Prepare your wish lists, because the holiday shopping season has taken off! What can retailers expect this year? Will consumers buy in stores or online? What is the role of Black Friday? How important is environmental and social sustainability for consumers – and how does that translate into their actual shopping behaviour?
The Deloitte Holiday shopping trends survey helps retailers understand trends in shopping behaviour so as to prepare for a profitable holiday season. This year, three observations stand out:
- This is the first year that large online-only retailers are more popular for online purchases than traditional brick-and-click player websites, driven by an increased desire for convenience.
- Black Friday popularity keeps rising among millennials, putting more pressure on profitability.
- 68% of consumers say they will actively consider one or more aspects of sustainability in their shopping behaviour, making it an essential aspect to consider.
Holiday shopping trends survey 2020
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Pure players surpass brick-and-click websites for the first time
This is the first year where ‘pure players’ (online-only retailers) are more popular than the websites of ‘brick-and-click players’ (traditional retailers that combine physical stores with a web shop). This year, 33 percent of the respondents say they will buy from pure player websites, compared to 20 percent last year: a relative growth of a stunning 65 percent. Meanwhile, only 27 percent of the respondents say they will buy from brick-and-click player websites, compared to 26 percent last year.
“Consumers are getting used to the convenience of pure player websites” says Adgild Hop, partner at Deloitte Consulting and Market Lead for Retail in the Netherlands. “In general, they offer low prices, a wide assortment, free shipping and returns, and quick delivery. Once you have tasted the convenience of pure players, it is hard to settle for less.” He notes that in-store purchases have dropped by 5 percent. “1 out of 3 consumers does not even bother to go to the store anymore”. This means that brick-and-click players are fighting a double battle: they are losing customers both in their physical stores as well as online.
How traditional retailers can stay relevant?
To stay relevant, traditional retailers should focus on creating a distinct proposition, says Hop. “Although many retailers say they want to create a unique shopping experience, there is a lot that can be improved. The Christmas season is especially suited to focus on this experience and pull consumers to the shopping streets.” Moreover, they should create a strong omnichannel strategy to cater to the needs of their customers. Alternatively, they could partner with platform websites to create additional sales channels, advises Hop. “If that’s where your customers are, that’s where you have to go.”
Black Friday popularity increases under millennials
Black Friday, the traditional discount shopping day in the United States, continues its rise in popularity in Europe. In the Netherlands, it is mainly the younger generation that is attracted to Black Friday deals. 73 Percent of millennials (18-34 years old) expects to buy gifts during Black Friday, which is an increase of 7 percent to last year. For the older generations however, Black Friday popularity remains the same or even decreased.
According to Wesley Snoeren, retail specialist at Deloitte, younger generations are more subject to trends. “Because of social media, trends tend to transfer across borders more easily,” he says. “This is the case for Black Friday, but also for Single’s Day, which originates from China.” Black Friday is particularly driven by large online-only retailers, who are more willing to sacrifice profit for market share.
Retailers could avoid margin dilution through smart discount strategies, for instance by collaborating with manufacturers to sell old stock. It does remain pivotal though to balance these margin-saving strategies with the consumer perceptions they induce. If they think you are trying to fool them, they will turn to competition.
Environmental and social sustainability is important, but the landscape is diverse
Environmental and social sustainability are increasingly hot topics, and this shows as well in consumers’ shopping intentions for the Holidays. Most respondents find one or more aspects of environmental and social sustainability important, and 68 percent says they will actively consider it during their purchases shoppingtrender .
However, the focus area differs greatly between different demographic and sociographic groups:
- People with higher incomes are more willing to pay to support the environment, whereas lower-income respondents are more likely to make an effort, such as going to stores instead of online shopping.
- The older generation places significantly more importance on local initiatives (for instance, shopping at local stores or buying local products), whereas the younger generation focuses more on the less fortunate in the world (such as products that guarantee a fair work environment and fair trade products).
Intention versus behaviour
Although respondents say they find sustainability important and are incorporating elements in their consumer journey, their actual shopping behaviour is not always in line with what they say. For instance, the growing popularity of Black Friday is probably more driven by large discounts than by the desire for planet- and people-friendly purchases.
However, if environmental and social sustainability is important for target audiences, it definitely makes sense for retailers to address these themes, says Hop. Large online-only retailers are already actively stepping into this field, by for example focusing part of their web shop on sustainability, or promoting climate neutrality.
Deloitte’s Holiday Shopping Survey
The above insights are derived from the 22nd edition of Deloitte’s annual European Holiday Shopping Trends Survey. More than 6,000 people from seven European countries, including the Netherlands, participated in this study. The full Holiday shopping trends survey 2020 report describes where, when and what consumers are planning to buy, how much they are planning to spend and how they look for inspiration. If you would like to discuss the survey results, or how to convert them into a winning holiday strategy for your business, feel free to get in touch. Our contact details are listed below.