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Consumers still planning to spend this Christmas – but it will move online and will start on a belated Prime Day

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More than 70% of shoppers are planning to spend the same in 2020 on holiday shopping compared to 2019,  with continued online growth, Prime Day momentum and savvy shopping set to drive a ‘Merry Clickmas’.

According to new research from Rakuten Advertising conducted among 8,673 adults around the world, 87% of people will still be shopping for Christmas and 57% plan to purchase during key shopping peaks like Black Friday – despite 40% citing a decrease in household income due to COVID-19.

In the UK, the majority (42%) of shoppers look set to spend the same amount as last year on their holiday purchases, with 27% looking to increase their spend on people in their immediate family.

Meanwhile, a separate study of more than 6,200 brands and retailer sites by review site Bazaarvoice, also finds that Prime Day – which will be sometime in October of November, it believes – will kick things off and generate significant online shopping momentum in the run up the Black Friday and Christmas.

This lack of intent to curb spending during peak shopping periods is good news for brands and retailers, presenting an opportunity to drive revenue success in the second half of the year, after a challenging start to 2020. 

How COVID has shaped consumer priorities

According to Rakuten Advertising, UK shoppers have adapted on account of lockdown and acted conservatively when shopping during this period of uncertainty. Since the Coronavirus outbreak, 49% of UK consumers have decreased their monthly spending – a far more cautious position to contemporaries in Germany (28%) and France (33%) – and moved investment away from conventionally “fun” purchases to essentials. 

Research shows that UK consumers decreased their spending on travel (81%), restaurant and delivery (60%) and more luxurious items such as jewellery (57%) and apparel (59%). But increased spending on the likes of groceries (54%) and digital entertainment (35%).

The UK shopper also demonstrated a savvy shift to purchasing more online, with many consumers shopping via e-commerce for the first time. Approximately 65% of UK consumers have shopped more online since the outbreak of COVID-19, a change of behaviour that looks set to stick far into the second half of 2020, and presents huge opportunities for brands to engage with “new-to-online” consumers.

Online to reign supreme

Without question, concerns over health are still high, with  a third of shoppers (32%) saying then want to avoid large crowds – a mindset that continues to drive consumers online to shop.  73% of UK consumers are looking to buy primarily online this holiday peak, and of online purchases, 54% plan to purchase on their mobile. 

As buyers move to buy on mobile, employing effective mobile strategies during peak shopping periods has never been more essential for brands in converting consumers.

Anthony Capano, Managing Director, International, at Rakuten Advertising says: “Now is the time for brands to embrace mobile in-app tracking and accurately reward publishers for driving mobile sales. In-app tracking enables advertisers to track in-app conversions and effectively enhance their campaigns for mobile app users.”

Capano continues: “By employing in-app tracking, brands can better understand and track mobile activity and consumer behaviour with the view of optimising the consumer experience wherever they are shopping.”

Bazaarvoice finds something similar. On the Bazaarvoice Network, each month of lockdown has seen significant growth in page views and order count. With consumers now adjusted to online shopping, social distancing measures still in place and many still cautious, online will remain a priority platform for customers to shop, compare prices, and understand experiences from other customers.

In fact, of those surveyed, 85% of retailers think that online sales will increase this holiday season compared to last, and 61% expect higher engagement and/or purchasing through social media channels due to COVID-19.

As a result, 55% of respondents say they are investing more in ecommerce website upgrades this holiday season compared to last year, while 54% said the same about social media and social commerce.  

Not afraid to spend, but will do so wisely

This year, 38% of UK consumers plan to shop for 6 or more people at holiday peaks, and a potential slide back into lockdown will not phase the foolhardy consumer.

Should society face a second wave of restrictions, retail need not panic, as shoppers (51%) have said they do not plan to decrease their holiday spend. This determination to continue as normal and not let COVID impact Christmas is reflected globally with 54% of consumers saying there will be no change to their spend for key shopping dates in the first half of 2021 either, including Chinese New Year and Valentine’s Day.

