‘Tis the season for spending, and marketers in retail and travel are hoping for lots of sales under the Christmas tree. Signs point to a return to normalcy this year, or at least partially, with in-store sales projected to increase 15% compared to the 2020 holiday season, according to the CMO Council report, Gaining Lift From The Consumer Shift.
But it’s not all sweetness and light.
Many of today’s pandemic-weary consumers have lost their sense of loyalty to brands. Who can blame them? They’ve spent the last 18 months hunkering down in their homes, researching online, and comparing prices and availability. Shopping has become an impersonal exercise done in isolation, even robotic — or rather, chatbotic.
Before we get into that, though, let’s have a little holiday cheer. Here are some season-greetings sales predictions from Commerce Signals, which analyzes week-by-week changes in the spending behavior of U.S. consumers based on anonymized credit and debit card payment data for some 40 million households, in the CMO Council report:
- U.S. consumer card spending will increase 12% this holiday season versus 2020, driven especially by consumer travel spending, which is expected to rise some 91%.
- Restaurant spending is forecast to be up 43%, while retail spending will grow 2%.
- Department, clothing and home furnishing will lead the growth in holiday retail sales.
“Consumers are going to be consumers. Spending shifts, but it doesn’t stop,” says Nick Mangiapane, CMO of Commerce Signals. “Very quickly, we saw spending pick up in a variety of categories, such as sporting goods, food stores, furniture stores and mass discount stores like Walmart and Target.”
Not every retailer, though, will revel in this rise in sales. For marketers who fail to personalize and provide the right products at the right time, they’ll receive a lump of coal in their stocking — that is, brand abandonment. According to McKinsey, among 60% of shoppers who faced out-of-stock products in the last three months, 70% switched retailers or brands instead of waiting for the products to come back in stock.
“With many shoppers intending to buy early and not wait for out-of-stock items to be replenished, retailers must compete harder for customer loyalty, in addition to managing the supply chain and labor challenges spurred by the pandemic,” says McKinsey in a report U.S. Holiday Shopping 2021: Strong Demand Meets Big Challenges.
With only a couple of weeks left in the holiday season, it’s a little late for marketers to make last-minute moves to improve customer loyalty. However, shopping trends highlighted during the holidays aren’t going away. Marketers can learn a lot about consumer behavior and put into action some best practices for next year.
The CMO Council sums it up best in its report: “The lessons of the COVID pandemic are many. But chief among them is the critical need for brands to be able to pivot quickly based on the changing needs and requirements of customers. Understanding where consumers are today and where they are going tomorrow, based on timely access and predictive analysis of data, will be essential to business and marketing success in the months ahead.”
This article first appeared in cmocouncil.org
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