The 2020 holiday shopping season was already looking shaky, but now is starting to appear downright bleak.
With COVID-19 cases surging and the return of lockdowns, in-store holiday shopping is limited. There’s even a cloud over holiday e-commerce as the pandemic continues to take its toll on the economy, leaving more people out of work and worried about paying for essentials, let alone gifts.
2020 holiday shopping season: Anything but predictable
After months of life turned upside down during the pandemic, we knew the holidays would be strange. Who would want to rush into crowded stores on Black Friday to jostle for deals? Would families even be able to spend the holidays together?
Earlier this fall, forecasts for holiday spending this year were mixed, with muted in-store sales but robust e-commerce sales.
Retailers started their holiday promotions early, foregoing Black Friday. Amazon jumpstarted things by scheduling its annual Prime Day blockbuster sale for October.
There are three primary areas affecting the 2020 holiday shopping season:
- Financial concerns: As COVID-19 surges, lockdowns rise, and job security falters, worries grow.
- Most of those who are shopping plan to shift nearly fully online.
- With so many packages being shipped, will those packages arrive on time?
Consumers appeared ready to get their holiday shopping done early as retail sales grew. In fact, the National Retail Federation cheered a 10.6% increase in October retail sales compared to October 2019.
But other data isn’t so rosy.
Financial concerns dampen 2020 holiday shopping
One in three US consumers plan to decrease their overall spending until the end of the year while one in four say they’ll spend less on holiday shopping this year than in 2019, according to a survey of 1,000 Americans by Jungle Scout.
Without additional stimulus money from the government, 23% of those surveyed plan to reduce their 2020 holiday spending, the survey also found. Sixty-one percent of Americans are worried about their financial situation, up from 56% in May.
The expiration of stimulus funding and continued unemployment has a lot of people worried, and likely less inclined to spend on anything but food and medicine.
Even though the unemployment rate has fallen, the number of people unemployed for at least six months is quickly rising. And now, more people will either be joining or returning to the joblessness ranks with the re-institution of crowd controls on restaurants, stores and other establishments.
Financial concerns are mounting worldwide. Deloitte surveyed 1,000 consumers in 18 countries and found that 29% of all respondents said they were struggling to make upcoming payments. Among adults ages 18 to 34, the number surged to 46%.
Thirty-nine percent of American under the age of 54 said they’re worried about their credit card balances and 42% are concerned about their savings, according to Deloitte’s Global State of the Consumer Tracker.
Holiday shoppers sticking with online stores
Those who have money to spend on holiday gifts will be spending much of it online, continuing the e-commerce surge that began earlier this year with the onset of the pandemic.
Deloitte’s 2020 holiday retail spending forecast predicts tepid sales overall in the US, but that e-commerce sales will jump 25% to 35% year-over-year.
Sixty-nine percent of consumers polled by Jungle Scout said they plan to shop on the traditional big holiday shopping day – Black Friday – but most will do that online instead of in physical stores.
In its consumer survey, conducted Oct. 29-Nov. 5, Deloitte found that 61% felt safe going to a physical store, up from 30% in April.
That would be hopeful for brick-and-mortar retail, but COVID-19 cases and hospitalizations have spiked since then, so safety fears of being in public are likely to return.
Looming delivery issues: Will holiday gifts arrive in time?
As if there’s not enough to worry about this holiday season, there’s also the risk that the gifts you order will be delayed.
Retailers and shipping companies are scrambling to prepare for a spike in online holiday shopping and experts anticipate shipping delays, according to an Associated Press report.
Many merchants, including Amazon, are advising consumers to order early to avoid late arrivals.
Retailers are also increasing availability of buy online pick-up in store (BOPIS) to reduce shipping pressure.
Contactless shopping options like BOPIS have taken off this year for obvious reasons. Deloitte’s consumer poll found that consumers view BOPIS as cheaper than traditional delivery (36%), faster than shopping in a store (34%), and safer (32%).