How Will COVID-19 Impact Holiday Shopping?

At the onset of the coronavirus pandemic, most people hoped that things would be back to normal by the end of the year. Unfortunately, now it seems inevitable we’ll have to wait until well into 2022 for things to settle down again. The virus has impacted almost every aspect of life over the past two years and will continue to do so for the foreseeable future. This holiday season will be unique and unprecedented with the discovery of the Omicron COVID-19 variant.

Holiday parties will look different, for starters. We’ve already celebrated the Thanksgiving holiday and shopped on Black Friday and Cyber Monday. It’s possible that holiday shopping will be turned upside down as we get closer to Christmas and COVID cases continue to increase. Many companies are already prepping for increased online demand and hiring tons of seasonal workers as a result.

So, how will holiday shopping trends shift this year?

How Our Shopping Habits are Changing

According to data from Fluent Pulse, in a typical year, about 65 percent of shoppers handle their gift lists between September and August. While 21 percent of consumers said they planned to get their shopping done before Thanksgiving, more than 40 percent said they still didn’t have a plan. However, expect consumers to shop earlier than usual this year to avoid shipping delays, primarily because of the ongoing supply chain crisis at ports across the U.S.

Moreover, a research study from McKinsey & Company indicates that not only are shoppers starting earlier this year: fourth-quarter consumer spending in 2021 is likely to rise 7% over 2020 and 9% compared with 2019. With stronger consumer confidence this holiday season, it’s no surprise that spending is up overall.

We can also see the direct impact of the coronavirus on how habits have changed within the past year. In 2020, Fluent Pulse found that 50 percent of shoppers preferred to shop both in-person and online. We predict that trend will shift towards online shopping this holiday season with increased concerns over new COVID-19 infections.

Other Trends and Findings

As expected, this shift should be beneficial for online retailers. Amazon should continue to lead the pack. Nearly half of respondents to the Fluent survey said they planned to shop with the industry leader. Comparatively, just 27 percent planned to shop with Walmart and only 4 percent with Target.

Brands and retailers are adapting to a new landscape like consumers. McKinsey & Company found that retailers are having difficulty maintaining customer loyalty. Since keeping stock of items has been increasingly difficult for many major retailers, consumers have taken an “omnichannel” approach. They’re shopping for the items they need at whichever store or on whichever platform can provide them with what they need the fastest, instead of just defaulting to their usual store(s). This is a new phenomenon that retailers will likely have to contend with well into 2022.

The Bottom Line

We know things will still be different this year. Research and insights like this start to shed light on exactly how things will change and help us specifically figure out why trends are shifting. In 2021, spending on holiday shopping is up, while people are starting earlier due to concerns over decreased supply, increased demand, and ongoing supply chain issues.

Overall, it will be interesting to see how companies and consumers alike adjust to the new realities of holiday shopping.