The strange passage of time this year is likely to manifest another big shift in retail trends. With consumers now much more comfortable with shopping for all things online and with health concerns still on top of mind, this holiday shopping season will not be like one seen before. According to our new holiday survey, consumers are going to shop earlier than usual and spread out their holiday purchases over a longer time frame than the usual November to December period. They will finally buy things that had been put on the household spending backburner earlier in the year. And they will order these products online, potentially without stepping foot inside a store at all. This means in-person Black Friday doorbusters are not likely to be a thing.

In short, the formal November-December holiday shopping season is meaningless this year — and perhaps forever. The smell of change had been in the air for a few years — evidenced by the growing number of digital shopping milestones situated outside of the traditional holiday period, catalyzed, of course, by Amazon’s Prime Day. This, then, is just the latest on the long list of trends that have been sped up dramatically this year because of the consumer behavioral changes brought on by the pandemic.

Nearly half of US consumers expect to begin their holiday shopping before October 31, according to the AlixPartners survey conducted in early September (Figure 1).

fig 1 september 2020 retail viewpoint chart  01

Crucially, 45% of Americans plan on doing most of their holiday shopping online, up 15 percentage points from last year. There are other changes in the offing. Only 50% of consumers plan to visit a store to browse new merchandise, down 26 percentage points from last year.

fig 2 september 2020 retail viewpoint chart  02

A concern about health is the dominant reason for relying so heavily on ecommerce, followed by a preference for online shopping, and then its convenience. The top categories where consumers plan to spend the same or more this season are apparel, toys, footwear, and electronics and video games (Figure 3).

fig 3 september 2020 retail viewpoint chart  03

Our forecast for this newly defined October through December holiday season is an increase in sales of 1 to 2.6% over the same three-month period last year, when sales totaled $1.132 trillion.

The question for retailers is whether and how fast they can adapt to this new world. Here are our recommendations for what to do right away:

  • Encourage customers to leverage pickup options: This is better both for margins, which are lowest for delivery, and may even be the preferred option for some consumers. Customers who don’t want to pay for home delivery but are also wary of coming into the store are likely to adopt curbside pickup and other buy-online-pick-up-in-store options. While most retailers either launched these options or streamlined them when stores first closed in spring, the holiday surge will demand seamless operations, thoughtful store space management, and prioritizing consumer preferences.
  • Assess new needs in store labor models: The holiday hiring spree is going to look different this year in its requirements. Roles may have to change significantly from customer-facing store associates to packing and shipping, handling increased online returns, and managing the flow of inventory among the various omnichannel options available. You may need to quickly decide how to reallocate or share resources among teams as needs change or new ones arise, which will demand preemptively removing any communication barriers and other internal silos.
  • Leverage ecommerce to improve decision-making: Plug in internal ecommerce learnings made over the last few months to model your expected holiday mix of online and in-store transactions, layering in any external market data. Eliminate or reduce marketing investments in areas that you have found to be less productive as this is time to be efficient on cost. Monitor performance continuously and adjust tactics as consumer and competitor behaviors evolve and platform costs shift.

The survey did find that 23% of consumers expect to spend less on holiday shopping than last year, and with such significant behavioral changes in store as well, this could be a tricky season overall. The winners in this environment will be those that can quickly adapt to the dramatic channel shift playing out right now and leverage the resulting increased data to drive decisions that create a seamless and safe customer experience.