As Andy Williams famously sang in his seasonal classic of the same name, the year-end holiday season is considered the “most wonderful time of the year.” However, the year 2020 has sung a different tune thus far from every other year — and as many businesses that closed during the first wave of the pandemic still struggle to recover, it’s yet to be seen if this year-end holiday season lives up to Williams’ iconic lyrics.

The restrictions forcing people to work and shop from the confines of their homes accelerated an already advancing e-commerce market that was years in development. As a result, the pandemic has created a case study for e-commerce and retail of the 21st century. Moving forward, this holiday shopping season will likely witness one of the next major shifts toward a different future in retail.

From the Shop to the Laptop

It’s been well documented in the retail industry that during the last decade e-commerce has encroached on brick-and-mortar sales.

In 2019, for example, consumers spent US$601.75 billion online, compared with $136.4 billion in 2007, according to a Digital Commerce 360 report — a 77 percent increase.

Not only have total sales skyrocketed, but so has the e-commerce share of total retail sales. Brick-and-mortar shops might not be out of the game quite yet, but the evident growing demand for the variety of items and convenience of buying online certainly looms large.

Fast forward to Q1 of 2020. The pandemic created a unique scenario whereby e-commerce sellers sold in record numbers. With much of the population relegated to staying at home during the peak of the first wave, consumers went on their devices at home to shop. During Q2 of 2020, consumers dished out $200.72 billion for online purchases with U.S. retailers, an increase of 44.4 percent from the $138.96 billion spent in Q2 of 2019.

This year, retail e-commerce sales totals will depend largely on the eagerness of shoppers to spend large amounts on gifts if they’re facing reduced disposable income — not to mention fears about being in crowded spaces.

Despite these concerns, Salesforce predicts that up to 30 percent of global retail sales will be made through digital channels this upcoming holiday season. Meanwhile, Deloitte estimates that holiday e-commerce sales will reach between $182 billion and $196 billion, which is a 25 to 35 percent increase from 2019’s $145 billion.

Attention to Logistics

As COVID-19 drives more e-commerce sales, retailers must make new considerations to prepare accordingly, which translates to new logistical considerations, ranging from site infrastructure to last-mile delivery.

For retailers looking to cash in during the opportune holiday shopping season, it’s imperative first to review the existing retail infrastructure and assess its preparedness for a larger volume of consumers.

During the last few years, retailers have invested significantly to improve the customer experience and cater to the growing e-commerce demand. Walmart is one example of a big-box retailer that has successfully expanded an infrastructure now capable of offering quick delivery and a wide variety of products on a platform vying with Amazon.

Although most retailers don’t have the financial capacity to upgrade their e-commerce platforms to the extent that these giants are able to, finding solutions for sustaining uptime, ensuring fast pages load times, and protecting consumers will all be especially critical for the anticipated increase of the 2020 holiday shopping season. Shopify, which saw enormous revenues in Q2 of 2020, remains the e-commerce platform white label leader, and will likely be the crutch on which many proprietors depend in the coming weeks.

Some e-commerce businesses may also consider invisible technologies like virtual reality and automation processes to enhance the online shopping experience. Or consider social commerce to promote their products — a growing e-commerce channel.

On the delivery side of logistics, e-commerce sellers have some considerations to mull over regarding the cost of shipping, which has risen significantly for air and last-mile delivery. While many sellers spent time and money upgrading their last-mile delivery during the last two years, the pandemic has posed some new supply chain challenges.

Last-mile delivery, which is already considered the most inefficient part of the fulfillment process, will see much more demand from consumers this season — and questions remain if the disrupted supply chains will be able to keep up.

The cost of shipping by air and sea rose by several percentage points during the summer. These increased costs could trickle down to the consumer in some cases, but could also end up as costs that sellers will need to absorb in order to appease shoppers.

Looking Beyond the 2020 Holiday Season

How e-commerce sellers respond to the COVID-19 challenges will dictate what’s to come. Because the pandemic could last well into — and perhaps beyond — 2021, the 2020 holiday shopping season will likely set important precedents both in the market and logistically.

Brick-and-mortar stores may not disappear from our lives entirely, but their slow demise could be hastened by the prolonged imposition of social restrictions brought on as a result of the pandemic.

Before COVID-19, brick-and-mortar stores experienced a gradual decline that matched the increase of e-commerce sales. So with a sustained pandemic, we will likely continue to see the sharp acceleration of e-commerce, where consumers of all generations grow more accustomed to online shopping.

Even recurrent shopping for groceries in the U.S. has now become a booming segment in e-commerce. As this trend continues, logistics will have to adjust, which means predominantly brick-and-mortar retailers will shift their real estate holdings from physical shops to distribution centers for their e-commerce infrastructure.

Only time will tell what happens with the 2020 holiday shopping season, but the developments in e-commerce during the last few years are now blossoming to a greater degree because of the conditions forced by the pandemic.

Charles Darwin famously said it best: “Survival of the fittest.” As the limitations we face pave the way for the dominance of e-commerce, it’s the retailers who can best adapt to the changing logistical and consumer demands that will lead the industry this holiday season and for years to come

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This article first appeared on E-commerce Times on October 8th, 2020:

https://www.ecommercetimes.com/story/The-2020-Holiday-Shopping-Season-Will-Set-Long-Term-Precedents-86871.html

The last quarter of the year is traditionally the busiest and most profitable time for e-commerce worldwide. However, this year’s events unfolded a strange and unusual reality, meaning this year’s peak shopping season will look very different from what we know and expect.

