7 trends to watch during the 2021 holiday shopping season

The holiday season is here. Considering the 2021 holiday spending is expected to exceed $1 trillion in revenue in the U.S. alone, it's crucial to get your brand and advertising strategies right so you can capitalize on holiday spending.^[1]

Taking insights from the 2020 holiday shopping season, we have highlighted important trends that can help your business boom during this festive period. From improving your digital presence, maximizing on early shoppers, and ensuring smooth mobile experiences, through to advice on free shipping and returns policies, this article will help you plan accordingly to make the most of the 2021 holiday shopping season.

But before that, let's start by looking at what was learned from the 2020 holiday season.

How did the pandemic affect the 2020 holiday shopping season?

The COVID-19 pandemic dramatically reshaped the world and changed how people worked, interacted, and even shopped. As consumers changed the way they celebrated, traveled, and spent their disposable incomes, brands had to adapt and shift the majority of their business online.

Despite the uncertainties brought on by a raging pandemic, the 2020 holiday season resulted in enormous gains for ecommerce businesses. Consumers opted for online shopping due to the health risks posed by in-store shopping resulting in a surge of ecommerce sales.

According to the National Retail Foundation, 2020 holiday sales grew by 8.3% despite the pandemic and economic recession.^[2] For consumers, spending on gifts that would lift the spirits of their loved ones brought a sense of normalcy, given the chaos that marked the year 2020. Consumers were also encouraged by the news of COVID-19 vaccines, which brought hope of a better year ahead and increased consumer confidence.

Here are some key figures that summarize the impact the COVID-19 pandemic had on holiday shopping in the United States.^[3]

• 31% of holiday shoppers were more interested in in-app shopping compared to 2019
• 70% of consumers planned to do over 50% of their holiday shopping online
• 50% of consumers planned to utilize curbside pick-up more during the holidays
• 75% of shoppers were likely to stray from their favorite brands for better-priced alternatives

The above statistics are invaluable takeaways that you can use to drive sales even with modest resources. As it turns out, COVID-19 is here to stay, and for this reason, the 2021 holiday shopping season is gearing up to be just as volatile as 2020’s. With this in mind, here are some trends to watch and incorporate into your sales and marketing strategies.

7 trends to watch during the 2021 holiday shopping season

1. Digitally driven retail

Digital shopping has become more immersive over the past year, as in-store shopping becomes more intent-based and transactional. There is a significant gap between consumers' desired shopping experience and what online retailers actually provide. The appetite for engaging digital experiences is surging with no signs of slowing down, and consumers want tech-forward shopping experiences.

As such, brands are looking to offer a more “in-store” experience online, from live fashion shows to augmented reality try-ons and live chats with customer service associates. With consumers preferring to shop online instead of in-stores, brands should strive to meet consumers’ demands. Otherwise, they might just switch to your competitors.

Digitally driven retail also means reduced brand loyalty. Rather than sticking to familiar patterns and brands, consumers can easily compare products and price points online. However, providing an elite shopping experience isn't just about competitive pricing. Your customers want to feel valued and cared for throughout the shopping experience, and that can only come from great customer service.

2. Early shopping

Digital-driven retail means one thing: an extended shopping season. A lot of consumers are starting their Christmas and holiday shopping early due to concerns about supply chain and delivery delays. These concerns will impact shopping patterns and lead to people starting their holiday shopping earlier.

As consumers begin holiday shopping earlier than usual, businesses should offer deals earlier to increase their sales. Promotions and discounts will increase the likelihood of people shopping at your store as they seek to avoid the shipping delays common to the holiday season.

Supply chain woes are a global reality. You don't want to cancel orders or have your customers receive their purchases months after paying for them. There's nothing that enrages customers and brings down customer satisfaction levels quite like delayed shipments.

It's no secret that out-of-stock items constitute a lousy shopping experience, and few, if any, customers will wait for a retailer to restock before looking elsewhere. So, how can you, as a brand, prepare for this? It's crucial to partner with verified, reliable suppliers if you're to provide a seamless shopping experience.

3. Increased price sensitivity

Even though most consumers are cautiously optimistic that life will eventually achieve some semblance of normal, the economic turmoil caused by the coronavirus pandemic has significantly affected people’s spending capacity. Many consumers remain concerned about the implications of COVID-19 on their financial health as well. As a result, consumers understandably are looking for the best deals they can find.

Price sensitivity reduces brand loyalty as consumers make decisions based less on preference and more on necessity. Facing less-disposable income, people need to extend their wallets further and are spending less and less on non-essential items.

Given these circumstances, brands that will emerge in the strongest positions are those that can effectively demonstrate the value their product and service offerings will add to their customers' lives. In the midst of the worst health crisis in living memory, it's not just about offering low prices. Brands should seek to address customers’ pain points and drive long-term value rather than short-term advantage by providing better deals and discounts.

