After a challenging and uncertain holiday season in 2020, retailers are preparing for another rush. While there is hope that some amount of normalcy will return to shopping behaviors, retailers must be ready for another season of online shopping and non-traditional fulfillment methods.
We partnered with eTail and WBR Insights to discover retailers’ vision for the 2021 holiday season, the change in customer behavior they expect to see, and what technologies they’re adopting to prepare for a new season of customer expectations.
The Retail and eCommerce Holiday Report 2021 incorporates data from 100 retail leaders across the US and Canada. They are directors, department heads, VPs, and C-Suite executives in industries ranging from apparel and health and beauty to home furnishing and electronics. Most have at least $250 million in annual revenue.
What we learned: if retailers hope to thrive this holiday season, personalization and omnichannel experiences are more important than ever. Customers have adapted to the digital storefront and expect technology to allow them to seamlessly transition to the in-store experience, especially with safety concerns still prominent. An omnichannel experience is also key for any eCommerce brand that wishes to better engage with its customers.
Key finding #1: Shopping may never be the same
As the world slowly returns to normal after the COVID-19 pandemic, retailers would like to see certain aspects, such as the amount of in-store shopping, return to its pre-pandemic state. But they recognize that shopping has likely changed for good with many stores continuing to offer services such as online shopping, curbside pick-up, and Buy Online, Pickup In-Store (BOPIS) for the foreseeable future.
A number of customer behaviors from 2020 will likely remain unchanged in 2021:
- 91% of retailers expect alternate payment options to continue
- 84% predict a higher level of online shopping
- 64% anticipate concerns about the health and safety of in-store shopping
However, retailers don’t believe that all 2020 shopping behaviors will remain:
- 47% expect that while customers tried new retailers and brands last year, they will revert to brand loyalty in 2021
- Consumers won’t begin shopping as early as they did in 2020
To accommodate these trends, retailers must consider implementing omnichannel shopping in the long term. It will be crucial for the 2021 holiday season and beyond to meet customers where they are and provide shopping options that are comfortable and accessible for everybody.
Key finding #2: In-store safety remains essential
While retailers’ foot traffic might not return to normal levels, it’s very important that they develop a plan to maintain in-store safety. Indeed, a powerful 86% of those surveyed said that they will continue with safety and sanitation protocols implemented last year.
91% of retailers plan to keep masks for employees, and 87% intend to take on the more sensitive task of requiring masks for customers. Most respondents will also continue intensive cleaning practices (80%) and enforce social distancing (63%).
As government regulations are lifted and consumers may be getting weary of in-store requirements, retailers must develop best practices that balance customer needs with safety requirements. For example, just 37% of retailers plan to set customer capacity limits in store.
In addition, customers want safety to extend beyond the store: those who are concerned about health risks expect non-traditional methods to fulfill their needs.
Key finding #3: Customers expect preparation
During the 2020 holidays, consumers and brands alike were still reeling from an unprecedented global situation. While customers became more dependent on online shopping as a safe and effective strategy, they were also more lenient if things didn’t quite work as expected.
By contrast, in 2021, it’s felt that customers may have higher expectations around online shopping and desire a personalized experience with no tension between channels. In customers’ eyes, retailers have now had time to adapt to digital operations. (Looking for more information on personalization in 2021? Check out our 2021 Ecommerce Personalization Benchmark Report)
Despite this, only a slight majority of retailers state that they’re ready to deliver this kind of omnichannel customer experience. 49% of those surveyed rated their readiness as good: they’ve prepared, but no more than the rest of their competitors.
Meanwhile, a significant 44% believe that their preparations need improvement and that they are falling behind their competitors. Brands that are properly prepared are expected to excel this holiday season. But with so many retailers underprepared, there’s a massive missed opportunity in the industry.
In 2021, many preparations involve deploying new technologies to create a more meaningful customer experience.
Key finding #4: Retailers must leverage technologies for customers
Retailers have big plans for technology during the 2021 holiday season. 61% plan to implement AI or machine learning as a new technology this year, while 44% will explore augmented or virtual reality. They’re also looking at in-store robotics (39%), in-store analytics (38%), and other next-generation technologies to streamline operations and potentially create more personalized experiences on the sales floor.
And those aren’t the only strategies for providing convenient, seamless experiences: companies will continue or adopt common retail practices from 2020 this holiday season. The most popular strategies are:
- 48% of retailers are deploying interactive kiosks to give customers more capability
- 47% will empower associates with technology to personalize experiences
- 45% of respondents are forming strategic partnerships with third parties for fulfillment or returns
Finally, retailers are turning to third-party vendors and automation to scale and meet the demand for the holiday rush, particularly in the area of customer care.
An incredible 60% of retailers will employ automation to improve customer service operations. 33% intend to use automation in place of hiring more employees, while 27% will both hire and introduce automation to meet increased demand. Automated support options, like chatbots for simple queries, are an increasingly popular strategy.
Conclusion: All eyes on the customer
While the holidays aren’t quite as uncertain as they were last year, many retailers are still taking a more cautious approach. The markets are still sending mixed signals about consumer and spending behaviors for this year.
However, what is certain is that retailers must find solutions to accommodate every customer, no matter how they like to shop. They can do this by prioritizing safety, leveraging technology, and accepting that the future of retail requires a seamless, omnichannel experience that meets the customer where they are.
Looking for more detailed data, analysis, or recommendations for your business this holiday season? Download the full Retail and eCommerce Holiday Report 2021 today.