrations subside. In a year when the very fundamentals of basic commerce have been impacted by the COVID-19 pandemic, many marketers have serious questions about how the shutdowns are likely to impact this year’s holiday buying. How is the COVID-19 pandemic experience going to impact consumers’ attitudes and purchasing decisions for this critical selling season? And what should a brand do to navigate the ever-changing attitudes of consumers in response to the pandemic?
While prognosticators maneuver to advance predictions of the favored way forward, the dynamics of the pandemic and consumers’ reactions to it are proving to be difficult to nail down. Unfortunately, the only honest answer to these very important questions is that no one really knows for certain. Consumers are beginning to show they are fatigued by all the bad news, restrictive regulations, and sequester orders. They want to break-out and safely celebrate. “Consumers continue to place importance on celebrating our traditional holidays, even if by untraditional standards,” said National Retail Federation (NRF) President and CEO Matthew Shay. NRF research found that 58% of Americans were planning on taking part in the 2020 Halloween celebrations with an estimated $8 billion in spending this year. If the Halloween revenue results are any indication, consumers may be poised to defy the COVID-19 Grinch and save Christmas for merchants in 2020.
However, the holiday season is shaping up to be unlike any other previous year. “More of a specific niche play is going to have to be implemented by some of these direct-to-consumer brands, where previously they were able to use audience targeting on Facebook and Instagram,” said Zach Weinberg, a director at Gartner for Marketer. “Those costs have now become high enough that those channels are becoming cost prohibitive, so focusing more narrowly on the right consumers may be a strategy that they could try to execute against [that.]” In recent years more and more retailers have been moving away from the long, traditional Black Friday sales events. This year may see the end of the single day, massive discounts that produced manic shopping crowds across retailers’ brick and mortar locations.
Early and ongoing discounts across the entirety of the selling season appear to be trending as 47% of consumers favor such an approach. Buyer emotions are a critical consideration during the Christmas season. Campaigns should avoid the negative messaging that has accompanied the pandemic period. Buyers by and large are looking for a respite from months of hand wringing and worry. Traditional holiday cliches’ should be avoided but targeting the heart-filled emotions will continue to be an effective marketing play. Optimism, as a rule, will outsell negativity every time.
Agility is always an important trait in a dynamic marketplace and this season is proving to be even more dynamic as consumer choices shift in response to the COVID environment. “We’ve seen some data that says customers will be looking for value earlier and participating less in that all-important one-day event in stores,” says Bed Bath & Beyond CEO Mark Tritton. “It’s a very different season. And I think we’re all going to learn together as we go through it.” In-home fitness equipment, comfortable clothing, beauty products, desk accessories, and home décor are expected to be more frequently discovered under this year’s tree. Entertainment and travel will most likely be the big loser this holiday season. According to a recent Coresight poll, 68.9% of respondents said they are shifting almost $450 million of spending from services to retail products because of COVID-19 restrictions.
Perhaps the most valuable advice moving forward is for brands to listen to customers to learn how and what is important to them and create authentic, personal messages that resonate and motivate consumers. Santa is going to need lots of help from his army of marketing elves this year.
To learn more about developing a successful approach to the coming Holiday selling season, call Junction Creative Solutions (Junction) today at 678-686-1125.