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Digital Marketing Acceleration

Digital Marketing Insights for The Holidays

Rethinking Digital Marketing for The Pandemic Holiday Season

Retailers depend on a strong holiday shopping season to hit their annual sales targets and drive growth. But like most things in 2020, the outlook is uncertain. As businesses and consumers alike contend with the impact of the coronavirus pandemic, the most wonderful shopping season of the year is proving dramatically different.

While that isn’t surprising anyone, it’s worth taking a close look at where, exactly, we’re seeing the biggest shifts happen this year. Getting a handle on consumer behavior now can help you plan for what’s next during the coronavirus pandemic and beyond into 2021.

Keep reading to dial into key holiday spending insights for 2020 and what they mean for your digital marketing strategy going forward.

Top holiday spending trends for 2020

The pandemic has changed holiday consumer behavior in noticeable ways for businesses big and small, including these key trends.

Holiday shopping started earlier

Ramping up in November and continuing past Christmas, the holiday season traditionally drives two major spending increases: Black Friday, when gift purchasing spikes, and post-Christmas, when shoppers look to swap, upgrade and add onto holiday gifts and purchases.

Our Digital team has noticed specific trends in their own data - purchasing tends to increase between 16% to 26% during the week of Cyber Monday and between 5% to 20% after New Year’s.

But with the impact of the coronavirus, the timing of holiday spending in 2020 has shifted. This year, holiday purchasing ramped up earlier than ever, driven by retailers flooding the market with a higher frequency and volume of promotions and sales. The rush started in mid-October, as companies launched into early Black Friday sales and sought to create holiday moments beyond Amazon Prime Day on October 13 and 14.

E-commerce is exploding

According to the Deloitte Annual Holiday Retail Forecast, e-commerce holiday sales are expected to skyrocket by 25-35% in 2020, compared to 14.7% in 2019. And Amex reports that 41% of merchants have adopted or plan to adopt a new e-commerce solution as a result of the coronavirus pandemic. The focus on online shopping makes sense during COVID-19, as consumers opt to shop safely from home and retailers look to capitalize on those habits. To stay competitive, retailers are investing in the digital experience through mobile apps, simple online payments, chatbots and tailored recommendations.

Contactless payments have accelerated

The way consumers pay reflects trends that were already happening in the payments sphere and that have only accelerated due to the pandemic.

Most noticeable is the rise in contactless payments, with 58% of consumers more likely to choose contactless methods including pre-ordering, mobile apps and digital wallets. 73% of merchants surveyed by Amex also agree that, since the COVID-19 outbreak, they prefer customers pay with a card or app instead of cash.

Some shoppers may actually spend more on gifts

Although the pandemic has resulted in tight finances for many households, some consumers are actually planning to spend more on gift-giving in 2020. 66% of consumers say they will spend the same amount of money or more, a trend that some analysts are attributing to a shift in discretionary spending, along with a desire for normalcy and tradition. Rather than purchasing vacations, spending is focused on more or pricier gifts. Gift giving in the categories of fitness, wellness, subscription services, electronics and home furnishings are all on the rise, in line with consumers’ home-based lifestyles in 2020.

Small businesses aren’t getting left behind

The pandemic has opened up the conversation around consumers’ purchasing power when it comes to supporting small business.

In 2020, 75% of Americans say they feel compelled to purchase from small businesses as a result of the pandemic.

The fact that small merchants are adopting e-commerce is helping bolster this trend and diversify where consumer dollars go. Larger organizations are also helping with initiatives such as Small Business Saturday and Visa’s recent campaign in support of small business.

Impact on digital marketing

In 2020, marketers have had to rethink the traditional playbook over and over again in response to the pandemic and its impacts on consumer behavior. Through it all, digital has taken center stage – a reality that is especially true during this year’s holiday spending. When it comes to digital marketing campaigns, here are some impacts we expect will continue into 2021.

Pivoting as you go

There’s more uncertainty than ever around consumer habits, which means brands’ traditional understanding of their target audiences is out the window. In that context, a smart approach is to think about all campaigns as tests. Closely tracking initial performance of every campaign prepares you to pivot quickly if you start seeing poor results. 

Adjusting timing and cadence

With retailers advertising holiday sales beginning in early to mid-October, digital ad spend this year is being distributed over a longer holiday season. Whether or not that trend will persist into 2021 may depend on the state of the pandemic a year from now.

In 2020, retailers are contending with higher volumes of online sales and increased shipping demands, which is part of the reason brands started promoting earlier holiday shopping.

However, many consumers will likely stick to e-commerce even once in-store shopping is safe again, suggesting that the extended holiday season could be here to stay. In 2021, marketers may need to adjust their promotional cadence to start early once again.

Pragmatic messaging resonates

When it comes to messaging through the pandemic, great deals and strong safety precautions continue to win the day, along with convenient delivery and return policies, according to Deloitte. Giving shoppers the option of a safe experience in-store and an equally pleasant journey online is helping retailers come out on top. Promotions that communicate messages of ease, consistency and concern for customer safety have all proven successful.

Power of email marketing

During the 2020 holiday season, large retailers and political campaigns have driven up the cost of digital advertising. Reaching online customers is more competitive and expensive than ever. As consumers are increasingly bombarded by ads, brands are taking advantage of email marketing as an effective way to reach their audiences with targeted digital messages, allowing them to nurture existing customer relationships, see almost immediate performance feedback and adjust their strategies on the fly.

Overall, as we look to the year ahead, marketers won’t be able to rely on habit or traditional ways of doing things. While shifts that have been in the making for years, such as e-commerce, contactless payments and exceptional digital CX, will continue to accelerate, we’ll also need to get comfortable with a degree of uncertainty. 

If 2020 has taught us anything, it’s that we can’t expect the world to be the same as it was last year. Our best hope is to absorb the insights we’ve gained and use that learning to inform our strategic decisions about what comes next. 

 


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