Adaptation is the Name of the Retail Game This Holiday Season
The peak of the holiday shopping season is upon us, and in a year of uncertainty, retail executives have needed to rethink priorities and strengthen their resilience against unknown challenges ahead.
According to our Road to Election survey, 35 percent of business leaders said the nation’s pandemic response creates new risks for their organizations. Furthermore, we're seeing more retailers preparing for the known risks by investing in digital tools to support the health and safety of their customers.
This is critical in a year when more than half of consumers are confronting pandemic-altered income levels, which is impacting their holiday spending. What can retailers do? Adapt.
Black Friday Isn't Dead — It’s Just Evolving
Given many retailers closed on Thanksgiving, we didn't see the typical crowds of shoppers lining up outside their favorite stores, waiting for midnight to strike to rush inside. And while a 10,000 foot view of Black Friday 2020 might appear more subdued than in previous years, our research shows a strong proportion of Black Friday loyalists are planning to start (22 percent) and complete (23 percent) their holiday shopping that week.
For those shopping during Black Friday week, 36 percent will do the bulk of their shopping on Black Friday — only a 4 percent decrease compared to 2019. One notable difference, however, is that 37 percent of sales will happen online this year, compared to a projected 18 percent of in-person sales.
Over the course of the holiday shopping season, we’ve seen retailers take initiative when it comes to shopper safety and expand “Black Friday” sales across the entire season. Walmart, for example, offered Black Friday sales on three separate Fridays in November, while Target and Best Buy kicked off holiday promotions in conjunction with Amazon.com's Prime Day in October. However, with many consumers still shopping on Black Friday, brands and retailers will continue to promote Black Friday specials this year.
Use Digital Tech to Address In-Store Shopping Concerns
Another critical way retailers are adapting this season is by doubling down on the digital tools consumers want and expect of their holiday shopping experience. Luckily, many consumer-facing companies are actually ahead of other sectors in terms of digital transformation investments. This bodes well for those brands this holiday season.
The most popular shopping method this holiday season will be online (61 percent vs. 54 percent in 2019). And with increased online demand, many retailers have operationalized curbside pickup — a practice that has increased in popularity among consumers by 12 percent year-over-year. In addition to fulfilling customer orders in a timely fashion, curbside pickup has also helped shoppers save on shipping costs while minimizing risk of exposure. Younger shoppers, accustomed to navigating online orders via apps or websites, are more likely (49 percent) to embrace curbside pickup than shoppers over age 39.
For those who prefer to shop in-store, contactless payment options keep human contact at a minimum while maintaining the personalization and speed (no shipping delays!) of an in-person shopping experience.
These digital investments do more than keep shoppers safe. They show consumers that these companies care, breeding trust that bolsters brand loyalty through this uncertain time.
Protecting Consumers Online and Off
COVID-19 isn’t the only thing shoppers need to be protected from. There’s little doubt cyber criminals have taken note of the 60 percent of consumers who plan to complete their shopping online this year.
While 71 percent of consumers overall are confident their online transactions are secure, less than half (49 percent) of Gen Z consumers trust retailers with their data. In order for brands to foster trust with a new generation of shoppers, they need to think proactively about data privacy policies and cybersecurity.
Adopting a strong cyber infrastructure before threat actors encroach on vulnerable shoppers is a worthwhile investment for retailers when it comes to protecting customers and earning their trust this holiday shopping season — and it’s certainly more cost effective than a data breach.
Evolve, With an Emphasis on Trust
COVID-19 has impacted nearly every industry globally and retail is no different. In fact, it’s clear that retailers are committed to making the holiday season a success, albeit with some alterations. Shifts in timelines for Black Friday and other sales events allow retailers to get their usual boost in sales while maintaining crowd control and avoiding a superspreader event. New digital adaptations give consumers a variety of safe options for getting their holiday gifts. And adopting a sound cybersecurity infrastructure helps retailers maintain customer trust by keeping their data safe.
If retailers are up to the task, they’ll find customers who are more loyal than ever.
Tyson Cornell is U.S. Consumer Markets Leader at PwC.