Since January of 2020 more people are turning to online shopping, which makes room for many early-bird sales, as a result, lots of items are going out of stock faster than ever.

These last months of the year are the opportunity to achieve the sales and numbers goals you set early in the year. Failure to adequately prepare for this event could be catastrophic and result in big losses of potential earnings and customer confidence. According to a Statista 2020 survey among U.S. consumers, 49 percent of respondents were more interested in doing their holiday shopping online when compared to last year’s data. This accumulates to 50%-60% of US shoppers who are planning to do their holiday shopping online.
This shopping season, we are possibly going to see a sustained period – months even – where every day is like Black Friday. Online businesses should get ready and prepare for Black Friday, Cyber Monday (collectively abbreviated BFCM), and all the shopping holidays beyond.

Start today!
If you haven’t done so now is the time to get started. Black Friday is just a month away, and people are home searching away and saving those favorite products in their Wishlist. If you’re able to create a pre-party and offer those promotions early, it will also work to your advantage. People are home and, in most cases, won’t wait for those last year sales if they can get them now.

Know your audience – with your site search data
Knowledge is power, and knowing what your consumers search for during this year, compared to the same time last year, will give you vast knowledge and understanding in where to direct your resources – which product was a best seller, or what could have been a best seller if you had more supply of it.
Your website search tool can give you so much – as Zoomd Adam glass explains, both on the button line earnings and on your strategic plan.

Share those coupons away
This is one of our golden rules, so we’re keeping it up high, same as last year. This is the time to enrich your offerings with coupon codes, giveaways and special offers, not only to keep the loyalty of existing customers but to attract a new batch of consumers eager to get their new holiday shopping at a discount.
Be competitive as most retailers offer at least 20% off during black Friday, with some offering even 30%-50% off for first time orders, or over a certain number of items selected. Present those discounts clearly on you home page for new and existing customers to see, send it to your existing subscribers. A last tip here will be to add a countdown banner, not only to add urgency to your amazing offer, but it creates excitement and something to look forward to.

Avoid the “holiday” or “covid” offers and keep it simple
According to a May 2020 survey by Adobe, both in the U.S. and in major global economies, people are way less receptive to “Covid-19” type of messaging now. The survey found that a brand’s COVID-19 response was way more important in June when 72% of surveyed shoppers factored it into their purchasing decisions. In the most recent survey, only 44% of consumers do so.
Naturally, people want some escapism from current events – this is true even when it comes to advertising and also when it comes the other relaxation methods such as online shopping 😊

Do not abandon the brick and wall store if you can
Earlier this month in a different analysis for the upcoming M-commerce season, we learned that shipping and last-mile delivery are going to be under very big demand, thus slowing down shipments and making them less cost-effective on both the seller and buyer side.
According to Salesforce, in-store, drive thought and crowdsourcing services will see 90% spike in over the previous holiday season.
People do want to buy online in the safety of their own homes, keeping social distancing, but they just can wait for the shipment or carry the higher than last year’s costs of shipment, preferring to pick up with convenience at their local store.

Technology maintenance
Even before making sure you have enough products or supply, make sure your website or app will support this end of the year high traffic peak. No use in having big promotions, exclusive items and offers if people can’t reach it. To thrive in today’s retail climate retailers must invest in scalable technologies to help them prepare for unpredictable spikes in online business.
This strategy likely includes upgrading to a flexible e-commerce platform that’s ready to scale with fast-changing traffic demands. And retailers new to selling online (or selling at a much higher rate than before) must also consider the security implications of shifting to online sales. Malware blockers, firewalls, and security certificates are critical to protecting customer data. Going back to your search tool, spending time looking at search terms that are driving 0-result errors and fixing these using synonyms is another good quick win.

Plan your media mix and optimize as you go
Mix your ad formats: You’ll absolutely want to utilize different ad placements as you start to deploy your holiday paid and social campaigns to support your KPIs. By playing with different formats across different platforms, you’ll win on cheaper ad real estate and then drive a higher conversion rate.
It’s easy to get into the habit of repeating what works. To grab ahold of the highest returns this holiday season, you’re going to have to crack open those analytics and be smarter with your paid media. Being smart also means testing and learning. Stick to the methods that are tried and proofed, but also dedicate a small amount (5-10%) of your overall paid media budget to test new channels, strategies, promotions and more. While the digital era has created many powerful new opportunities, it also poses challenges when tracking, analyzing and optimizing marketing and advertising performance across different platforms. Even more so, in the busiest time of the year you can’t afford to invest so much of your time optimizing your campaigns on all of the different platforms.
We absolutely get this, and that’s why we opened our robust mobile user acquisition platform to advertisers of all sizes who are looking for a simple and clear UA platform connected to premium media channels such as Google, Snap, Tiktok and other ad networks. This way you gain by running on those familiar media sources you love and know that works for you, while testing new sources in a clear performance model of no results, no pay.

If you are eager to learn more about our technology, we’ll be happy to help you grow. Let’s talk.

Stay Safe
Happy M-commerce season