Ahhh, the holidays. The most exciting time of year for consumer brands and retailers. It’s a time when businesses breathe a sigh of relief as the balance sheets turn from red to black, and visions of frenzied shoppers dance in their heads.
But this year’s holiday shopping season, much like 2020’s, will have lots of surprises in store, some of which bode well for consumer brands selling on Amazon, Walmart.com and their own direct-to-consumer sites, and some that might throw significant challenges into the mix. Let’s take a look at some of the forces at play.
1. Consumers will continue to pivot to online shopping, despite the predictions that in-store shopping would rebound this year. eMarketer predicts total US holiday retail sales in 2021 will rise 2.7%, and ecommerce sales will rise 11.3% to $206.88 billion. The total percentage of retail ecommerce sales are expected to grow to 18.9% of total holiday retail sales, up from 17.5% last year. With the surging Delta variant, it’s likely that consumers will be wary of in-store shopping and resort back to the convenience and safety of shopping online.
2. Predictions of a second Prime Day on Amazon in October has industry analysts abuzz about the potential for an early kickoff to the holiday shopping season and an additional big sales driver ahead of Black Friday and Cyber Monday. Last year, Amazon postponed Prime Day until October because of the pandemic, but in 2021, they brought it back to the traditional summer timeframe. A second Amazon Prime Day this fall could mean an extra opportunity to take advantage of increased traffic and catch the attention of new customers who are hunting for deals.
3. Worsening supply chain issues may wreak havoc at a time when consumer demand is highest. Labor shortages due to workers out sick with COVID or too scared to come to work is disrupting manufacturing around the world. And port congestion could leave some retailers without inventory heading into the holiday season. “The chances of your vessel arriving on time are about 40%, when it was 80% this time last year” Bob Biesterfeld, the CEO of C.H. Robinson, one of the world’s largest logistics firms, recently told CNN.
Already, we’re seeing recommendations to shoppers that they start their holiday shopping early. We’ve always advised our brand partners to ramp up their advertising efforts in October, but this year, with shoppers trying to get ahead of potential shortages and primed to take advantage of any and all online deals, it could make sense to start even earlier this year to get ahead of consumer demand. So for brands looking to take a breath in between back-to-school promotions and the holidays, 2021 might be the year to keep the momentum going non-stop.