Four ways holiday shopping has changed since the pandemic began

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  • This holiday season is going to look very different for the retail industry and consumers.
  • Businesses are ready to greet more customers at the store.
  • E-commerce growth is expected to slow, but should cross the $200 billion mark for the first time.
  • Consumers have a new way to cover vacation costs: Buy now, pay later with payment plans.
  • More money will be transferred to spend on experiences rather than tangible items.

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As holiday shoppers gear up for festivities, they are preparing for a season that will look vastly different than it did a year ago.

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Big parties with family and friends. Busy shopping center. A trip to see Santa. Perhaps, an escape even in hot weather. Consumers are revisiting these holiday rituals as much as possible. About three out of every five Americans are vaccinated against COVID-19, and the pace of new coronavirus cases has slowed at the rate of summer growth, giving people more confidence to return to their holiday traditions. .

Still, not everything will be back as it was before the arrival of Covid.

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Shoppers have formed new habits, and new concerns have emerged. Factory closures, overcrowded ports and a lack of workers can mean that the selection of gifts can be limited and consumers can easily miss out on what they expect of a toy or gift. Prices may also inflict some sticker shock.

Consumers will likely smartly switch between online and in-store purchases, and take full advantage of methods like curbside pickup. (Though this holiday, convenience — not crowd avoidance — will drive the decision.) The store has shed massive layoffs, but other ways have emerged for cash-strapped consumers to finance their holiday purchases.

“Black Friday is not going to be like any other,” Macy’s CEO Jeff Gennett told analysts on an earnings call Thursday. “We are closed on Thanksgiving Day, which is a big change from where we were in 2019. But we expect our digital business to track very strongly throughout the holiday… and for all of the traffic we expect ready. going to start [in stores] 6:00 a.m. the day after Thanksgiving.”

Here’s a closer look at some of the ways this holiday season is expected to look different than it did in the past:

slow e-commerce growth

Holiday e-commerce sales have grown at least a mid-teens clip from a year ago for as long as Adobe Analytics is keeping tabs. This year, that is set to change.

According to Adobe's Digital Economy Index, online sales in the United States are projected to increase 10% to $207 billion. This follows a largely pandemic-driven runup of 33% last year. Adobe is tracking more than 100 million products online across 18 product categories across the Internet.

Vivek Pandya, principal analyst at Adobe Digital Insights, said, "There are a lot of macroeconomic factors here ... that could drive consumers to move from online shopping to offline shopping."

He said stories about supply chains and backlog ports are contributing to more people shopping in stores rather than online, when possible. And after the unprecedented jump in e-commerce spending last holiday season, it was likely that growth was slowing, Pandya said. Still, Adobe predicts that this will be the first holiday where online spending will top the $200 billion mark.

shopkeepers return to the stores

Thinking about going to the mall on Black Friday? you're not alone. Stores are going to be a lot busier than they were a year ago, as shoppers' anxiety about leaving the house has reduced significantly.

The National Retail Federation said it estimates almost 2 million more people Will shop from Thanksgiving Day to Cyber ​​Monday, even though 61% of shoppers have already started buying gifts. The retail trade group worked with Prosper Insights & Analytics to poll 7,837 adults on their plans and progress as of November 1-10.

The NRF said that on Black Friday, 64% said they expected to shop from the store, up from 51% last year.

The ICSC, a trade organization representing the shopping mall industry, conducted its survey of 1,005 people from September 24 to 26 and heard that half of US consumers plan to make more trips to stores to shop for gifts this year. Last year, 45% said they planned to go to the mall.

Consumers cited being able to touch and feel the products they want immediately, and as top reasons to visit to browse gift ideas. More than three-quarters said they plan to visit the mall to grab a bite to eat or avail other services at the mall.

"Vaccination rates are improving in some of our areas, and especially in California," said Jean-Marie Tritant, US president of Unibel-Rodamco-Westfield, owner of the Global Mall. "So people feel even more comfortable coming back to places where they can gather."

Buying Gifts Now, Paying Later

Gone are the old school days of layaway. Consumers have a new way to cover vacation costs: Buy now, pay later with payment plans.

The use of installment payments is expected to boom in popularity this holiday season. These services allow a buyer to purchase an item, take it home immediately, and pay in fixed increments. On the other hand, takeaway requires a retailer to reserve an item and put that purchased item away for the consumer.

BNPL has become more mainstream as retailers including Macy's, Walmart and Target strike deals with companies such as Affirm, Australia-based Afterpay and Sweden's Klarna.

According to data from Adobe Analytics, Buy Now, online revenue through payments is up 10% compared to 2020 and 45% higher than in 2019. One in four respondents to the Adobe survey said they have used BNPL plans in the past three months, with apparel, electronics and groceries as the top three categories, respectively.

Capturing Memory-Building Moments

Spa days. Dinner at a fancy restaurant. Tickets for a concert.

Those gifts are returning to wish lists this year, as consumers feel more comfortable being around other people and crave experiences they've missed.

About 43% of consumers plan to redirect their spending to experiences and service gifts this holiday season, according to a holiday shopping survey by consulting firm Accenture in August of nearly 1,500 US consumers. The survey found that 53% of millennials and 50% of Gen Z said they are redirecting to more experiential spending.

Nearly 70% of respondents plan to purchase the same or more restaurant gift cards this holiday season compared to last year, and 47% plan to purchase the same or more beauty products or services as gifts, such as manicures.

Travel-related gifts, in particular, are on the wish list. According to the survey, forty percent of older millennials – consumers between 32 and 39 – plan to buy travel vouchers or flight tickets for others during the holiday season.

"It's going to take a lot of work to overcome this," said Jill Standish, head of retail industry group at Accenture.

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