2020 was - an overused but true phrasing - unprecedented. 2021 brought in some hope of returning to “normal” but the newer waves of COVID-19 washed away all those hopes and kept many from seeing their loved ones in person or from shopping in physical stores. Nevertheless, things had started to move towards ‘normalcy’, which brought a shift in the mindset of consumers and retailers as they looked ahead to the holiday season. Shoppers have formed new habits as events of the past several months transformed their spending behaviours, raised new questions, and the Omicron wave seems to have further impacted shopping behaviour.
Did shoppers flock to stores or stay away?
What do consumers expect from their shopping experience in-store and online?
How has 2021 impacted lifestyles, priorities, altered purchasing preferences, and implications for holiday spending?
What were the key behavioural insights that can help brands meet and exceed changing consumer expectations?
Let us navigate through these uncharted waters.
Borderless access surveyed consumers worldwide to help retailers and brands understand how consumers planned their shopping for the 2021 holiday shopping season.
A little of everything - Consumers preferred hybrid mode of shopping
The million-dollar question from brands is about online shopping versus in-person shopping - how did the balance look last year?
At the beginning of the pandemic, more and more consumers preferred shopping online. However, the preference shifted to the hybrid model of shopping in 2021 even with the continued uncertainty around in-person shopping.
Shoppers embraced the omnichannel experience mostly because they wanted the best of both the shopping modes. In-store footprints did increase, but consumers also brought their pandemic-induced digital shopping habits with them. Shoppers blended in-store browsing and discovery with the convenience of online shopping.
However, concerns regarding online shopping were mitigated to an extent with in-store pickup. Logistical challenges during the pandemic resulted in delivery delays and product scarcity. Hence, in-store pick-up seemed a better option to avoid these issues.
With such a surge to the hybrid model of shopping, retailers must ensure that digital and physical shopping experiences are closely coordinated.
The sooner the better! Consumers started shopping for the season well before 'the season'
The holiday shopping season typically begins in earnest around Thanksgiving with the weekend between Black Friday and Cyber Monday. But in 2021, consumers started shopping early to capitalize on big discounts and seize opportunities to buy sooner rather than later.
Brands and retailers promoted their holiday offers early to lock in sales and cement their position as the "go-to" choice. With that, they not just pulled the demand forward but also ensured enough time to fulfill and deliver orders on time, considering the supply chain and logistical challenges.
Consumers were anxious about missing out on any discount or exciting offers. Concerns regarding shipping delays and being exposed to crowds also pushed early sales.
Looking into consumers’ shopping bags.
Personal and non-gift items for families topped this season's shopping list.
As online shopping has been the preferred shopping mode since the pandemic, consumers loved bouncing between their favourite brands’ websites to find a perfect gift for their loved ones.
What changed? Understanding the shift in holiday shopping trends this year
Similar to the 2020 holiday season, which was anything but ordinary, in 2021 consumers spent less, looked for better-priced alternatives, with heavy discounts and focused on mindful spending.
Shoppers income meant lower shopping budgets and more consumers opted to spending quality time with friends and family to celebrate the festivities.
The 2 big changes we noticed this year were, an increase in people choosing local shops/small businesses and opting for brands that are driven by a purpose.
What do brands need to know?
Consumers obvious top expectation is always discounts and deals, a no-brainer for brands and e-commerce portals. A close second to discounts in 2021 was the expectation of ‘loyalty rewards’. Brands should consider leveraging this area especially with the rise in direct-to-consumer (D2C) sales and a clear willingness from consumers to shop for their favourite brands online.
With the increase in online shopping, consumers expect hassle-free returns as well as ‘personalization’. An effective personalization operating model, when executed well, enables brands to not only lead but to also achieve a sustainable competitive advantage. Moreover, personalized experiences drive up customer loyalty and brand stickiness.
The 2021 holiday shopping season turned out to be a mixed bag with some consumers choosing either physical stores or online stores only, and some combining both in their purchase journey. Brands should remain agile and use a consumer-centric, omnichannel approach to best reach and engage shoppers. To become market leaders, brands will need to reach their audiences both digitally and in physical stores.
Brands and businesses should look to exploit early shopper trends by going direct-to-consumer or improving their digital presence. They should remain consumer centric to fulfil expectations and make the most of the 2022 shopping season.