Forecasts Point to a Strong Holiday Season, But Shopper Behavior Will Be Anything But Typical
Retailers and brands are expecting strong consumer demand this holiday season, with major forecasts predicting a 7 percent to 9 percent increase in sales. Even with prices continuing to rise due to higher materials, labor, shipping and marketing costs, consumers seem unfazed and set to celebrate and spend. However, shoppers’ shifting behaviors and ongoing supply chain challenges mean that this holiday season will look different than anything the retail industry has seen in the past.
This week, Steve Sadove moderated our Retail Influencer Network Insights call, which focused on the holiday 2021 outlook. The discussion featured insights from special guests Deborah Weinswig, CEO of Coresight Research; Greg Petro, CEO of First Insight; Neha Singh, founder and CEO of Obsess; and Sarah Willersdorf, partner and managing director of Boston Consulting Group.
Here are some of the ways this holiday shopping season will differ from any we’ve seen in the past:
- The holiday shopping season started before back-to-school in some places. Black Friday’s status as the official holiday shopping kickoff has been weakening for years, but this year, consumers began shopping earlier than ever, some even in August. Brands will have to adjust their holiday promotional calendars accordingly to meet consumers’ earlier timelines as well as to mitigate the inventory shortages and shipping delays the industry is facing this year.
- Gaming platforms will become the new malls. Videogame platforms like Roblox and Zepeto have massive user communities that not only play, but socialize and shop on the platforms, an experience much like previous generations of younger consumers had at the mall. This holiday season, gamers will be able to buy real and virtual products from brands like Ralph Lauren, Gucci, and Vans, which are offering innovative in-game experiences designed to drive engagement and loyalty.
- Consumers aren’t shopping for holiday promotions. The child tax credit and pandemic savings have consumers feeling financially confident and many are willing to pay more than ever before for holiday gifts and goods, without needing to be enticed by promotions or discounts.
- Empty shelves could leave consumers cold. COVID-19 is still disrupting supply chains, causing shortages that are driving up costs and making it impossible for retailers and brands to know if they’ll be able to keep shelves stocked this holiday season. Those that can’t stock in-demand items face the risk of frustrated consumers who will look elsewhere for what they need. Some of the biggest names in retail are heading into the fourth quarter with more confidence because they started strengthening their supply chains and stocking up on holiday inventory back in the first quarter.
- Luxury and jewelry gifts may be more popular than apparel this holiday season. This summer, luxury sales were up 50 percent over their pre-pandemic levels, while jewelry sales were up 60 percent. Although that strong growth may slow a bit as we head into the holidays, these two categories may still bump apparel off its pedestal as the most popular holiday gifting category, especially given consumers’ healthy finances this year.
- Holiday travel trends will include longer trips and bigger budgets. With so many consumers still stuck working at home, expect to see high demand for big trips that offer an opportunity to escape in luxury this holiday season. Travelers are spending more on longer trips and VIP accommodations this fall, and those trends show no signs of slowing.
Stacy Berns is the founder and president of Berns Communications Group (BCG), which connects the worlds of retail and technology globally, bringing to market new retail fashion trends and technologies that are shaping the way consumers shop today.
Stacy Berns, as the founder and president of Berns Communications Group (BCG), connects the worlds of retail and technology globally, bringing to market new retail fashion trends and technologies that are shaping the way consumers shop today. Founded in 2002, BCG is uniquely positioned to connect these sectors by leveraging its relationships with CEOs, media and its Retail Influencer Network, a select group of retail and fashion insiders that includes some of the most powerful voices in the industry. Stacy is also one of the Co-Founders of DealmakeHers, an exclusive network of leading female dealmakers in the retail and consumer spaces. Stacy is passionate about and committed to mentoring and empowering executive women by creating events and platforms that support networking and education. She also serves as a board member of Delivering Good, a nonprofit dedicated to providing new merchandise to people around the world impacted by poverty and tragedy.