Keeping your products at a sensible price point and tailoring messages to focus on the positive aspects of your brand can build customer loyalty during this holiday season. Consider having a one-day sale or a winter sale to showcase your best offers and attract customers.

4. Omnichannel product discovery

Omnichannel retail is about providing your customers with multiple ways to buy from your brand. Regardless of your brand's top sales channels, mobile apps and social media should play a key role in creating a quality omnichannel customer experience.

Consumers today want — nay, expect — to have flexible buying models at their disposal. Online shopping isn't limited to websites and in-app purchases anymore. People are discovering and purchasing on social media more than ever. Many are turning to social media, Instagram in particular, for personalized inspiration and curated recommendations.

If a customer discovers you on Instagram, it should be fairly simple for them to shop for your products. The idea here is to make it easy for shoppers to find what they want. It's about understanding what your customers are looking for and what they like about your products. You can utilize these insights to make your brand and its offerings more visible and discoverable across a multitude of channels.

5. Demand for free shipping

Free shipping has become an expectation for most shoppers. It’s actually a differentiating factor that could make customers choose one brand over another. Shopping carts are often abandoned at checkout as customers get dissuaded by additional shipping charges.

Consumers want free delivery and are even willing to meet retailers halfway to get it. The ‘buy online and pick up in-store’ shopping model is becoming more popular. For consumers, free curbside pickup is a convenient and safe way to get their holiday shopping done while avoiding a delivery charge.

The ultimate challenge for businesses is how to offer free shipping and remain profitable. Here are a few ways:

• Factor shipping into operation and pricing
• Focus on up-sells: Shipping gets more efficient the more items a customer buys; therefore, you can prompt customers to shop over a specific dollar amount so they can qualify for free shopping
• Market free shipping. The more sales you make, the more economical it gets to offer free shipping

6. Preference for free and easy returns

Shoppers want free and easy returns. Every year like clockwork, consumers flood online stores, eager to return or exchange products. There's one vital thing missing from the online shopping experience — shoppers are unable to touch, feel, or try on their purchases before committing to them. That's why the returns process should be easy.

Online shopping requires a great deal of trust between you and your customers. Trying to minimize returns or a hectic returns process equals telling customers not to shop at your online store. Consumers appreciate some flexibility from retailers, including a flexible returns period. A good return process can help attract new customers and, more importantly, will increase brand loyalty.

Of course, it’s necessary to keep an eye out for people trying to abuse your return systems and have contingency plans. But for your online shop to succeed this holiday season, the basis has to be: order what strikes your fancy, and if need be, return it with no questions asked.

7. Shoppers will embrace mobile commerce

As mobile experiences improve, people are getting more and more attached to their smartphones. Mobile commerce is expected to account for up to 36% of ecommerce sales in 2021.^[4] For retailers, this means that mobile shopping should be at the heart of your peak season strategy.

Optimize your online store for mobile shopping, including your product catalog and customer support. The mobile shopping experience should be quick, convenient, and smooth. To stay in business, your online store must offer a great user experience and site functionality, no matter the device it's accessed on.

10 great product ideas to add to your holiday store

The holidays are a great time to get the value exchange right and make a lasting impression on your audience. They also offer an excellent opportunity to expand your product lineup and introduce new offerings.

Here are some product ideas to get your creative gears spinning:

• Christmas decorations and items for winter-holiday parties
• Personalized jewelry and accessories
• Blankets and themed pillows
• Themed snow globes and snowmen
• Items that complement your best sellers, e.g. pens if you sell notebooks
• Ready-to-order gift bundles
• Advent calendars
• Artificial Christmas trees and ornaments
• Holiday-themed toys
• Festive mugs, bottles, and tumblers

Finally, create free guides on gift bags and packaging for the holiday season. Product packaging impacts purchase decisions, so you might want to offer customized packaging for the holidays. Don't forget to create a holiday email campaign to spread the message about your holiday promotions and any coupons that might be on offer.

Plus, you can always partner with sister companies to develop gift sets that will give more consumers more products at a good price.

Get ready for the holiday season with Alibaba.com

Right now, everyone is out looking for the best Christmas deals they can find. By all predictions, holiday shopping in 2021 is bound to be as exciting and profitable as ever — if you play your cards right, that is. As you've probably noticed, many holiday shopping trends kicked off with the coronavirus pandemic last year.

However, these trends have been coming down the pipeline for some time; the pandemic just accelerated their arrival. It's paramount to work these trends into your marketing strategy to ensure your business thrives this season.

Planning ahead for the holiday season can save you from unnecessary headaches. So, what are you waiting for? Partner with Alibaba.com and have peace of mind knowing you won't run out of products or have delays in shipping. Partnering with Alibaba.com provides you with several shipping solutions with on-time delivery, tracking information, and competitive pricing.

Harness the power of technology to plan your inventory, offer great prices, and improve your fulfillment rates this festive season with Alibaba.com!