2020 Holiday Sales Were Unexpectedly High. What Does That Tell Us About 2021?

For years, people have joked about Christmas in July. It’s no joke, though: For retailers in 2021, sales planning for holiday shopping started seemingly in July.

Why the rush? Retail sales for the holiday season last year jumped 8.3 percent from 2019, according to the National Retail Federation. This skyrocketing number happened for a couple of reasons. The first was the opportunity for normalcy for shoppers craving some semblance of the “old times.” Consumers wanted to lift others’ spirits through gifts and goodwill, and the holidays gave them the perfect excuse to indulge by spending on gifts for the people in their lives.

Another reason for the surge in holiday shopping was the lack of spending in other market segments. Tourism and travel tanked in 2020 for obvious reasons. Consequently, buyers had more disposable income. They were also spurred by the promise of another round of stimulus money.

Finally, people just wanted to return to the retail customer experience. Mall and big-box retailer traffic got a bump — even with mask mandates. And even if consumers just opted for buy online, pick up in-store (BOPIS) retail, they still got a tiny taste of shopping in a brick-and-mortar location.

Knowing this, retailers need to capitalize on the post-vaccine shopping environment. Here’s how to do so:

1. Advertise products and services with a humanity-first angle.

Gift-giving has taken on a different meaning during our “new normal” than it did before. The pandemic showcased people’s collective tendencies to protect, grow and gift according to Maslow’s hierarchy of human needs. For instance, Google’s research tells tales of neighbors buying each other food and family members giving grocery gift cards rather than a more traditional gift. In other words, people are buying items that feel practical and appropriate.

This puts the onus on retailers to reimagine the purpose of their products during holiday promotions. People might still be less apt to buy things that seem impulsive. On the other hand, just-for-fun gifts can be the right choice in certain circumstances. The goal for holiday retail marketing will be to connect merchandise with a contemporary, humanitarian meaning.

2. Expect the cash register to ring — but a little less.

It’s not reasonable to assume that holiday sales will hit the record levels they did last year. Research predicts total sales to be up, but only by 2.7 percent (as compared to last year’s 8.3 percent). As a result, retailers need to piggyback off growth in other sectors for holiday marketing.

How does this work in action? Home sales are going through the roof right now, so a retailer could leverage the improvement in real estate by promoting products that could make their house feel more like a home. Leaning into these types of complementary holiday retail marketing strategies can help individual retailers adapt to changing consumer habits, all while riding offline and online shopping trend waves.

3. Offer multichannel retailing solutions.

One of the industries that did well during last year's holiday season was e-commerce, which saw a 47 percent bump. This isn’t a surprise. People spent a lot of time on their devices throughout the pandemic, causing curbside service to rise more than 200 percent. Nevertheless, many still craved the brick-and-mortar shopping experience. In May 2020, nearly two-thirds of participants in a Criteo survey said they missed in-person buying.

To capture all types of shoppers, retailers will want to put hybrid measures in place that offer the right kind of instant gratification and convenience. This can include BOPIS options as well as QR codes. QR codes are especially useful ways to bridge the gap between coming to a store and shopping online. For example, some QR codes are only available in the store itself, playing the part of virtual concierge desk. Alternately, QR codes can drive BOPIS shoppers into a store in search of an even more personalized and focused experience.

Retailers that make changes to the way they respond to shifting consumer sentiments and buying landscapes should be able to earn a nice piece of the post-pandemic shopping pie.

Lou Thurmon Shonka is the vice president of marketing for Harbor Retail, a design + build firm serving retailers.