2021 E-Commerce Holiday Shopping Predictions & Trends

2021 E-Commerce Holiday Shopping Predictions & Trends to Watch

The holiday season is soon approaching and this marks the beginning of the peak season for retailers. Having gone through almost 2 years amid a pandemic, the retail landscape has evolved tremendously. Many new trends have emerged, and new consumer habits formed. 

With peak season last year being a record-breaking one for many, what can retailers look for during this year’s peak season? With vaccination rollouts, are there any new trends that retailers should know about before entering this peak season? Check out a list of trends below that we think will emerge this holiday season. 

1. High Demand, Low Supply, Increased Prices

This holiday’s retail sales are expected to increase by 7-9% according to Deloitte’s annual holiday retail forecast. Having missed out on the regular celebrations last year, many seem to be ready for an expensive revenge holiday season

While retailers would have no issues with getting customers to shop, they might face another challenge in filling their shelves. Larger retailers such as Walmart, Home Depot, and Ikea resorted to chartering their own ships, while others opted for the higher-priced air freight to ensure their goods can be delivered on time. 

The increased shipping cost and scarcity of products may in turn lead to higher prices for consumers. Hasbro, for instance, has increased its prices to make up for the rising freight costs.

2. Pushing early holiday deals 

As the saying goes: once bitten, twice shy. Concerns surrounding the supply chain crisis and shipping delays have weighed on consumers’ minds since the beginning of the pandemic, driving them to start holiday shopping earlier. According to ICSC’s Annual Holiday Shopping Intentions Survey, 75% of shoppers are planning to shop earlier this year. 

We have seen this trend emerge since 2020 with an 8% rise in holiday spending as early as November compared to 2019. However, we might be seeing an even earlier rise this year. 8 in 10 shoppers claimed that they would shop earlier if brands started to offer promotions before Black Friday.

3. Pop-up Stores & Pop-up Fulfillment Centres

To make shopping more accessible for consumers, many retailers have launched pop-up stores during the holiday season as temporary storefronts. An example that Target did in 2019 was a Christmas pop-up that allowed shoppers to touch and feel the products and place orders online through their devices, connecting the physical and online experience. As vaccination rates continue to increase around the world, we might see retailers returning to pop-up stores to boost holiday sales this year. 

In addition to physical pop-up retail stores, high volumes of e-commerce orders have led big retailers to create pop-up distribution centers to fulfill deliveries. For example, we saw Walmart opening these fulfillment centers last year across their 42 existing regional distribution centers.  

4. Buy Online, Pick-up In-Store (BOPIS), and Collection Points

With ongoing labor shortages to fulfill the peak shopping demand, BOPIS and collection points are retailer must-haves. This reduces the stress put on logistics partners to fulfill individual deliveries and allows orders to reach customers efficiently and at their convenience during the busy period. 

In peak season 2020, 53% of shoppers opted for BOPIS or curbside pickup for their orders. The click-and-collect retail sales amounted to US$ 58.52 billion in 2020 alone, and this number is forecasted to reach US$ 74.24 billion in 2022. 

5. Increased foot traffic at physical retail stores

Bain’s 2021 Holiday Shopping Outlook projected in-store sales will grow at a 5% rate this year, whereas e-commerce sales will grow at 2%. More people are looking to shop in-store this holiday season. 

With the challenges in the supply chain, retailers should make early preparations for the spike in demand. When the peak season comes, retailers should be ready with enough manpower and goods to serve their customers.

Omnichannel Retail Strategy is Key

Despite the uncertainties brought about by the pandemic, there is one thing we can be sure of: shopping behaviors will continue to change. Retailers should be ready to adapt to new trends, changing circumstances, to ultimately deliver a great shopping experience to their customers. The common thread among the trends we have highlighted above is the need for a strategy that combines the physical, and digital aspects of shopping, i.e. having an omnichannel strategy. We believe that the most successful retailers this peak season will be the ones who are able to enable customers to have a frictionless experience regardless of which channel they may choose to shop from. 

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