The 2020 Holiday Season Won't Follow the Conventional Retail Playbook

Sara Matasci
October 30, 2020
The 2020 Holiday Season Won't Follow the Conventional Retail Playbook
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Changes in the holiday shopping season have been underway for years, with consumers starting to shop earlier and retailers shifting their focus away from traditional brick-and-mortar channels towards eCommerce. And this year, changes are accelerating at an unprecedented rate.

Tens of thousands of retail stores have permanently closed across the globe, with as many as 25,000 expected to close in the United States alone in 2020. Of those that are open, most are restricting foot traffic, and  fewer shoppers are venturing out to stores – a major challenge in a season traditionally characterized by bustling storefronts. Factor in an early start to the sale season and a healthy dose of volatility from both the demand and supply side and it becomes clear: retailers are going to have to do things differently this year.

Shoppers are turning to eCommerce – many for the first time this holiday season

This year, 47% of U.S. shoppers report that they’ll do most of their holiday shopping online, with 46% of those saying that this is their first time doing holiday shopping through that channel. The same trend goes for across the pond: in the U.K., analysts expect more than 40% of holiday nonfood sales to occur online. Why? More than half of shoppers have avoided malls and department stores altogether since the start of the COVID-19 pandemic.

That tracks with the broader trend that we’ve seen this year: overall non-store sales have seen 24% growth so far this year in the United States, while clothing & accessories, electronics, and furniture & home stores have all seen a decline of anywhere from 11% to 35%. And eMarketer predicts that this trend will continue, suggesting that 2020 eCommerce holiday sales will grow by 35.8% compared to 2019.

Amazon sets the pace for holiday sales early with Prime Day

While the conventional holiday shopping season kicks off with Black Friday in the last week of November, sales got an early start in 2020 thanks to Amazon’s much-publicized annual sales event, Prime Day. Typically occurring in July, this year’s Prime Day was moved to October 13 & 14 to better manage fulfillment and logistics challenges. The scale didn’t change, however: Prime Day sales ran in 20 countries over the two-day period, and the platform giant saw an estimated $10.4 billion in sales, up 45.2% from last year.

The scale of Amazon’s ecosystem means that Prime Day doesn’t stop at Other major retailers have been running major sales of their own to compete with Prime Day for years, a clear signal that conventional sales calendars were being disrupted by digital natives long before a global pandemic threw everything into disarray. This year, retailers including Best Buy, Walmart, Target, Kohl’s, and J.C. Penney all ran deals of their own during the event, with Best Buy even calling the sale a Black Friday preview.

Agility is the name of the game

While consumer confidence is low, and about half of consumers are planning to spend less on the holidays this year, there are plenty of opportunities on the table for the retailers that are prepared to seize them. Per capita disposable income is up 6% compared to last year. Prime Day’s record growth proves that, when shoppers have more to spend, they’ll spend it if they discover the right products at the right price, on the right channels.

The challenge for retailers now is to remain agile. Those who have taken the eCommerce imperative seriously are a step ahead. But ultimately, consumer demands are more volatile and difficult to predict in the “new normal,” and will become even more so as many countries head back into lockdown. Those that are prepared to be flexible to meet those needs, both in terms of stock and in terms of fulfillment, have a leg up on the rest.

Next week, we’ll dive deeper into how retailers can bring more agility into their operations with a spotlight on strategies and insights from Mirakl’s customer success team to maximize holiday sales during lockdown.

This post is part of Mirakl’s coverage on the 2020 holiday season. Subscribe to the Marketplace Strategy Blog to have these stories sent straight to your inbox.

Written by
Sara Matasci
Senior Manager, Corporate Marketing at Mirakl

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