We all know that Christmas 2020 was an anomaly for, well pretty much everything, but particularly for retail and online sales. In our recent series, Evolution x Spark Talks, we partnered with Megan Reynolds, Associate Director at our sister agency, Spark Market Research, to take a deep dive into the current changes in consumer behaviours and how this has affected the way we’re planning to shop ahead of Christmas.
Listen to the full discussion below.
Here, Polly Woodvine, Group Account Director at Evolution, reveals just how the pandemic has hit the high street whilst simultaneously boosting e-commerce sales. But, will 2021 match last year’s unprecedented online growth?
Unsurprisingly, e-commerce sales soared during the peak season of 2020, partly due to necessity and partly due to convenience. As such, we saw 71% of Christmas presents being bought online compared with 55% the year prior (PWC survey results).
This year, 2021, it is predicted that 64% of sales will remain online. Plus, what’s interesting is that the new wave of online shoppers defy the demographic of those traditionally associated with avoiding the web: 58% of over 55s and 70% of 45 – 55 year olds will be shopping digitally.
How has the pandemic changed shopping behaviours?
One thing we can be certain of is that consumers are keen to get back in the stores and feel that Christmas shopping experience. Supply chain issues exacerbated by the pandemic and Brexit have created an urgency to purchase presents sooner; eBay reported that 25% of UK shoppers will have thought about (and have searched for) Christmas gifts before the end of August.
eBay reported that 25% of UK shoppers will have thought about (and have searched for) Christmas gifts before the end of August.
People still feel cheated from last year’s festivities and 27% wanted to start planning Christmas much earlier with 41% saying they will finish all Christmas shopping before December starts (something I aim for every year but never quite achieve!).
Thankfully for retailers, the sentiment to spend, and to spend more, is strong, with the majority of people feeling better off having saved during lockdowns. What’s more, 24% of people will spend more on Christmas this year with those in London and the Midlands being the most confident.
Strengthening our economy, there was a 7.3% rise in earnings from March to May this year (YOY) and from June to May we saw the number of jobs rise by 365,000 [Reuters].
With Christmas parties resuming, the sales of clothes are set to increase by 10.7%, and health and beauty will rise by 6.1% YOY. More importantly, because we will (hopefully) all be with our families this festive season, toy sales are expected to increase by 5.1% and food sales are set to soar [GLG Online Survey].
Specifically for online, click and collect will continue to grow and is predicted to make up 13.9% of all online sales this year [Global Data]. From payments to deliveries, shoppers are requesting greater flexibility and convenience when buying online. This is reflected in the data; the top four factors influencing online purchases for Christmas 2021 are: free delivery (49%); promotions (36%); easy-to-use website and app (21%); click and collect (20%).
How have retailers reacted?
The high street has reacted by offering a more consolidated service. For example, Next thrived during lockdown by using their stores as distribution and returns centres for themselves and Amazon – giving customers another reason to go into store and thus increasing footfall.
Asda has teamed up with B&Q to diversify their range to the DIYers and Waitrose now has John Lewis outlets in store to offer Home products during your weekly shop. We are all cautious of how many stores we are visiting and how many germs we are picking up, so shoppers are favouring a one-stop shop.
This year’s shoppers are also looking for a great experience, in part to make up for the deficit of socialising. Being able to run a few errands helps busy families, but something to entertain the kids or somewhere you can meet a friend for a drink adds another convenient dimension. One of the greatest success stories from last year’s lockdown comes in the form of farm shops. They capitalised on the restrictions by offering a fun day out for the family as well as shopping.
E-commerce stores can add value by offering online exclusives, personalised discounts, click and collect and gift-wrapping services. Free delivery is always the biggest pull for online shopping and keeping an eye on what your competition is offering has never been more important as the online marketplace becomes more saturated.
Lastly, it’s important to approach online and offline as two different strategies that work together in harmony to maximise revenue. Each has their merits, each is adapting, and customers are hungry for both.