The Pandemic Effect on Holiday Shopping in 2020 – Investopedia
The holiday shopping season is normally a busy one for retailers, restaurants, and other merchants. For 2020 the average shopper plans to spend $998 on holiday purchases, according to the National Retail Federation (NRF). However, this year’s holiday shopping season probably won’t look like those of the past. The coronavirus pandemic is reshaping the way people shop and spend for the holiday season in more ways than one.
- The average American plans to spend just under $1,000 on the holidays this year.
- Online shopping is set to take precedence over in-store shopping as consumers observe social distancing measures.
- Black Friday continues to be the most popular day for holiday shopping, followed by Amazon Prime Day and Cyber Monday.
- Small Business Saturday may be a highlight of this year’s holiday shopping season, as consumers seek to help small businesses affected by COVID-19.
How Holiday Spending Adds Up
Consumers still plan to spend money over the holidays this year, despite financial setbacks related to the COVID-19 pandemic. A PwC survey found that nearly 40% of consumers expect to spend the same amount as they did last year, while 11% actually plan to spend more. Of the nearly $1,000 on average they plan to spend, according to the NRF, the majority of that is budgeted toward buying gifts.
Gift card purchases are also expected to get a boost this year. According to the NRF, consumers are expected to spend $27.5 billion on buying gift cards, either for themselves or to give to others over the holidays.
Travel spending, on the other hand, may see a slowdown over the holiday season as government and health agencies caution people to avoid gatherings. One in five holiday shoppers who typically travel through November and December said they plan to stay home this year. And more than half of them, 53%, said they’re more likely to use the money they would have spent on travel to pay for gifts, decorations, and other holiday purchases.
If you’re booking holiday travel, check your airline’s and hotel’s cancellation policies in case your plans are derailed by the COVID-19 pandemic.
Online Shopping Expected to Increase
In terms of the biggest trends for holiday shopping this year, the focus is less on buying “hot” items and more on maintaining health and safety while shopping.
In a DealAid.org survey, 90% of consumers said they’ve spent more time shopping online since the COVID-19 pandemic first began. While 87% of consumers shopped in a store for the holidays last year, just 60% of consumers say they plan to do so this year.
That’s a decline of 27%, but DealAid.org also found that when asked directly 31% of those surveyed said they expected to avoid in-store shopping in 2020 as compared with 2019. On average, consumers plan to spend nearly $100 more shopping online in 2020. Overall, 97% of consumers surveyed by DealAid.org said they’d do at least some of their holiday shopping online.
Retail Dive reported that, according to Adobe Analytics, online sales reached $9 billion on Black Friday 2020, 21.6% ahead of 2019. Salesforce tracked them at 12.8 billion and 23% growth.
Curbside pickup and order online with in-store pickup are also things holiday shoppers are interested in this year. In the PwC survey, 55% of millennials said they’d use curbside pickup for their holiday purchases, while 52% said they plan to order items online and pick them up at the store. Not surprisingly, curbside pickup rose 52% over last year, Adobe Analytics reported, with retailers providing it harvesting a 31% rate of traffic conversions to their online sites. The salesforce conversion number reported was 19%.
If you’re shopping online for the holidays, mark Dec. 14 on your calendar. It’s national Free Shipping Day at participating retailers.
Small Business Saturday Could Be a Boon for Local Businesses
The most popular day to shop, according to a McKinsey & Company survey, is Black Friday, with Amazon Prime Day coming in a close second. Cyber Monday takes the third-place spot for the most popular holiday shopping day. However, there’s another annual holiday shopping event that could be particularly important this year. It’s called Small Business Saturday, and it occurs every year on the Saturday between Black Friday and Cyber Monday. American Express created Small Business Saturday in 2010 to cast a spotlight on small, locally owned businesses. This year it is scheduled for Nov. 28.
To date consumers have spent more than $120 billion on Small Business Saturday, with nearly $20 billion of that spent in 2019 alone. Small Business Saturday takes on new importance for 2020 as many small business owners struggle with the economic impacts of COVID-19.
According to American Express, 62% of small businesses reported a need to see consumer spending return to pre–COVID-19 levels by the end of 2020 in order for them to be able to remain in business. According to the Associated Press, a survey conducted by Amex found that 88% of consumers say they’re committed to spending at small businesses this year to offset some of the financial effects of the pandemic.
Use the Shop Small map located on the American Express website to find small businesses that you can support on Small Business Saturday and all year long.
How to Prepare for This Year’s Holiday Shopping Season
If you plan to spend over the holidays, it’s important to consider how the COVID-19 pandemic might affect your shopping plans. First, check your budget to see how much money you can commit to holiday spending this year and how much you spent last year. If your income has been affected by the pandemic, you may not be able to spend as much as you did in previous years. Having in mind a firm number you can afford to spend can help you avoid accumulating debt to pay for the holidays.
Next, consider your preferred method for shopping. With social distancing guidelines in place, it may be more practical to stick with online shopping for most or all of your holiday needs. If you’re shopping online, keep these tips in mind:
- Compare prices at different websites before making a purchase
- Look for free shipping promotions to save money
- Check online deal sites for promo codes or discounts you could apply to purchases
- Check the retailer’s return policy in case you need to send something back
If the item you want to purchase doesn’t offer free shipping, opt for curbside or in-store pickup if that’s available. That can save you money on shipping fees and keep the amount of time you need to spend in stores over the holidays to a minimum.
Also, consider the timing if you’re making holiday purchases online. Standard shipping times could be delayed due to the pandemic, so you may need to give yourself a longer window for ordering and receiving items. Alternately, you may need to leave extra room in your holiday budget to pay for rush shipping fees if necessary, so an item can be delivered on time.
Be prepared for some items to be out of stock or unavailable altogether, as supply chain logistics issues could cause shortages.
Finally, consider how you plan to make holiday purchases, especially if you’re shopping online. Paying with a credit card can offer more fraud protection if your card details are stolen by holiday scammers. Nevertheless, be sure that you have a plan for paying off your credit cards after the holidays to avoid getting stuck with high-interest debt.
Published at Mon, 30 Nov 2020 16:50:06 +0000