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New Epsilon consumer sentiment research released: What marketers can learn from holiday 2020

With the holidays right around the corner, marketers are putting the final touches on their holiday campaigns. During Halloween, we learned that consumer spending in home décor greatly increased, as consumers were looking for ways to create holiday excitement with the modified celebrations and trick-or-treat policies due to COVID. According to the National Retail Federation, consumer household spending on décor increased close to 7% from $86.27 in 2019 to $92.12 in 2020.

So what does this mean for holiday 2020? We anticipate a similar pattern of increased spend on home décor as many households have already began decorating and several popular decorations (such as the outdoor inflatables) are now out of stock at major retailers. As consumers are missing ‘the norm’ of the anticipated holiday celebrations with family and friends, they’re seeking ways to create experiences for their families to compensate for the lack of tradition. Consequently, decorating and home décor has become a primary focus.

So what can marketers learn from holiday 2020 that will help them to plan for future holidays as we continue to navigate the COVID pandemic? We conducted a research study and asked consumers across the generations to learn how they’re navigating the strange holiday shopping landscape this year. As marketers continue to plan for holidays next year, it’s important to understand consumer behavior like where they are shopping, their expectations for packaging and how connecting with a brands’ values influences purchase behavior. Below we share our research findings.

Top 5 learnings of holiday 2020

Timing of shopping

Understanding when consumers are planning to shop is important for retailers so they can best prepare for inventory demands and ensure their brick and mortar stores are safely equipped to handle an influx of people. For holiday 2020, we’ve learned from our research that one in four consumers have already started their holiday shopping. And prior to the Thanksgiving holiday, 50% of consumers across the generations will have started their holiday shopping. Gen Z is the least likely to have already started their holiday shopping and are more likely to start at Thanksgiving.

To accommodate for the ‘anticipated rush' of Black Friday shopping, many retailers began promoting their Black Friday offers in early November and plan to continue the promotions through to the December holidays. This proactive approach will help to control the anticipated crowds of Black Friday. While consumers appreciate the extended promotional time to holiday shop and save, many are concerned that the ‘best deals’ will not be released until November 27 (Black Friday). To mitigate this worry, many retailers are extending their price matching program through December 25 to assure consumers ‘the best deal has been announced’.

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Preferred shopping methods

US eCommerce sales will reach $794.50 billion this year, up 32.4% year-over-year. The good news is that this increase is predicted to offset the decline of brick-and-mortar sales. During the pandemic, more consumers have adapted the eCommerce channel and have shared their positive experiences like the ability to see the inventory that’s available, returns are made easy and reliable forecasted shipping dates. The adaption of the eCommerce channel will continue as we head into the new year.

For holiday 2020, online shopping with home delivery is the preferred shopping method. 60% of consumers across the generations said they plan to do their holiday shopping online with home delivery. However, in-store is still an active channel as 54% of consumers plan to shop in-store so they can take their purchases home same day. During the COVID pandemic, ordering online and picking-up via curbside has been a popular order method, however, only 22% of consumers across the generations plan to holiday shop this method. The forecasted long lines of curb side pick-up along with the anticipation as to the inventory availability is making this shopping method less attractive for consumers this holiday season.

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Packaging of presents

So many holiday traditions are different this year. From virtual visits with Santa Claus to Zoom holiday gatherings, consumers are are hoping some holiday experiences will remain the same. One activity that will never change is gift giving. And consumers are looking for ways to personalize these gifts. In fact, Esty reported they’ve seen a 156% increase in searches for custom and personalized gifts within the past three months. And once these gifts are purchased, the gift wrapping is going to be important. In fact, from our Epsilon research, we learned that close to 50% of consumers across the generations say that packaging is important for their holiday gifts that are being shipped directly to family and friends. And, 57% of Gen Z and Gen Y consumers state packaging is a top priority.

Several retailers are offering complimentary gift wrapping with no minimum purchase required. And this is being offered in all channels. Or, if the retailer does not do the actual wrapping, they are supplying gift wrapping materials. For example, the beauty retailer Origins is providing complimentary gift bags with an easy to tie festive bow.

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Connecting with brands beyond the promotion (the price)

While price, value and quality remain top on the list regarding the important brand attributes to consumers while connecting and transacting with brands this holiday season, customer service is now more important than ever. 43% of consumers across the generations shared customer service is key when deciding to transact with a brand.

As you’re thinking about the role of customer service and your brand, think about the entire connected experience whether purchases are made online or in-store. The goal is to provide a seamless experience so the consumer has a positive holistic brand view. Also, it’s important to understand all reasons as to why your customers form brand affinity. Is it because they align with your corporate social responsibilities, or how you’re giving back to the local community? Ask them – their input is so valuable to ensure your brand is fulfilling their anticipated customer experience.

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Safety will remain top of mind

Safety remains a priority for all brands. And during the holiday season with the anticipated increase in shoppers, and the rise in cases across the nation, retailers are taking extra precautions to keep everyone safe. For example, Bath & Body Works is providing all shoppers with hand sanitizer and disposable shopping bags prior to consumers entering the store. Additionally, they’ve created ‘walking patterns’ for shoppers to follow, have installed markers to keep shoppers distanced while browsing, continuously are wiping down the products with a disinfectant and are not operating at the full store capacity allowed to avoid an over-crowded in-store experience. And when possible, retailers have created a separate area for returns and exchanges (if the store layout allows for it). This also helps to minimize crowding with long lines.

In regards to the digital channels, brands are also focusing on safety and are reinforcing the measures they’re taking to keep shoppers safe in-store. In the email below from LUSH Cosmetics, they remind consumers of ‘the easy to follow steps’ to take when shopping in-store to keep everyone safe. And the ‘sixth bonus step’ is very much appreciated, especially during the holidays. “Be nice” is a simple statement, but it’s one that means so much and goes a long way.

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As you’re wrapping-up your marketing plans for holiday 2020 and being planning for future holidays such as Valentine’s Day and Easter, think of the learnings shared here to ensure you’re offering the best shopping experience for your customers. And remember, being flexible and adjusting your plans based on market needs is key.

Disclaimer:

Epsilon’s Shopper’s Voice is the largest self-reported database on the market including 20M households, 3M new respondents per year, 1.5M opted-in active email addresses and 1,000 data points. For this Epsilon research, Shopper’s Voice member households and third-party panel members were segmented by generation. A random selection by region within each generation was invited to participate in the survey. Targets were set to achieve close to a balance of male and female responders.

Epsilon Shopper’s Voice survey research on consumer sentiment was deployed from the timeframe of April 9 to October 22, 2020 in multiple waves. Throughout this time period, interviews were scheduled to check in with consumers as the situation rapidly evolved through recent weeks. A fluid cadence was applied to maximize agility. Question sets were adapted in each wave to build on the most recent learnings, to minimize survey length and therefore maximize survey experience for respondents, and to be more agile in addressing topics of interest to Epsilon’s clients. In addition to our direct client input on consumer sentiment, our strategy and insights team continues to track the weekly trends within the key industries shared in this report to ensure Epsilon is providing the most up-to-date insight on the COVID-19 pandemic.