How COVID-19 Is Changing Ecommerce This Holiday Season
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How COVID-19 Is Changing Ecommerce This Holiday Season

COVID-19 has drastically altered our society in a lot of ways, including the way we do business. According to emerging reports, the pandemic has

November 14, 2021


If there’s one word we’re all tired of hearing it’s this one. This year has thrown us curveball after unprecedented curveball, upending norms across the board from professional sports to the stock market. Most notably, 2020 brought us the Coronavirus pandemic which rocked our world and left us disoriented by near constant uncertainty.

COVID-19 has drastically altered our society in a lot of ways, including the way we do business. According to emerging reports, the pandemic has expedited the shift to e-commerce by five years meaning online retailers have a matter of weeks to capture five year’s worth of e-commerce traffic this holiday season. Combine this staggering reality with giant shifts in consumer buying behavior and you have yourself, dare I say it, an unprecedented 2020 holiday shopping season.

Accelerated Shift To E-Commerce

Online shopping was initially jump started by the widespread closures of physical stores around the country. As stay-at-home orders went into effect and non-essential businesses were ordered shuttered, online shopping became the only option. Even for essentials like groceries, medical supplies, and food service, consumers were discouraged from venturing out unless absolutely necessary. Warehouse giants like Amazon and online grocery ordering boomed while traditional retail came to a screeching halt.

Since those early days of total shutdown, sectors of the economy have begun to reopen, but e-commerce is still on the rise due to lingering concerns over health and safety. When you can have something delivered to your doorstep within a matter of hours, why risk exposing yourself and others shopping in-store? Fear of crowds and reluctance to adhere to safety measures put in place by merchants are other key reasons online shopping has become an attractive alternative.

And now, as we head into the holiday season, online browsing and shopping continues to be a major player. Google estimates that nearly 75 percent of holiday shoppers will shop more online this year for gifts and other needs than they have in the past.

New Consumer Spending Habits

Consumer buying habits have changed in pretty much every way. To put it simply, different people are buying different things, differently. We all know how obsessed consumers have become with toilet paper and hand sanitizer, but how else have purchasing trends shifted?

Here are five ways consumer behavior has changed in response to COVID-19 and how you can keep up.

1. Consumers are shopping earlier in the season.

According to a LendingTree survey, 1 in 4 shoppers have already completed their holiday shopping as of early October. In past years, those are numbers we wouldn’t expect to see until November. Consumers are shopping earlier in the season this year due to a couple of factors. First, because of the panic buying tendencies we saw earlier in the year, consumers may have a fear of items being out of stock when they go to purchase. To avoid this possibility, shoppers are grabbing this season’s hot items well before the bulk of the public makes a run on them between Thanksgiving and Cyber Monday, also known as the Cyber 5.

Anticipated shipping delays is another reason why savvy shoppers have already started locking down holiday purchases. During the peak of quarantine, consumers were experiencing excessive shipping delays due to supply and personnel issues. To ensure gifts arrive on time, holiday shoppers are getting a jump on their shopping well ahead of the usual Cyber 5 rush.

So, how can your business adjust to capture the earlier sales?

Priority number one: your holiday advertising should start now. Don’t wait until the typical holiday shopping window to publish gift guides and holiday themed ads. In year’s past, advertising budgets might have been wasted if used too early in the season, but not this year. Consumers are getting into the holiday spirit early this year.

2. Consumers are favoring delivery and pickup options.

In addition to shopping early, buyers prefer merchants who offer contactless delivery or pickup options. Buy-online-pickup-in-store (BOPIS), curbside pickup, and subscription-based purchases are on the rise. Having gifts in hand well before the holiday rush is a big priority for shoppers this year. No one wants to brave the last minute crowds to finalize a gift under normal circumstances but especially not this year.

Introduce convenient pickup options if you don’t already have them. Utilize curbside pickup as much as possible. And when it comes to shipping, the faster, the better. Find ways to offer free or faster shipping to loyal customers, and make sure you account for possible shipping delays when setting your “last day to shop for on-time delivery.”

3. Consumers are gifting virtually.

One of the hardest parts of this pandemic has been the way it keeps families apart. Weddings, funerals, graduations, and baby showers have all looked different this year and the upcoming holidays will be no different. With many friends and family opting to not get together or travel out of state for the holidays, expect shoppers to rely more heavily on virtual alternatives to traditional gift giving. This will include e-gift cards, subscriptions, and pre-wrapped gifts.

In order to adjust for this new trend, focus on virtual options more than you have in past years. Make sure website visitors can easily find where to purchase gift cards and if you don’t offer e-gift cards at the moment, add that service. Especially as we get into the beginning of December when holiday delivery isn’t guaranteed, gift card options should be prominently displayed and promoted.

Consider adding gift wrapping and/or gift messages to your list of available services. The more personalized you can make your products the better. Virtual gifting will never replace an in-person experience, but the goal is to make it as personalized as possible for gift givers and recipients.

4. Consumers are spending differently.

In general, consumers are cutting spending in categories like travel, luxury goods, vanity products, etc. and increasing spending in other sectors like entertainment, food and drink, and home items. Unemployment and fear of future economic security are driving this shift. According to a poll by McKinsey & Company, “Around 40 percent of US consumers have reduced spending in general, and they expect to continue to cut back on nonessentials specifically.”

How can you make sure your brand or business weathers the storm? Here’s a few key strategies:

  • Get creative with product offerings. If you’re in one of the industry sectors hardest hit by this pandemic, you’ll have to think outside the box to keep your business relevant. Maybe you need to pivot to an “essential” product offering, or maybe there are creative ways you can adapt your current products to survive the challenging environment. If complete changes or adaptations aren’t possible, make yourself essential through creative marketing. Themes of nostalgia, family, home, return to normalcy, self-care, etc. are effective messages right now.
  • Incorporate philanthropy. Consumers might be more willing to buy a “non-essential” product or service if they know a portion of their purchase is supporting an important cause. More than ever, people are looking for opportunities to help and show that they care. Leverage this desire by linking your brand to philanthropic efforts.
  • Offer deals and discounts. The primary impediment for many consumers right now is finances. If you can find a way to lower that hurdle, you’ll see an increase in sales. Discount codes, free shipping, and incentives like buy one, get one, are excellent ways to drive value and affordability for consumers.

5. Consumers are prioritizing health and safety.

How a company individually contributes to the fight against COVID-19 has become an important factor for the average consumer. Although an online retailer’s approach to safety protocols might not be as visible as a local grocery store, consumers are still looking for companies they can trust. Consumers want to know that you’re taking things seriously and implementing changes to protect your employees and customers.

Message your brand for the current concerns around health and hygiene. Be transparent about what steps you are taking to keep your employees and customers safe. As mentioned earlier, contactless delivery and pickup options are essential services to meet new safety needs.

Is It Too Late To Implement Changes Or Shift To Online Sales?

No. There’s still time to take advantage of the massive shift to e-commerce this holiday season, but don’t delay.

Are you ready for a digital-first holiday shopping season? If you need to update your website, kick start holiday advertising, or get an online store up and running, we’re here to help.