With the holidays fast approaching, retailers are gearing up for a season to remember. But it’s vital to remember that a return to “normal” might not take us back to 2019. Instead, successful brands need to capitalize on consumer behaviors that have emerged and re-imagine their in-store experiences to meet the psychological and behavioral shifts expected in the upcoming season.
By the end of this article you’ll understand how to address the evolution of consumers’ beliefs and behaviors, as well as three things you must do if you’re dreaming of a green—as in profitable—holiday season, including:
- Drive awareness of promotions and locations to optimize the output of brick-and-mortar and offset the operational costs related to eCommerce
- Meet new consumer expectations for curbside pick-up / buy online, pick up in-store
- Highlight core values and brand messages—and hyper-target based on customer segmentation
Table of Contents
Content Summary
Section 1: Holiday 2021 looks a lot different than holiday 2020
Shift 1: from purposeful to spontaneous
Shift 2: from navigating the in-person / digital hybrid to perfecting it
Shift 3: from self-gifting to community conscious
Section 2: Prepping for holiday celebrations
Tip 1. Drive awareness of promotions and locations to optimize the output of brick-and-mortar and offset the operational costs related to eCommerce
Tip 2. Meet new consumer expectations for curbside pick-up / buy online, pick up in-store (BOPIS)
Tip 3. Highlight core values and brand messages — and hyper-target based on customer segmentation
Wrapping up the best of holiday 2021
With holidays fast approaching, retailers are gearing up for a season to remember. Vaccines have propelled more people out and about and that translates to spending. The National Retail Foundation recently revised its 2021 forecast to a potential of 13.5% growth, up from an initial projection of 6.5%. Retailers are feeling the love. In one survey, 62% said a robust spring had returned their sales to pre-pandemic levels.
Yet, retailers know that a return to “normal” might not take us back to 2019. Instead, successful brands intend to capitalize on behaviors that emerged in 2020 and re-imagine in-store experiences to meet the psychological and behavioral shifts expected in the upcoming season. Here is what retailers need to know to prepare for a re-imagined holiday season.
62% of retailers said a robust spring had returned their sales to pre-pandemic levels.
Section 1: Holiday 2021 looks a lot different than holiday 2020
Consumers accepted new traditions and experiences in 2020 out of necessity, and retailers pivoted to meet those needs. But with cautious optimism, shoppers will celebrate the season in a heightened fashion, creating opportunities for retailers to embrace the evolution of consumers’ beliefs and behaviors. Here are three shifts to incorporate into holiday 2021 plans:
Shift 1: from purposeful to spontaneous
Last year, many consumers stepped out for carefully planned expeditions with trepidation. Rather than making impromptu stops to nab stocking stuffers here and extra baking supplies there, they made fewer trips with higher basket sizes.
Today, consumers have begun to return to one of their favorite pastimes, and retailers are anticipating enthusiastic buyers making impulse buys. “Customers are primed for discovery, and retailers can encourage these spontaneous trips and capture share of wallet by providing the right mix of products and services consumers seek today,” says Andrew Kandel, Director of Sales at Waze. “Digital out-ofhome advertising is an ideal way to reach these on-the-go consumers while they are near your location.”
The key is to attract their curiosity and draw them in. Retailers need to be mindful of shopping patterns, so as not to miss reaching key segments of their customer base, and the opportunities are vast. Waze has identified four distinct holiday shopping personas, based on their navigations to retail during pivotal holiday time periods on Waze. Roughly a quarter of shoppers fall into each of these personas:
- “Early Birds” complete the majority of shopping by the end of November.
- “Evergreens” intend to shop throughout the holiday season.
- “Super Savers” focus their holiday shopping between Black Friday and Cyber Monday.
- “Last-Minuters” do most of their shopping the week before Christmas.
“Digital out-of-home advertising is an ideal way to reach these on-the-go consumers while they are near your location.” – Andrew Kandel, Director, Sales, Waze
Shift 2: from navigating the in-person / digital hybrid to perfecting it
Brick-and-mortar sales enjoyed steady success in the last year, with consumers eager to shop in person. Surprisingly, 83% of holiday sales occurred in-store in 2020, with a 25% increase in shopper yield year-over-year.
