Like every year, retailers expect robust sales during the holiday season this year, mainly because many people have been stuck at home, which means increased savings. However, the coronavirus could bring this holiday season to a halt. But what can businesses expect from a COVID-19 stricken 2020 holiday season? Will they have to brace for impact, or can they adopt new strategies to prevent a disaster in the making? To find out, read on.
Looking at the Bigger Picture
According to the National Retail Federation, sales are estimated to grow anywhere from 3.6% to 5.2% from the beginning of November to the end of this year. This translates to $755.3 to $767 billion in spending. Apparently, consumers are very engaged and are looking for opportunities to celebrate the Christmas season despite the rising damage of COVID-19.
Americans with extra money lying around due to federal relief checks granted at the beginning of the global pandemic, lower overall spending, and lower gas prices could end up creating a shopping uptick. On the other hand, millions of Americans have remained jobless for quite some time, making it difficult for the economy to recover after a cascade of shutdowns to contain the spread of the coronavirus.
Moreover, as COVID-19 cases rise across the globe, lawmakers have been forced to impose new restrictions. These restrictions can have severe consequences, as the road to recovery for the economy could be set in reverse.
As dire as things may seem, consumers are showing up to prepare for the holiday season. The concept of holiday-time resilience is a factor that cannot be undermined, nor can it be ignored.
2020 will be about tangible gifts since spa visits, travel, and other expenses on services that require physical movement will be off the table. Think of it this way; grandma won’t visit the family, so she will send gifts instead. Since she will not be spending money on airfare, she will have more money to spend, meaning she will spend more on gifts than she usually would.
2020 Will be a Techie Holiday
This holiday season, the consumer electronics sector will likely see a colossal increase in numbers, with Americans looking to upgrade their tech and gadgets to work from home productively, and even entertain themselves. NPD group estimates an 18% increase in sales for consumer electronics due to the stay-at-home lifestyle from October to December. People will need to keep finding new ways to keep themselves and their families entertained and avoid the emotional exhaustion caused by long periods of lockdowns.
Preparing for the Holiday Season during the COVID-19 Pandemic
The pandemic could be challenging for many businesses as they prepare for an unprecedented retail landscape. Due to the pandemic, people have changed their shopping habits, of which some could be permanent. Even when the pandemic is removed from the equation, businesses had prepared their supply chains to ensure timely deliveries during the holidays for greater customer satisfaction, increased brand loyalty, and of course, more sales. Given the complexity of logistics and production this year, planning and preparation need to be given enough importance to ensure a successful holiday sales season.
Businesses can expect the following shopping trends due to the ongoing pandemic:
- Decreased Spending
Due to financial stress and economic uncertainty, consumers will most likely decrease their holiday spending.
- Increased Online Shopping
The retail industry has been hit hard this year but ecommerce is growing exponentially. In fact, ecommerce will continue to grow as more consumers have permanently shifted towards online shopping.
- The Strain on Supply Chain
There will be a considerable amount of pressure on businesses during an already troubled holiday season with changing consumer behavior. Ecommerce stores will have to prepare their supply chains to meet the increasing demand, while retailers will have to move their resources to fulfillment centers to process a mounting number of online orders.
As businesses prepare for the Christmas and the holiday season, here are three effective strategies that could turn things in their favor:
1) Understand the Entire Product Timeline
To have a successful and profitable holiday season, businesses will need to understand their entire product timeline from product manufacturing to delivery to distribution centers. By determining how much time each step in the product timeline takes, businesses can come up with a well-planned schedule for holiday season sales.
2) Manage Costs
Many businesses consider offering striking product combinations and packaging for the holiday season but these can add costs quickly. To determine what products to sell, businesses need to consider all costs, i.e. materials, design, transportation, etc. and plan everything accordingly.
3) Customizing Offers
Businesses need to be careful not to exhaust their budgets to deliver custom orders. Customization increases costs, requires additional time and could result in an unsellable product. To prevent this, all expenses need to be evaluated for a custom design or product, which will allow businesses to determine whether the customization is worth all the extra costs and effort.
To successfully make customizations for the holiday season, here are a couple of tips worth considering:
- Use holiday stickers or labels instead of customized boxes;
- Use standard containers or bottles, and decorate them with unique labels instead of opting for specialty options;
- Add little tidbits like coupons, stickers, etc. to packages for a more personal touch;
While the holiday season this year is unpredictable, businesses will need to alter their strategies according to the factors mentioned above to stay afloat and perhaps even increase sales compared to the holiday seasons of yesteryears. As challenging as it may seem in light of COVID-19, all projections and research suggests that businesses are in for a pleasant surprise this Christmas.