It’s been a rough year for retailers, with the COVID-19 pandemic and government-mandated shutdowns forcing them to either close their doors or pivot to curbside pick-up, delivery and online options. At the same time, many shoppers have been hesitant to even step into brick-and-mortar shops as the pandemic continues its hold on the United States.
The National Retail Federation, though, has a bit of good news for retailers: This holiday shopping season should be a strong one, with consumers spending more money this year than they did in 2019.
The federation forecast that holiday sales during November and December will increase by 3.6 percent to 5.2 percent this year when compared to 2019. The federation expects consumers to spend from $755.3 billion to $766.7 billion on holiday shopping this year.
That’s some welcome cheer for retailers hoping to survive an otherwise dismal 2020.
But why are consumers, who are facing their own economic challenges, opening their wallets for the holidays?
Katherine Cullen, senior director of industry and consumer insights with the National Retail Federation, said that there might be a simple reason for the holiday spending this year: People are looking for a bit of happiness in a tough year.
“Throughout the pandemic, we’ve noticed consumers embracing special events and celebrations,” Cullen said. “Mother’s Day, Father’s Day, Halloween. It’s almost as if with all the stress they really want the holidays to feel special. They want to have some joy, to feel a little festive. They want to celebrate even more than they normally would because of the turmoil and disruption to their everyday lives.”
Shoppers are changing their spending habits a bit this year, though. Cullen said that while holiday shopping overall is expected to increase by as much as 5.2 percent this year, online shopping is expected to soar by 20 percent to 30 percent when compared to last year’s holiday season.
This trend already played out after Thanksgiving, Cullen said, with the number of people who limited their shopping to online only increasing by 40 percent on the weekend after that holiday.
“And that weekend has traditionally been about the store experience, about getting out and interacting with the family,” Cullen said. “We definitely saw the impact of the pandemic that weekend with so many people only shopping online.”
Another trend? This year retailers extended the holiday shopping season to boost their end-of-the-year sales. Cullen said that many retailers began offering holiday sales and deals in October, giving consumers the ability to shop without having to worry as much about crowded stores.
Cullen said that some of the strategies that retailers have used to survive the pandemic are likely to become permanent features. That includes curbside pick-up and an emphasis on delivery services for everything from restaurants to big-name department and grocery stores.
Consumers are getting used to these services and appreciate the convenience of them, Cullen said.
“This is something that consumers tend to like,” Cullen said. “They don’t have to wait for something to be shipped to them. They can get it the same day. Just look at grocery. We see consumers using curbside across the country in both rural and urban areas. This is a service that is not dependent on a dense, urban area like online grocery delivery is. And it is something we have seen a lot of small sellers introduce.”
When the pandemic is over? Cullen said that consumers will expect retailers to continue to offer multiple ways to shop.
“Consumers like choice,” she said. “Retailers who have a mix of shopping options will be the ones that succeed. They need to offer online shopping and curbside. Those choices resonate with consumers. They can get items in a way that is best for them in the moment. If they have something they want to get quickly and go home, they can have curbside. We think that service will continue to be widespread after the pandemic.”
