It's been quite a year – and that's an understatement – but it's finally drawing to a close. For many of us, that means shopping for the holidays. Even if your personal shopping is over and done with, there's still a lot to unpack in terms of the 2021 holiday shopping predictions and what they mean for businesses. One thing is for certain: Online shopping will have a major impact on this year's shopping season. Online shopping continues to rise in popularity among buyers. According to Oberlo, there were 900 million more digital buyers in 2021 than in 2020, a 4.4% increase. Additionally, Deloitte found that 60% of consumers prefer to do their Christmas shopping online.
While it's impossible to predict shopping trends and details with 100% accuracy, an analysis of common shopping predictions can help us to perceive which of these forecasts is most likely to happen.
How COVID-19 will affect the 2021 holiday season
The rollout of the COVID-19 vaccine in early 2021 allowed businesses to relax some of their protocols, while adding a level of comfort for vaccinated individuals. In early 2021, approximately one-quarter of American shoppers said they would not go to indoor shopping malls without getting their vaccines, according to Statista. Now, with over half of the U.S. population vaccinated, more people are comfortable shopping in-store: One-third of American consumers said they would "definitely" shop in-store for Black Friday, which is double the number of people who reported the same in 2020. Only one-fifth of respondents said they would "definitely not" shop in-store.
Regardless of how people choose to shop, they might struggle to find the items they want. Ongoing supply chain issues and labor shortages are making it difficult for retailers to keep their most popular items, such as video game consoles, on their shelves. Stores have already started rolling out their holiday discounts for these products, so consumers will likely take advantage of these savings and ensure they get everything in time for Christmas.
2021 holiday shopping predictions
1. The holiday season will last longer.
Research from consulting firm AlixPartners indicated that 53% of consumers planned to start their Christmas shopping before Halloween. Some consulting firms included October in their assessments as the official beginning of the holiday season for the first time.
What it means for businesses
This is especially true when it comes to extending the window for returns. Amazon has extended returns for many items that have been purchased throughout the holiday season (which it defines as Oct. 1 through Dec. 31), allowing returns through Jan. 31. This exemplary customer service acknowledges that the early start of the shopping season means that gifts may be given outside the normal window; small businesses should consider doing the same to ease the process for their customers.
2. The majority of purchases will be online.
Last year, in the heart of the pandemic, when we still innocently thought it would only be a few months before we were all hugging each other again, the retail industry reacted to the sudden change in the economy by focusing on online sales. "Online or die" seemed to be the thought, and it proved to be true for many businesses.
Fast-forward to this year's holiday season, and things haven't really changed much. Adobe Analytics forecasts that U.S. online sales will hit $207 billion from Nov. 1 to Dec. 31, a 10% increase from 2020 and a record level of sales.
What it means for businesses
If a business isn't offering online services by this point, we're not sure how to make them understand how necessary it is. You should offer as many of your products or services online as possible, and focus on making transactions smooth and painless for the customer.
3. Products for staying at home will be booming.
Though restaurants and other leisure facilities have reopened, many locations still have limitations. Additionally, some consumers may not be comfortable returning to their old spots, especially during the winter months, where outdoor dining is less likely to be an option. So there's a good chance that what people actually buy for gifts will reflect the new normal: staying home, cooking for the family, being comfy at all times and gaining weight.
We've already watched home fitness equipment boom in the summer of 2020. With many offices taking a hybrid approach to work, people are still going to be spending a significant amount of time at home. For the holiday season, analysts predict high sales in appliances, home improvement projects, and other things to build a cozy living environment.
What it means for businesses
Know your cozy: Determine which of your items or services contribute to a comfortable home, because those are going to be in demand over the next several months.
4. Mobile purchases will have their best year to date.
Oberlo noted that mobile purchases are growing year over year. If 2020 was anything to go by, mobile purchases will be the big winner this holiday season.
What it means for businesses
According to Lexi Sydow, senior market insights manager at App Annie, retailers should "prioritize features that resonate with shopping-from-home and socially distant needs," meaning that apps should be more user-friendly than ever to capture the most holiday sales. Offering incentives, such as a certain percentage off a customer's first in-app purchase, should also help advance the trend. Ensuring that your brand's logo design reflects the colors and moods of the season to be readily identifiable amidst all the other retail apps is an important step as well.
5. Curbside pickup will be a big boost to purchasing.
Online selling is one thing, but what happens when a customer can't get a product shipped to them? What if it's sold out on the store's site but available at their local retailer?
That's where curbside pickup comes in. This trend is another easy prediction, as it's already boosting business for many retailers. The trend is expected to continue as the weather turns bad and we face the prospect of walking all the way across the parking lot in the snow, only to have to go back because we forgot our mask in the car.
What it means for businesses
Big chain stores like Target and Walmart have already anticipated this curve by deploying their holiday workforce in areas like pickup and delivery. Offering curbside pickup is an easy way to retain your customers without building in much overhead.
6. Overall sales will rise in 2021.
Multiple retail analysts have predicted a sharp rise in year-over-year spending due to the return of in-store shopping as well as persistent consumer demand. Over the past several months, buyers have increased their spending on big-ticket items like electronics and jewelry. This trend is expected to continue into the holiday season, with a 7% growth over 2020 forecast by management consulting firm Bain.
What it means for businesses
With more people ready to spend this holiday season, businesses can expect a higher growth rate than the previous year, especially on higher-priced items. However, with supply chain disruptions and continued worker shortages, you may need to strategically identify which items to stock – and be transparent with consumers about availability.
7. Tracking Black Friday sales will contribute to Christmas sale success.
Accurate sales data from past years may not mean much, but Black Friday has traditionally been the big opener to the holiday season. So current data can give retailers insight into what will be sought out later in the season as well. Retailers who use real-time data to inform how they stock and sell items will be the most successful during this turbulent holiday season.
What it means for businesses
Adaptability is always a plus, and so is working with whatever information you can gather. It's more important than ever to have a finger on the pulse of demand this season and compare it to sales events like Black Friday to stay ahead of the curve.
Why Black Friday 2021 is tricky to predict
As restrictions ease and "real life" slowly returns, Black Friday 2021 isn’t any easier to forecast than 2020. For one, the retail landscape is shifting toward a hybrid of online and in-store purchases, especially amid the thousands of store shutdowns and the rise in online shopping. The aforementioned supply chain and hiring challenges will also affect product availability.
The needs and priorities of consumers have also changed from previous years. Some buyers have been hit by job loss and reduced incomes; others may prefer to be cautious and build up their savings in the event of another lockdown. Finally, with Christmas 2020 being a non-event, Christmas 2021 is more critical than ever. Research by Future plc shows that 55% of consumers plan to make Christmas their biggest celebration, suggesting that they may focus their spending then rather than on Black Friday.
As we all continue to navigate this new normal, businesses should keep in mind that we're really all in the same boat. Let your customers know you care about them, not just their money. After all, a satisfied customer who feels valued is more likely to remain loyal to a business, through good times and bad.
Zaheer Dodhia contributed to the writing and reporting in this article.