Holiday Trends 2021: What Retailers Can Expect in the Coming Months

It might be a healthy holiday for retailers in 2021—so long as you have a plan in place. Customers are looking to spend more this year, and they might head in store to do it. Between concerns over shipping and scalpers, many shoppers could head back into the open arms of in-store retailers. So what should you expect in 2021? We discuss below.

Forecasts Show Increased Year-over-Year Spending

One of the biggest highlights for retailers in 2021 is this: Consumers are expecting to spend more.

CNBC reports that a variety of firms are predicting a sharp jump in year-over-year spending. Bain sees 7% year over year growth in November and December 2021. Deloitte sees holiday retail sales climbing 7% to 9%, better than the 5.8% increase it tracked in 2020. MasterCard believes holiday retail sales should rise 7.4% from a year earlier and climb 11.1% on a two-year basis.

Add this to predictions from global retail bank, payments and shopping service Klarna, who sees 34% of shoppers planning to spend more on gift-giving this year than they did last year, and many retailers feel confident about the coming season.

A Return to the Store?

Perhaps one of the biggest surprises from the Klarna report is this: 30 percent of Klarna respondents expect to shop primarily in store and another 27 percent plan to split their time in store with their time online.

But even with the digital push continuing from 2020, many could return to the store in 2021. Why? It all comes down to sales and shipping.

The Allure of Availability and a Good Bargain

Klarna notes that one of the biggest drivers of in-store shopping this year will be the availability of discounts. 2020 left the in-store shopping experience lacking. Retailers carried less inventory last year. They held fewer sales to reduce the massive influx of customers. Consumers were hesitant to deal with crowds, capacity limits, and cold weather.

But many retailers are expecting a modest increase in the number and depth of discounts this year. Consumers burned by scalpers last year might turn to stores for in-demand gifts. Add this to another major trend, and retailers might want to plan for a bit more foot traffic this year.

Shipping Challenges Could Drive Customers Back In Store

2020 gave both online and traditional retailers a host of new challenges to tackle. Fear over the coronavirus pandemic sent many customers online, left many retailers limiting their inventory, and resulted in fewer in-store promotions. In turn, customers opted to do most of their shopping online.

Pair this increase in shipping with an election relying heavily on mail-in ballots, and many in the last mile found their shipping capacities overwhelmed.

Though 2021 might not have ballots, shippers are already planning for a boatload of problems. In fact, it’s not just one boat, satellite imagery shows that there’s a backlog of approximately 80 cargo ships waiting to offload at California’s Long Beach Terminal.

How Consumers Plan to Shop

With a healthy number of customers looking to make purchases in store, the next question—where will they go and who should you expect to see?

They’ve already Started

People lament retailers for putting up holiday displays in October, but customers have already started shopping. Klarna notes that 40% of shoppers are planning to get an earlier start this year than they did last year. 22% plan to get started before Black Friday. Another 22 percent have already started.

Don’t miss out on the opportunity to plant the seeds of holiday shopping now, even if it doesn’t mean putting snow on your Halloween displays.

Big Plans for Bix Box Sellers

Of those who intend to shop in store, Klarna sees big-box retailers (62%) as the hottest place to shop this holiday season. Combining convenience with choice, customers are likely to supplement their regular shopping with a visit to the toys and electronics section.

Malls Make the List

One of the bigger surprises of the report is that customers—especially Gen Z shoppers—are looking to head to… the mall. In fact, the Klarna report found that among all customers, 34% intend to head to the mall this season, with 44% of Gen Z shoppers planning to head there and 38% of millennials aiming to do so.

Technologically Connected—Don’t Ignore the BOPIS

Shipping delays might push customers in store—but it might not be to browse. Buy online, pick up in store (BOPIS) is likely going to be the way for customers to address this. Accurate inventory numbers and flexibility will reign. But just remember, labor shortages aren’t stopping—so make the most of the time a customer might have to wait in line to pick up online orders.

Get them feeling the holiday spirit with a well planned entrance display, support additional sales with impulse gift buys in the queue, and leave people feeling holly-er and jollier than when they got there.

Creating an Unforgettable Experience for Customers

From capturing the essence of the holidays to creating a space that can drive impulse buys among BOPIS shoppers, the right approach and displays this holiday season can make all the difference.

With roots dating back more than 75 years, the Morgan Li team has specialized in taking our retail and hospitality clients’ plans from concept to rollout, matching specifications and smashing expectations. Whatever you’re looking to make, whatever experience you want to create, we’re here to make it happen. Fixtures, furniture, and graphics; Morgan Li has the craftsmanship and capabilities to deliver on time and on budget. Get to know more about who we are, how we work, and who we’ve helped—and contact us to request a quote.