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August 06, 2021

Holiday Ecommerce—How to Prepare for 2021

Brian Dearth
Brian Dearth
Head of Strategy and Growth
holiday-ecommerce-how-to-prepare-2021

The holiday season of 2021 will be unlike any other. While people can't wait to return to traditions, Covid-19 has irreversibly changed how people search for and buy things. Brands will be challenged to capture the pent-up demand for the old way of doing things while also adapting to consumers' new habits and expectations.

Making predictions for the post-pandemic world is, of course, difficult. But there are some lessons learned in 2020 that will help you plan for this year's holiday shopping season—both online and in-store. In this article, we'll take a closer look at 10 essential areas to focus on in 2021 to capture sales and deliver exceptional customer experiences during the most wonderful time of the year! 

Related reading: Building A Seasonal Command Center

Holiday Ecommerce in 2020: A Retrospective

Before we move on to talking about the future, let's take a brief look at the past. 2020 was a unique year in many ways, and naturally, this had repercussions from a commercial perspective. So, what happened?

Well, in 2020, total retail spending went up 6.5% to $1.064 trillion. And while brick-and-mortar sales grew very little, by only 2.2% to $878.26 billion, ecommerce jumped a staggering 32.5% to $185.88 billion.  Nearly 1 out of 5 holiday purchases were made online last year, representing a significant shift in shopping behavior. 

Cyber Monday was the most intense online spending day in history, as spending rose 15.6% to $10.78 billion. Black Friday sales also increased notably by 22.0% to $8.92 billion, and Thanksgiving Day sales went up by 21.4% to $5.02 billion.

Holiday Ecommerce in 2021: A Forecast

So, what is the forecast for holiday sales in 2021? As the pandemic has affected all aspects of society in different ways, it's, of course, hard to tell. There is no precedent, but there are still some forecasts being made.  

eMarketer expects 2021 holiday retail sales to go up by 2.7% to $1.093 trillion, while brick-and-mortar sales are only expected to rise 0.9% to $885.99 billion. And ecommerce is predicted to climb 11.3% to $206.88 billion. They also expect Cyber Monday and Black Friday to hit new levels and surpass $10 billion in ecommerce sales.

In other words, even in the post-pandemic and somewhat unpredictable situation we're in, there will be some serious Holiday ecommerce spending going on. So what can you do to come out on top this season? 

Let's look at some of the changes in buying behavior that we've seen during the past year that are most likely to stick and impact the landscape of online sales. And let's examine what aspects of shopping may return to pre-pandemic levels.

Post-Pandemic Holiday Ecommerce Predictions

A Return to the True Black Friday Shopping Experience

In 2013, retail stores began opening on Thanksgiving Day. Once store openings hit critical mass, Black Friday shoppers started heading to stores on Thursday night, instead of Black Friday. But the pandemic forced almost universal closures in 2020, not only on Thanksgiving, but all the time, which led to a massive shift in consumer retail commerce behavior—return to “the true Black Friday shopping experience”.

UPS and FedEx played an essential part in the rise of online shopping during the pandemic, but that trend may have peaked as consumers return to in-store retail commerce. According to UPS, the average daily package volume in the U.S. fell 2.9% in the second quarter of 2021, compared to last year. And international package volume fell 0.8% from a year earlier, indicating that people may have missed the physical shopping experience and are ready to go back to brick-and-mortar stores.  Merchants need to consider if this data point is an indicator for holiday shopping.

A Strong Demand for Contactless Digital Retail Options

Covid-19 has accelerated the shift to electronic payments, and to stay ahead, merchants must keep pace with customers' expectations and understand the evolution of online and in-store payment trends. A Mastercard report found that the shift to electronic payments accelerated in the U.S., even in stores, Covid-19 accelerated the transition to digital, and consumers want to continue that move from "touching greenbacks" to entirely touch-free payments options. 

A Need For Improved Product Availability

Product availability was one of the first customer experience issues that arose as people shifted to ecommerce due to Covid-19. Or rather, the lack thereof. Online merchants hadn't foreseen the quick rise in demand, and shoppers found many essential items out of stock online.

