Will COVID-19 Help the Grinch Steal Christmas This Year? COVID-19 has completely reshaped the world and those effects will continue to be felt this holiday season. With financial turmoil and fears of social interaction — it’s a holiday stage even the Grinch himself couldn’t have imagined. Both consumers and retailers will rely heavily on technology to pivot effectively and retain some sense of normalcy and holiday magic this year.
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HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
1. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
1
HOW COVID-19 HAS RESHAPED
HOLIDAY SHOPPING
4 WAYS TO STRATEGICALLY RESPOND
2. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
2
COVID-19 has completely reshaped the world and those effects will continue to be
felt this holiday season. With financial turmoil and fears of social interaction — it’s
a holiday stage even the Grinch himself couldn’t have imagined.
Both consumers and retailers will rely heavily on technology to pivot effectively
and retain some sense of normalcy and holiday magic this year. Here’s what we
see, what we’ve learned and how you can stay ahead of the curve heading into the
holiday rush.
Will COVID-19 Help the Grinch Steal
Christmas This Year?
3. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
3
THE COVID-19 DOMINO EFFECT
We’re all feeling the effects of COVID-19 on our lives
and businesses. Expect the holiday rush to amplify
what we’re already seeing, both the good and the not-
so-good.
Let’s take a look at what has happened this year in
the retail space so you can better prepare for any
pandemic dominos that could be falling your way this
season and into the new year.
The Retail Space
GlobalPandemic
Job Loss,
Store
Closures
&
Financial
Strain
Supply
Chain
Cogs &
Mail
System
Overload
Early
Holiday
Shopping
Stay-at-
Home
Orders
&
Health
Concerns
4. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
4
COVID-INDUCED SHOPPING TRENDS
With the dramatic spike in online shopping, consumers will be
giving more physical gifts this year. Gifting experiences, such
as traveling or visiting the spa, are probably not going to be an
option in the near future.
Nearly 70% of consumers say
they will shift spending from
services to retail products.
As streaming online becomes
more essential in the new stay-
at-home culture, consumers
will look to upgrade electronic
devices to better support
work and entertainment from
home.
The stay-at-home lifestyle is
expected to fuel 18% growth
in consumer tech sales from
October to December.
GlobalPandemic
Job Loss,
Store
Closures
&
Financial
Strain
Supply
Chain
Cogs &
Mail
System
Overload
Early
Holiday
Shopping
Stay-at-
Home
Orders
&
Health
Concerns
5. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
5
The U.S hit some of the worst unemployment rates ever seen in April and May,
spiking at 14.7%. Americans are still struggling to find jobs as the holidays roll in.
This detrimental economic impact has shifted the mass consumer’s purchasing
mindset and caused a need for value and necessity. 32% of consumers are planning
on spending less this holiday season.
In contrast, high-earning households are poised to drive holiday sales this year.
With extra savings from reduced spending during quarantine added to their holiday
budgets, we expect this smaller group to add a much-needed boost to retail sales
this season.
FINANCIAL $TRAIN
GlobalPandemic
Job Loss,
Store
Closures
&
Financial
Strain
Supply
Chain
Cogs &
Mail
System
Overload
Early
Holiday
Shopping
Stay-at-
Home
Orders
&
Health
Concerns
6. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
6
With this shift in early online holiday shopping, retail stores are pivoting to support
a stronger online presence in the wake of health concerns. Not only have major U.S.
retail players such as Target, Bed Bath and Beyond and Best Buy communicated their
stores will be closed on Black Friday — but also the role of the retail store during this
time has completely changed.
Retail locations are no longer a place to sip hot chocolate and casually browse through
a plethora of sweaters. They will become pickup centers. Due to a spike in online
shopping that has caused increased shipping demands and expected bottlenecks,
delivery providers will struggle to deliver last-minute gifts.
Salesforce is projecting parcels shipped by traditional delivery providers — such as
FedEx, UPS and DHL — will exceed capacity by 5% globally between the week before
Cyber Week and December 26. That means potentially 700 million gifts are at risk of
not arriving at homes before Christmas. To combat this, stores will become contactless
fulfillment centers through curbside, inside or drive-through pickup.
THE EVOLVING ROLE OF RETAIL STORES
GlobalPandemic
Job Loss,
Store
Closures
&
Financial
Strain
Supply
Chain
Cogs &
Mail
System
Overload
Early
Holiday
Shopping
Stay-at-
Home
Orders
&
Health
Concerns
7. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
7
It was forecast that 10% of holiday sales would shift from Cyber Monday to Prime
Day; however, consistent boycotts revolving around flooding the mail system during
the election and empathy toward small businesses are overshadowing this Prime Day
along with a consensus of underwhelming deals. Amazon may not have taken as much
revenue as forecast.
While the full impact of Prime Day has yet to be determined, there is no arguing that
companies used that shift to begin early holiday messaging. Companies are capitalizing
on this to regulate low inventory over the course of three months rather than one and
ultimately generate sales during an otherwise bleak period. Eventually, we will see
spending spread more evenly across October through December.