Having said this, there is no doubt that people are prioritising who they purchase for and sales and discounts will be the most influential factor (47%) driving holiday purchases in the UK this year, with 32% of consumers planning to change when they shop to save more money. For brands, cashback and rewards will be an empowering tool to incentivise shoppers to invest.

Capano adds: “By working with affiliate publishers that reward consumers for shopping, brands can encourage repeat purchases.  AI tools are available that allow publishers to serve personalised ads and offers based on past shopping behaviours. By working together, they can drive a better experience for the consumer and increase engagement.”

He continues: “Brands can further drive loyalty for those who chose “in-store” shopping by partnering with publishers that connect the online-to-offline (O2O) experiences. These publishers provide discounts and offers both in-store and online – through strategies such as cardlinked offers – that enable brands to create a seamless consumer experience.”

Christmas trends 2020 to look out for

According to separate study of more than 6,200 brands and retailer sites by review site Bazaarvoice, there are a number of trends to look out for in the run up to Christmas.

While many associate Black Friday and Cyber Monday sales as peak buying days for holiday shoppers, the entire month of November sees elevated page views and order count – in 2019, page views were up 31.4% and order count was up 65.9% compared to usual. With the majority of shoppers (86.8%) saying they purchase gifts during holiday sales to take advantage of the deals, the impact of COVID-19 looks set to exacerbate this as consumers consider their finances more carefully.

Prime Day, however, will still mark the beginning of holiday shopping – even though it is late. In last year’s holiday consumer survey, around a fifth of shoppers planned to start their holiday shopping as early as mid-July, around Amazon Prime Day. While this year’s Prime Day is reported to be delayed until at least October, it remains a key opportunity for retailers and brands to kick start holiday shopping as consumers look for deals and value on other sites too.

According to Bazaarvoice network data, which represents shopping activity outside of Amazon, Prime Day 2019 (July 15th -16th) saw a 27.05% increase in order count over the typical day. 90% of brands and retailers say they’re ready to spend as much or more on Prime Day this year than in previous years, and with shoppers hungry for bargains, consumers are likely to up their spending too. Last year 70% of shoppers bought at least one holiday gift during this period.

UGC and reviews will be critical

July (along with August and September) has one of the highest rates of UGC interaction, highlighting that shoppers are engaging with customer reviews, photos, and questions and answers as they research gifts online. After September, the rate begins to taper off as shoppers commit to holiday buying. It’s critical retailers and brands consider their UGC strategy for the holidays as shoppers look to this content to make purchase decisions.

Consumers also want answers. While the recent spike in online shopping has accelerated customer submissions of reviews and questions this year, the trend was also prevalent in the lead up to the 2019 holidays. There was a notable increase in question submissions in October, at 4.5% more than the typical month. As a result, this holiday season an even higher upward trajectory of user submitted content is expected.

This information is increasingly influencing whether shoppers decide to purchase or not, and brands must be visible to their customers online. 48% of shoppers say brands and retailers responding to reviews improves their odds of buying the product. Bazaarvoice has also found shoppers generally prefer to ask brands questions via social media.

Suzin Wold, SVP Marketing, at Bazaarvoice, says: “There’s no doubt this Christmas period will be unlike any other, with more online shopping than ever. Retailers must have a holiday-specific plan that gives consumers confidence to purchase from them. It’s vital brands ensure their websites offer a seamless shopping experience and make it easy for customers to find the answers they seek through Q&A, reviews and brand response to maximise revenue opportunities. The impact on sales is clear; we see Q&As on product pages attract a 120% revenue per visitor lift on best-in-class sites and reviews drive a 159% lift in revenue per visitor. This year has been challenging for retailers – they must understand the behaviour changes lockdown has driven and adapt to engage customers effectively this holiday season.”

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