While in-store will remain a favored shopping channel, consumers will also continue to embrace the convenience of click-and-collect, which has risen 78% since COVID-19, with 69% of consumers saying they anticipate using it at the same or higher levels, even once the pandemic subsides.
Click-and-collect has risen 78% since COVID-19,6 with 69% of consumers saying they anticipate using it at the same or higher levels, even once the pandemic subsides.
Shift 3: from self-gifting to community conscious
In 2020, consumers embraced self-care as a way to cope with continued bleak news, with 77% claiming they intended to splash out on treating themselves during the 2020 holiday season, an increase of 35% from the year before. Self-gifters had a relatively healthy budget, with 63% intending to spend $100 or more on themselves and 37% upping that to $250.
But today, consumers are viewing purchases through a more altruistic lens and are likely to support local businesses and those that align with their values in other areas, from sustainability to social justice. In fact, 67% of Americans say they would avoid buying certain brands based on the organizations’ stance on political or social positions, and 77% of Americans say it’s important that companies take environmentally responsible actions.
This subtle, but important, shift should inform retailers’ messaging, says Kandel. “Shoppers are looking for ‘more’ as they consider the greater impact of their purchases, whether it’s for a loved one or themselves.”
67% of Americans say they would avoid buying certain brands based on the organizations’ stance on political or social positions, and 77% of Americans say it’s important that companies take environmentally responsible actions.
Section 2: Prepping for holiday celebrations
Retailers can best position themselves to meet shoppers’ appetites with three key strategies. Meet the moment this holiday season:
Tip 1. Drive awareness of promotions and locations to optimize the output of brick-and-mortar and offset the operational costs related to eCommerce
Bringing consumers through the doors has a benefit beyond incentivizing shoppers to spend more on impulse purchases, as it also helps retailers mitigate the draining costs of other channels:
- In-store shopping minimizes the expense and hassle of returns; a Forrester study finds that only 8% of purchases bought in-store are returned, compared with 25% online.
- It eliminates the exorbitant shipping fees that retailers often shoulder to please the 75% of shoppers who expect free shipping.
- It allows managers to redeploy staff to more customerfocused activities than assembling orders, which will be important if the current labor shortages persist.
One-third of holiday purchases are made on impulse. While most shoppers load up their virtual cart based on an intentional list, unexpected items are bound to catch their eye as they browse physical aisles. For example, one-quarter of in-store clothing purchases are made on a whim, compared with just 16% online, says market research firm NPD Group Inc.
But sometimes shoppers need to be reminded that leaving the comfort of their couch is a better bet. These messaging themes can help encourage them to visit a physical location:
- They don’t have to worry about purchases not arriving. Who can forget the 2020 “ship-ocalypse,” when an estimated one million packages didn’t arrive on time?
- They can try before they buy, preferred by 46% of consumers.
- They don’t have to deal with a finicky website, as reported by 40% of consumers.
As retailers update their 2021 messaging game plan, they should also consider expanding their advertising windows. “As more people work remotely and flexibly, prime errand-running hours are extended and are no longer concentrated on weekends and evenings,” says Kandel. “Waze data shows a widening of dayparts as consumers shift their traditional work hours and patterns, which underscores the need for more frequent messaging.”
Retailers will find success with Waze solutions, such as Pins to drive location awareness for on-the-go holiday shoppers and full-screen Takeover ads that drive awareness of seasonal promotions, sales, events and more, coupled with turn-by-turn directions for easy navigation. They can also consider alternative CTAs, such as “remind me” or “save for later,” to re-engage with Wazers when they are no longer driving to remind them of offers or promotions that had piqued their interest.
“As more people work remotely and flexibly, prime errand-running hours are extended and are no longer concentrated on weekends and evenings. Waze data shows a widening of dayparts as consumers shift their traditional work hours and patterns, which underscores the need for more frequent messaging.” – Andrew Kandel, Director, Sales, Waze
Tip 2. Meet new consumer expectations for curbside pick-up / buy online, pick up in-store (BOPIS)
Consumers heavily embraced click-and-collect in 2020, with BOPIS making up 25% of holiday purchases, an increase of 40% from 2019 holiday levels.
