The holiday season is just around the corner and the past 18 months of uncertainty and instability have left consumers yearning for some festivities and cheer. Although the pandemic isn’t over yet, rising vaccination rates and fewer restrictions mean many Americans will once again celebrate the holidays with family and friends at in-person events.
However, in-person festivities won’t be the only change we see this holiday season. The way consumers do their holiday shopping—and the marketing tactics that resonate with them—are going to look different from last year now that in-person shopping is safe again. Retailers need to get ready.
At Iterable, we’re big on people and preparation. To understand consumers’ plans for the holiday shopping season, what’s driving their purchasing decisions, and their attitudes towards ongoing digital transformation, we surveyed 1,000 shoppers across the U.S. in our second annual “Ecommerce Holiday Shopping Trends.”
Our findings show there’s an opportunity for retailers to distinguish themselves—if they can level up their marketing. By capitalizing on improved customer sentiment and embracing the intent to celebrate (and spend), brands can capture greater market share this season. The holiday shopping winners this year will be the retailers who are armed with tools that enable seamless and personalized cross-channel experiences for their customers. Here’s what we discovered.
Top Holiday Shopping Trends for 2021
1. Retailers can capture more market share if they motivate their shoppers.
Retailers have some good news to look forward to this holiday shopping season: improved consumer sentiment and an increased appetite to splurge on gifts.
Last year, 63% of consumers said they felt “somewhat or very negatively” toward the holiday shopping season as a result of the pandemic. In an improvement of sentiment, only 48% of respondents this year report feeling negative, with more than a third feeling neutral (36%).
Retailers still need to be sensitive toward consumer apathy, but the outlook for the 2021 holiday shopping season looks brighter than last year. And despite some apprehension, 42% of shoppers plan to spend more money on gifts during the 2021 holiday season compared to 2020.
There will be more market share for retailers to gain if they can motivate consumers, but it’s not going to be handed to them. Retailers need to increase positive messaging and empathy-driven marketing, while still empathizing with the apprehension consumers may feel about the spread of COVID-19 variants.
2. Retailer’s need a strategy that supports digital shopping, physical shopping, and everything in between.
A hybrid working environment isn’t the only post pandemic trend. Now hybrid shopping is in vogue.
Consumers are still digital-first in their shopping habits overall, but are slowly returning to pre-pandemic shopping behaviors. When asked how their behavior will differ from the 2020 holiday shopping season, 20% of respondents indicated they will do more in person shopping this year compared to last year.
| Consumers who plan to complete all or most of their shopping online. | Consumers who plan to complete half of their shopping online and half in stores. | Consumers who plan to complete all or most of their shopping in store. | |
| 2020 | 67% | 22% | 11% |
| 2021 | 51% | 33% | 16% |
| Percent change YOY | -16% | +11% | +5% |
However, just because shoppers are returning to brick-and-mortar stores doesn’t mean online demand will decline. Surprised? Don’t worry. It gets interesting. In fact, 50% of consumers say they will shop online more this year than they did in 2020. In addition, we found that 66% of high earners (respondents who make $100K or more) plan to complete more of their shopping online. Luxury retailers especially should be prepared to take advantage of this increased e-commerce appetite.
It’s clear that consumers still want to have an in-person shopping option, but it’s increasingly paired with e-commerce as well—whether it’s buy online, pickup in store (BOPIS), or browsing products on one channel and purchasing from another. Shoppers will naturally return to brick-and-mortar stores either now or in the future, so these holiday shopping trends show that brands must work on optimizing all experiences and ensuring consistency in brand identity and messaging—no matter the channel.
3. Consumers want authentic, personalized relationships with the brands they do business with.
Over three-quarters of respondents (76%) are more likely to purchase from a brand they have an emotional connection to, meaning mission-driven statements from brands have high value in 2021. However, the degree of consumer care varies by generation. Ninety percent of Gen Zers and 85% of millennials are motivated by emotional connections, compared to only 60% of baby boomers.
Consumers are most likely to shop with brands that can fulfill their needs (41%) and improve their lives (20%). But it’s important to remember that every customer is an individual with unique needs, wants, and interests. To appeal to your target audience, it’s crucial for retailers to regularly survey customers and use their feedback to form strong connections through strategic campaigns.
What tone resonates best with consumers? Last year, nearly one-fourth of respondents (22%) preferred promotions from brands with an empathetic and comforting tone, likely in response to the pessimism caused by the pandemic. But as consumers gradually return to their pre-pandemic lifestyles this year, more than one-fourth of respondents (27%) prefer promotions with a straightforward and no frills tone. Changes in consumer preferences are to be expected, which is why A/B testing is especially valuable to ensure messaging is on point for your target demographics.
When it comes to statements made by a brand’s leadership, consumers are equally divided about whether it does or doesn’t influence their purchasing decision. Our advice? Be authentic as an organization. Ensure your values and messaging are consistent across channels, including your leadership.
4. Timing matters, but preferences vary by generation.
The right message, at the right time, to the right generation is what matters most. Thirty-six percent of consumers plan to shop earlier this season, likely learning their lesson from last year’s late deliveries and supply chain issues. But exactly how early is “earlier?” A quarter of consumers (25%) plan to complete most of their shopping on Black Friday and another 21% plan to do so in November (unrelated to shopping holidays).
Make it easy for consumers to do their holiday shopping by sharing discounts early and differentiate your brand messaging in November to capitalize on shopper intent. Also, be sure to set up both your in-person and online infrastructure for success on Black Friday in anticipation of increased demand.
It’s important to consider generational differences as well for an opportunity to further segment. Gen Zers and millennials are more than twice as likely to plan to shop during Black Friday than baby boomers. Furthermore, baby boomers are one-third more likely to shop during November than millennials and Gen Zers, and are also 2.5x more likely to shop during October than Generation Z.
We also found that younger generations are more likely to be motivated by sales events, while older generations prefer to purchase items as soon as they are in stock. Forty-three percent of Gen Zers and more than a third of millennials (35%) plan to wait for an online sales event to purchase gifts, compared to only 16% of baby boomers. Be strategic and create campaigns that will resonate with your target audiences. For younger generations, consider messaging more oriented around prices, while for older generations, message them earlier and focus on products.
Finally, through which channels do consumers want to receive promotions? More than half of consumers prefer email (52%), followed by text, and then the retailer’s website. And, 84% of shoppers are likely to download a retailer’s app for exclusive promotions. Clearly, the online user experience you provide shoppers is important to drive purchases and exclusive sales can be a compelling trade-off for gaining consumer’s personal information with consent.
What This Means for Retailers
Consumers deserve an exceptional holiday retail experience from brands they do business with this year. These holiday shopping trends show that, more than ever, shoppers want cohesive cross-channel experiences from retailers they can form an authentic relationship with. As a result, retailers need to personalize their marketing campaigns using up-to-date data. With powerful solutions that enable excellent, individualized user experiences, retailers can take advantage of consumers’ increased appetite to spend.
To learn more about the 2021 ecommerce holiday shopping trends, take a look the infographic below.
And, if you’re looking for support in creating personalized experiences that build emotional connections across channels, schedule a demo to get in touch with our team.
Click the infographic to download your own copy!