Every year it seems the holiday season extends longer and longer. Black Friday and
Cyber Monday are more of a sale season than a long weekend.
This year is no exception and one of the largest players contributing to this has been
Amazon. With the shift of Prime Day from July to October, they are signaling the start
of holiday shopping and everyone is following suit.
HOLIDAY SHOPPING IN OCTOBER
GlobalPandemic
Job Loss,
Store
Closures
&
Financial
Strain
Supply
Chain
Cogs &
Mail
System
Overload
Early
Holiday
Shopping
Stay-at-
Home
Orders
&
Health
Concerns
8. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
8
Marketing strategies must evolve to fit the current customer mindset and
align with the changing market as a result of the pandemic. There are many
opportunities in this new landscape, but each business will have to discern
which solutions are a good fit for their needs — and their customer’s needs.
Here are four high-level, strategic responses that can help
your brand stand out from the holiday noise.
FOUR WAYS TO SHIFT MARKETING
STRATEGIES IN RESPONSE
9. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
9
ADD VALUE AND MAKE IT PERSONAL
Promoting value-based messaging is critical now more than ever, especially with
Americans still struggling financially. While the holidays are already a time to
promote strong savings and offer driven content, injecting an added element of how
your product will be valuable to the consumer or as a gift is key.
While we know dynamic and personalized content are known engagement and
conversion drivers, drilling down further to recommended gifting options for every
budget will be highly sought after. Similar to how consumers get frustrated with too
many viewing options on Netflix, this fatigue due to being overwhelmed is seen in
online shopping as well. Providing intelligent and savvy recommendations allows
the consumer efficient decision making and will only increase brand affinity.
1
10. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
10
MAKE THE EXPERIENCE SEAMLESS
In-store order pickup behaviors were trending upward in 2019, spiking 60% post-
COVID with demand for contactless solutions — and this demand is only being
exacerbated by shipping delays.
Featuring prominent in-store pickup callouts within web and marketing
communication will allow for a seamless experience and notify the customer of
extra measures taken to promote a positive shopping experience. Pairing this with
an added callout of how this will save time by removing shipping will be additional
affirmation to the consumer.
If a customer chooses to go the in-store pickup route, clearly conveying the store
nearest them with hours, exact pickup location and any additional details will create
a sense of ease during an otherwise hectic time.
2
11. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
11
ASSURE A SAFE SHOPPING EXPERIENCE
Consumers are now valuing companies who have their best interests in mind for a
safe shopping experience, with 35% of consumers saying they would be most likely
to purchase from an ad promoting safety precautions taken in stores.
Let customers clearly know all precautions taken in-store to ensure their
safety. Highlighting this messaging across all marketing channels is a proven
conversion driver. Since some customers still won’t feel safe returning to brick-
and-mortar locations, bring the store feel to your digital platforms. Inject virtual
appointments and livestreaming of experiential content. Meet your customers
where they feel most safe.
3
12. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
12
COUNTER POTENTIAL ONLINE
PURCHASE BARRIERS
As online traffic surges this season, total transparency is critical. 57% of consumers
anticipate shopping primarily online and having items delivered to their homes.
Make shipping timelines crystal clear. Highlight expedited shipping options with
prominent “order by” messaging so there is no confusion or disappointment around
the gift’s arrival date. To keep your customer’s gift giving hands-free, show off special
options that allow the consumer to ship the gift directly to recipient.
4
13. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
13
ADAPT. LISTEN. EVOLVE.
Remember, your customers are shifting more and more
online right along with you.
Ensure you are equipped to make quick pivots to adapt
to the ever-changing landscape. Keep communication
open with customers and listen to their changing needs to
evolve into an enhanced customer experience.
Together, you and your customers will make the most of
this holiday season — and many more to come.
14. HOW COVID-19 HAS RESHAPED HOLIDAY SHOPPING
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Thank you
(818) 703-8775 KERNAGENCY KERNAGENCY.COM
15. APPENDIX
SOURCES
1. Holiday Shopping 2019, eMarketer, 2019
2. COVID-19: Consumers change how they shop, work and live, Accenture, 2020
3. The Impact Of COVID-19 On U.S. Brands And Retailers, Forbes, 2020
4. Consumer sentiment and behavior continue to reflect the uncertainty of the COVID-19 crisis, McKinsey & Company, 2020
5. When is Amazon Prime Day 2020?, NY Times, 2020
6. The 2020 Elections Will Set (Another) Ad Spending Record, Forbes, 2020
7. How the pandemic may affect holiday shopping, Think with Google, 2020
8. What to Expect for Holiday Season 2020: 5 Key Consumer Trends, Criteo, 2020
9. Will COVID-19 kill the holiday shopping season?, CBS News, 2020
10. As Prime Day kicks off and holiday deals start early, is Black Friday dead?, NBC News, 2020
11. 4 ways shopping for the holidays is going to be different this year, CNBC News, 2020
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