Traditionally, the winter holiday season is the time of the year when people tend to spend frantically on gifts for their loved ones. It has, therefore, become retailers’ favorite season. However, with the COVID-19 pandemic still in progress, people’s shopping behaviors have drastically changed this year – the majority of people work and study from home and, in periods of strict measures or even lockdown, they do almost everything online, from the safety of their couch.
Our needs have also changed during the pandemic, leading to a shift in the sales of certain products. For example make-up products and office clothes have seen a decrease, while other products related to home care and indoor activities have been much more sought after: fitness equipment for working out at home, electronic devices, food delivered at home, entertainment services and many others.
This bears the question: what will shoppers buy for the holiday season and how will they behave in terms of spending?
Even though most consumers will not be travelling or meeting friends and family during the winter holidays, they would still like to celebrate at home, organizing festive dinners, exchanging gifts, spending time with the ones they can. Presents sent to loved ones from afar may well be the trend of the season, especially since people in many parts of the world are either under lockdown or other restrictions, or are simply too cautious to travel.
Lack of confidence means less spending
As always, different regions exhibit different spending behaviors. According to McKinsey, European consumers are pessimistic about the economic recovery, regardless of the measures their governments are talking to stimulate the economy and limit the negative effects of the pandemic; the UK, for example, has already started its COVID-19 vaccination program. In fact, 31% percent of Europeans believe that COVID-19 will have a lasting impact on the economy, compared with only 4% who share that opinion in China, or 17% in the United States.
Consequently, shopping in Europe is severely affected by the aforementioned view of the future. As the McKinsey report shows, more than one third of European consumers are looking for ways to save money, and 27% are specifically seeking more affordable alternatives to the products and brands they usually buy.
Another aspect retailers should take into account this holiday season is the increased weight of a brand’s purpose in influencing shoppers’ buying decision. 34% of Europeans said that brand purpose is now more important to them than before the pandemic; participants from Spain, Portugal and Italy are the most concerned about a brand’s stance towards issues like sustainability, environmental protection, cruelty-free products or employee treatment.
Similar conclusions can be found also in the Deloitte 2020 holiday retail survey, conducted in the USA. Due to COVID-19-related anxiety, the widespread economic disruption and job losses, US shoppers tend to spend less and save more. The pandemic has also redirected budgets - money that people would usually set aside for travelling now tend to be redirected toward household items and holiday decorations. This festive season, shoppers also plan to spend more on food, beverages and gifts.
E-commerce versus brick-and-mortar
E-commerce has grown exponentially all around the world, as consumers have increasingly replaced going to physical stores with online shopping, in an effort to stay safe.
While some e-commerce merchants and online service providers have experienced increased demand by existing customers, others have also gained a large number of new, first-time users. For example, many shoppers have used services like buying online for in-store pickup or grocery deliveries much more than they used to before the pandemic. At the same time, these services, together with restaurant food deliveries, have seen the greatest influx of new, first-time users, in the last year.
It is, therefore, expected that most of the shopping this holiday season will take place online.
Nevertheless, while many buyers will choose to avoid the crowded physical stores to minimize the risk of infection, at least a third of them still plans to shop in brick-and-mortar stores, according to another recent study.
Opportunities brought by technology for offline stores
The McKinsey study has also revealed that over 60% of European consumers have changed their shopping behavior this year, by either trying new brands or shops, or by using new purchase methods – such as online, through dedicated apps, home delivery, and so forth. The reasons driving this change are the usual suspects: price, convenience, and safety.
Among shoppers in physical stores, the issue of safety is paramount. Masks, barriers, sanitizing efforts and physical distancing are crucial influencers of a shopper’s decision to shop in a particular store or not.
To minimize the risk of infection, the overwhelming majority (82%) of those who have started using a self-checkout technology in shops during the crisis intend to keep using it. Retailers that have invested in such technologies will benefit a great deal, as these investments will help them gain shoppers’ trust and increase their sales.
Significant transformation always happens when extraordinary circumstances arise. The COVID-19 pandemic has pushed many businesses towards the digital transformation that had been hyped but not really implemented in the last several years. For merchants, as difficult and unpredictable as it might be, this period is a good opportunity to build better customer experiences online and in store and increase revenues by investing in new technologies that will keep customers safe, while enhancing the shopping experience.
Our retail and payment solutions can help merchants adjust to, and even thrive in, the “new normal”:
- PayMod; a modular and flexible system for unattended payments, offering a convenient and secure way to expand the business operating hours and provide superior customer experience, without the need for physical presence of staff.
- Self Checkout; a checkout process that puts consumers in control of the shopping transaction from start to finish, reducing waiting times, supporting physical distancing and making store employees available for other operations.
- Click & Collect; a delivery model for customers including grocery and parcel delivery lockers, allowing retailers to provide greater flexibility, while reducing the logistics costs and being able to offer 24x7 services.
- Self-Service Kiosks; with intuitive interfaces and easy to follow instructions, kiosks help customers easily find and purchase what they need, while minimizing human contact and reducing exposure to contaminating factors.
- Smart Queueing; a queue management system can help manage visitor and customer flow, reducing and re-organizing waiting queues and improving customer experience.
All of these solutions can make the world a safer and more convenient place to shop.