While that rise may have been largely due to safety concerns, many consumers discovered they appreciated the convenience of remaining in their cars to pick up purchases they knew would be in-stock with contactless delivery. And retailers found this method allowed them to achieve savings by avoiding costly last-mile delivery.
Consumers heavily embraced click-and-collect in 2020, with BOPIS making up 25% of holiday purchases, an increase of 40% from 2019 holiday levels.
But consumers expect the click-and collect encounter to be perfected this year. That means retailers have to ensure a seamless end-to-end experience, including:
- Improving turnaround time and notifications with frequent communications: confirm the order; update the pickup time; outline the procedure; and specify when the order is prepared.
- Prioritizing order accuracy as missing items, cancellations or substitutions negate the convenience factor of BOPIS. Upgrade systems to provide transparency into inventory availability by syncing online and offline options.
- Optimizing the procedure, including cross-training staff; upgrading signage to clearly inform shoppers where and how to retrieve their orders; and creating an intuitive traffic flow that allocates plentiful safe parking availability for curbside pick-up.
- Employing ad solutions that indicate the availability of store features such as Waze Location Personalities badges which alert customers of specific locations that offer convenient omnichannel experiences. 91% of clicks on Location Personalities badges indicating the availability of store features, like curbside pick-up, were followed by a click on a branded search result.
Tip 3. Highlight core values and brand messages — and hyper-target based on customer segmentation
With consumers actively seeking brands that prioritize corporate social responsibility, retailers of all sizes can play up their local ties; diversity, equity and inclusion efforts; and charitable components. Not only is it the right thing to do, it can drive repeat business: 28% of consumers say they would pay a premium to buy from brands they trust, and 57% of buyers say they seek out local, independently owned businesses, including 63% of those ages 18 to 34 and 64% of parents.
Stores can consider merchandising gift ideas with an eye toward highlighting those with a local or diversity component, suggests Kandel. “I’ve noticed several large retailers incorporating accessories and items like throw pillows, jewelry or candles from local artisans or diverse suppliers. Retailers can allocate a certain amount of shelf space to these smaller brands to help create ties to the local community and fulfill consumers’ desire for more purposeful shopping.”
28% of consumers say they would pay a premium to buy from brands they trust, and 57% of buyers say they seek out local, independently owned businesses.
They can even partner with a local nonprofit to promote their cause and return a portion of profits back to the community. “These types of partnerships can create a halo effect that makes a shopper feel more satisfied with their gift items or the inevitable self-purchases,” says Kandel.
Other messages that will resonate this season harken back to the concept of “hearth and home,” as families embrace the opportunity to safely gather together. Forget the “forced family fun” that might have been part of past celebrations or last year’s virtual celebrations that fell a little flat. This year, families and friends will revel in the togetherness the season will provide, and retailers can capitalize on that return to inperson celebrations by showcasing home and table, along with food and beverage, in a way that’s inspiring, fun and easy for consumers.
They should ensure ample in-store signage to spotlight merchandise focused on these positive trends and augment it with digital out-of-home solutions to reach the shopper who’s looking to make a purchase that means more. “Stores can leverage Waze solutions, such as Pins and Takeovers, to share creative messaging that incorporates these themes, and Location Personality badges indicating the availability of store features. Shoppers will reward you for promoting merchandise that encompasses inclusivity or helps consumers make their lives a little easier and more enjoyable,” Kandel says.
Finally, remember the importance of timing to help the four types of shoppers find what they need. Start conveying the excitement of holiday shopping now for those “Evergreen” and “Early Bird” shoppers, while preparing to make life easier for the “Last Minuters” and hitting the bargain message hard for those “Super Savers.” Create the right space to capture all types of shoppers and then prioritize creative messaging to drive more sales.
“These types of partnerships can create a halo effect that makes a shopper feel more satisfied with their gift items or the inevitable self-purchases.” – Andrew Kandel, Director, Sales, Waze
Wrapping up the best of holiday 2021
Consumers this year are cautiously optimistic about the prospect of fully returning to in-store shopping. As the holiday shopping frenzy approaches, retailers can begin to plan by tapping into the current spirit and adapting to consumer behavioral shifts.
With 77% of retail marketers saying they expect digital out-of-home to increase sales volume, shouldn’t you be the beneficiary of this renewed energy?