Co-Founder and CEO at Intelligence Node, serving AI-powered eCommerce insights from the world’s largest retail database.
The success of Amazon Prime Day 2020 solidified what we already knew to be true: E-commerce is — and will continue to be — the overwhelmingly dominant force in retail.
Reports show that spending on Amazon’s U.S. e-commerce website on Oct. 13 and 14 rose 36% compared to Prime Day in 2019. While Amazon does not disclose sales results, projections for the shopping holiday were around $6.17 billion in the United States alone.
With Prime Day landing right at the start of this year’s holiday season, retailers need to be prepared earlier than ever to adapt to changes in consumer preferences. In fact, a new survey commissioned by my company found that 71% of consumers plan to complete their holiday shopping before Dec. 15.
Three Key Trends: Now And For The Future
The Covid-19 pandemic — combined with an economic recession and rising retail prices due to trade tariffs — will drastically shift the way that consumers approach the 2020 holiday shopping season.
But these new behaviors won’t end after Boxing Day; they will become habits that endure for years to come. Based on survey results, here are a few of the key ways that retail and consumer patterns have transformed.
The Boom Of E-Commerce Is Here To Stay
The e-commerce “boom” will continue until it’s no longer considered a boom and, rather, just the way that modern consumers shop. According to our survey findings, 83% of consumers are likely to opt for online shopping or omnichannel approaches such as curbside pickup versus shopping in-store this holiday season.
E-commerce was already growing exponentially, but the pandemic accelerated the shift — by as many as five years, according to some reports. And now, even with brick and mortar stores open for business, consumers are continuing to favor buying via e-commerce over purchasing items in-store. The primary reason? Safety and convenience.
Shopping Holidays Will Become A Discount Culture
Shopping holidays that once happened only a few times per year will become the everyday norm. While short-lived deals are what is anticipated to bring back consumption in the last few months of 2020, they will persist and transform into a retail culture of discounts. Consumers have come to expect deals not only from Amazon, but from other big-box retailers such as Walmart and Target.
It’s no surprise, then, that the majority of consumers are planning to shop at these large retailers this holiday season because they offer the most attractive discounts.
Even DTC (direct-to-consumer) brands are breaking their never-go-on-sale rule. DTC businesses such as luggage startup Away and clothing retailer Everlane have each offered discounts of up to 50% in the months during Coronavirus.
Low Prices And Free Delivery/Returns Are The Most Important Factors
Finally, our survey results found that this holiday shopping season, consumers will consider low prices and free delivery/returns as the most important factors when choosing which retailers to purchase from. Not only that, but 77% said that they would stray from their favorite brand to get a better price elsewhere. This trend indicates that having a superior product alone might not make the cut and retailers and brands will have to leverage price intelligence tools to offer competitive prices and win customers.
With an increased consumer reliance on e-commerce, the importance of fulfillment has grown as well. Now more than ever, retailers need to focus on delivering a convenient and predictable shopping experience — particularly when it comes to delivery and returns.
Retailers, Brands And Marketplaces Must Adapt To New Habits
“Innovate or die” might be a catchphrase, but it couldn’t be more true for this moment. The retail landscape is experiencing long-lasting change, and this tremendous and quick growth in e-commerce is uncharted territory for all, ridden with challenges and opportunities waiting to be mined. And the truth is that not just retailers but brands, manufacturers, and marketplaces all need to tailor their strategies and adopt smart, state-of-the-art retail solutions to keep up with this new breed of consumer — or risk losing customers.
And when choosing the right technology provider, retailers and brands need to think long-term, set expectations and ask these questions to ensure they find the right solution:
• Do I want to focus on an omnichannel approach or a sole e-commerce approach?
• Is the solution I opt for scalable and can accommodate the growth of my company?
• Is the technology forward-looking, or can it go redundant in the future?
• Is the cost and time of implementing the solution justifiable?
• How fast can I get returns on my investment?
• Is the solution easy to understand and implement?
• How can this solution help my company reach the desired goals in the next year and in the next five years?
Brands and retailers that embrace the right retail technology and offer convenient and unified e-commerce experiences, competitive prices, targeted promotions throughout the year and seamless fulfillment will undoubtedly rise above the rest not just this holiday shopping season, but for the foreseeable future.
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