It is a common frustration when items appear in stock on a merchants' websites but are not there. It's a poor shopping experience when products show up as out of stock at checkout or when customers can only discover an item is out of stock by placing an order. 

In April 2020, 72% of consumers stated they were "much more" aware of product availability than before the pandemic. Managing this issue is key in providing a satisfying shopping experience and building lasting customer relationships—especially during the intense period of the holiday season.


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A Strong Demand for Buy Now Pay Later (BNPL) Options

As recession was one of the results of the pandemic, the way consumers want to manage their money has changed significantly. The number of people who prefer "buy now, pay later" (BNPL) options when shopping online has increased by 215% from early 2020 to early 2021

Last year, 40% of millennials said that they use the BNPL option. Providing BNPL checkout services will likely be a strong competitive differentiator moving forward, especially in the holiday season, when peoples' budgets are already strained. 

An Increase in Curbside Pickups

According to a 2021 U.S. Survey, 6 in 10 shoppers have used curbside pickup during the pandemic. 80% of those respondents stated having done so in response to the pandemic. But what's even more interesting is that 75% of consumers surveyed intend to continue with this delivery option when the pandemic is over.

Related reading: How Digital Commerce Changed Consumer Behavior In 2020

A Stronger Focus on Omnichannel and the Buying Experience

This holiday season, more than ever, retailers need to execute the basics of a good and personalized retail ecommerce experience. This means taking another look at product detail pages and checkout flows, making sure every little piece of the puzzle is perfectly optimized. But most importantly, it means offering shoppers a variety of ways to connect with your brand, such as live chat and virtual appointments, as well as opportunities to connect post-purchase.

Also, don't forget to look at the post-purchase experience. This is where you have a chance to turn the buyer into a recurring customer. Make delivery tracking super easy at each step. Be certain your emails or notifications are clear and concise. You simply cannot communicate too much about the status of that package!

Offer Quick Shipping and Multiple Delivery Options 

In Holiday ecommerce, time is of the essence. We all know how frustrating it is to find that perfect gift, only to receive it… after Christmas. 68% of consumers state that fast shipping will lead them to place an online order, according to a 2021 Digital Commerce 360/Bizrate Insights survey. And the definition of "fast" keeps getting faster, with same-day delivery as the latest consumer expectation to match. The bottom line here, offer as many delivery windows as you can and manage those expectations.

Stock Up On Gift Cards

This was a tip from last year's post, and we received many comments on this one. One retailer actually reported "stocking out" of physical gift cards!? According to EMR, the global gift card market reached $719b in 2020 and is expected to grow by 16.20% through 2026. The demand for gift cards keeps increasing as the shift to online shopping accelerates, and in a world of overwhelming choices, gift cards are fast becoming a consumer favorite for both personal and corporate gift giving.

Prepare for Fraud

Fraud is always on the minds of ecommerce merchants. But when the gift-giving season hits, preparation for fraud becomes even more critical. Some primary areas to focus on include:

  • Web application attacks: when someone can gain access to databases with vulnerable data such as customer information
  • Exploitation of lost or stolen assets: when someone steals sensitive information from customers, such as credit card numbers, software vulnerability, and use of stolen credentials
  • Return fraud: when a shopper claims they did not receive a product and asks for a refund or abuses a retailer's policy by purchasing a product, using it, and returning it to receive a refund

Make Sure to Put Data Privacy Front and Center

Whether you like it or not: consumers today do care strongly about data privacy. A global survey by FleishmanHillard found that 68% of shoppers expect companies to have data protection practices beyond the regulatory minimum in place, and 56% are less likely to shop from companies (online or in-store) that use personal data for company benefit. 

How Vaimo Can Help

Hopefully, you will find these focus areas helpful as you plan your ecommerce strategy and sales activities for this year's Holiday season. And if it feels a bit overwhelming, that's perfectly understandable! And we're happy to help you.

At Vaimo, we're global experts in digital commerce strategy, design and development services, and a full-service omnichannel partner. We work with brands, retailers, and manufacturers across the U.S., EMEA, and APAC. Get in touch – we would love to help you prepare for the Holiday ecommerce season 2021.Learn More >