Holiday Shopping with COVID Highlights Digital Transformation Opportunities with Forecast 51% Increase in Online Purchases

When the novel coronavirus pandemic began to spread rapidly around the globe, it forced customers to change many of their shopping habits and accelerated the adoption of technology in many areas of life. One of the easiest areas to track this progress lay with the use of online shopping. Adobe found that year-over-year, August online shopping rates increased by 42 percent compared to last year’s pre-pandemic levels. September saw a similar rate of increase.

Early in the pandemic, online shopping made it possible for customers to get the products they needed without having to step into stores. Although some areas have begun to allow more brick and mortar businesses to function in person, digital commerce still allows customers to do their shopping more safely and with less hassle. A study by Radial found that “63% of shoppers say they are slightly or very much more likely to purchase from a retailer they knew was following COVID-19 safety precautions in-store.” So the pandemic creates a new cross-channel effect where adherence to CDC guidance in a store they do not plan to enter influences online purchasing behavior.

As stores begin to prepare for the onslaught of shopping that typically accompanies the holiday season, understanding how this push towards online shopping will influence consumers and their buying habits will help brands market effectively and bring in customers. Let’s explore the dominant trends that will likely shape the upcoming holiday shopping behavior.

What Prime Day can tell us

On October 13th and 14th, Amazon hosted their popular Prime Day, two days filled with steep discounts and deals on products across the Amazon marketplace. Since this event was held so late– in pre-pandemic times the discount days were over the summer– it ties in nicely with holiday shopping. Therefore, the information collected regarding consumer behavior and purchases can provide insight into what retailers might be able to expect as holiday shopping begins to pick up. See the Milestone retail marketing solutions.

Overall, the event was enormously successful for Amazon and the various third-party vendors who operate on the platform. The third-party sellers saw a 60 percent year-over-year increase on their Prime Day sales, generating $3.5 billion in sales.

Combining both Amazon and non-Amazon sellers on the platform, Prime Day generated over $10 billion in sales, a 45.2 percent increase year-over-year.

In addition to the record sales numbers, the platform saw a few key product categories that performed the best. This includes home, nutrition and wellness, and electronics, providing some insight into the areas where customers feel the most interest.

Trends in digital shopping

To coincide with Prime Day and the attention that these two days of deals and discounts bring to Amazon, a number of other online retailers decided to post their own savings opportunities on their brand websites as well. More than 1/2 of the top 100 retailers offered sales and promotions over those two days and saw equally interesting results. Traffic was up 51 percent compared to the first day of Prime Day last year, and online sales on these non-Amazon sites shot up by 69 percent globally and 76 percent within the United States compared to Prime Day in 2019.

These high conversion rates only comprise part of the overall digital shopping trend that we have begun to see materialize. An estimated 25 percent of customers have reportedly already begun their holiday shopping, having started as early as July. Additionally, 62 percent of US shoppers have announced their intention to begin shopping earlier to avoid crowds, with 69 percent saying that they plan to do more shopping online than they typically do. Additionally, 77 percent of customers report that they will do more of their browsing for gifts online instead of in the store, regardless of where they make their final purchases.

Within this overall shift towards more online shopping and buying, a third of shoppers throughout the United States report that they have discovered a new brand during the pandemic, indicating that these online customers are open to exploring and discovering new shopping options when online.

With the rise in digital shopping that began even before the pandemic, and the numbers beginning to indicate excellent online turnouts for holiday shopping, it is no wonder that over 2/3 of retailers expect the holiday season this year to increase the rate of online sales. Those who want to tap into this potential should consider these steps to prepare for the holiday season.

How retailers can prepare for holiday shopping

Step 1. Build and optimize your presence on Google Shopping

To make sure that your products appear to those searching for holiday gifts on Google Shopping, you will need to create a Merchant Center account. With this account, you can create product feeds that specify what you sell as well as your prices. Make sure that you fill out all the information as accurately and precisely as possible. You can then link your Merchant Center account with your Google Ads account to create shopping campaigns that allow you to target customers looking for relevant products through the search engine.

Step 2. Promote your local business

Customers have expressed an increased interest in supporting small businesses, particularly in the wake of the pandemic. According to Google, 66 percent of holiday shoppers in the US report that they will shop more at local businesses, which means that marketing your company as a local institution can help to bring in more interest and conversions throughout the holiday season. Milestone offers the most complete, SEO-first local solution.

Step 3. Make it easy for customers to browse gift ideas on your site

With all of the new customers who will turn to online browsing and shopping during this holiday season, you want to make it easy for customers to browse your site. Those who are accustomed to walking through aisles to find the right gifts for their friends and family will want to replicate this process online. Gift list suggestions and the ability to sort products based on ages or interests will make it easier for them to find the right gift without having to search for a specific product.

Step 4. Make sure your checkout process is straightforward for newcomers

With the increase in online shopping, you also want to make sure the entire checkout runs seamlessly. Those new to online shopping will need the comfort and ease that comes from a straightforward experience. Minimize the amount of navigation and steps needed to complete a purchase. Adding in any additional features to give customers further reassurances, such as promoting your security certificates, can also provide a sense of comfort.

Step 5. Offer incentives, such as free shipping to make it easy to transition to online shipping

Customers have become increasingly accustomed to receiving perks like free shipping, which means that they may feel reluctant to buy from companies that do not offer these options. Similarly, those transitioning from in-person shopping, when paying for things like shipping would not be a consideration, to online shopping will also appreciate this benefit in their shopping experience. Offer both new and returning consumers incentives to encourage them to select your online business over other options or reverting back to in-person shopping. Ask your Milestone success manager about holiday promotion mechanisms and ideas.

Step 6. Start rolling out holiday shopping campaigns now rather than waiting

Since an increasing number of customers have already begun to think about their holiday shopping needs, brands do not want to waste time getting started on their campaigns. Customers have already begun to browse and shop online for the upcoming holidays, so brands want to start building their reputation for online shopping as soon as possible. Create campaigns that help customers decide on relevant presents for their loved ones and promise to make the process simple and straightforward for them. Milestone can help amplify your messaging with a paid campaign.

The holiday season has begun, and as Prime Day and early sales indicators show, customers have already begun their holiday shopping. Get started immediately optimizing for these consumers, including those who might be new to online shopping with the pandemic. Capture people’s attention and make this a strong holiday season for your organization.