Autumn is over and we are now getting into the holiday season where shopping is part of the festivities. Compared to other years, shopping for Christmas this year is going to be very difficult as the government and health agencies continue to encourage social distancing in public places. Both the retailers and the consumers will feel the impact of the pandemic as things continue to change hence the need for both parties to revolutionize their behaviors. Retailers should endeavor to make goods available to consumers who should in turn adjust to these changing times. Here are 4 ways how COVID-19 will affect holiday shopping:
1. Loss of revenue from impulse buyers
Research shows that about 35% of consumers are impulse buyers. Impulse buying is quite common during the holiday season. It happens when buyers walk into the store with a list of items that they wish to buy for friends and family and then spot something interesting on the shelves.
The language buyers use when buying an item they had not planned for is “to reward themselves.” Often, store owners know how to place these products strategically for buyers to see them. With numerous businesses going online, it would be difficult for retail businesses to attract buyers to purchase extra products hence loss in revenue. However, there are strategies that could be implemented to avert this. For instance, retailers could:
2. Reduce shopping expenses
COVID-19 has been stimulating unemployment in the last couple of months. Some people have already lost jobs and approximately half of the workforce globally is at risk of losing jobs. PEO services have reported a decline in the demand for workers as businesses continue to stagnate. These companies, such as Global PEO, specialize in the recruitment and management of employees for companies that are extending their business operations internationally.
With a reduced workforce, there is also a decline in the finances which influences people’s purchasing power. A recent survey shows that about 39% of holiday shoppers in the United States have the intention of spending very little compared to other years on gifts. Such drastic changes will reshape the way people celebrate this season’s holidays.
3. Reduced shopping morale
Shopping is part of the holiday festivities. It can be used to help a family bond as well as create memories from fun experiences at the store. Retailers often decorate their stores to enhance people’s shopping adventures. The themed decorations not only encourage people to make purchases but also remind people of the purpose of that particular holiday.
Suppose you were planning to take your kids for Christmas shopping this year and have them experience the joy of seating on Santa’s lap, this year it will not be possible. It will also be difficult to go ice skating at the rink and enjoy drinking with friends while shopping. Such limitations are bound to lower the shopper’s morale this year significantly.
4. Discovery of online shopping
While online shopping has been around for the last couple of years, a large percentage of shoppers still opt to buy products physically at the store. Since COVID-19 was declared a pandemic, there has been a surge in online shopping. A survey conducted among shoppers in the United States revealed that about 58% of the purchases were through online platforms in 2019.
It is anticipated that approximately 75% of the holiday shoppers will buy online in 2020 even as stores reopen. Additionally, most of the people are expected to browse for possible gift ideas online than the stores. Such a shift will promote e-commerce immensely. It is likely that after this move, some businesses will opt to go digital the way the likes of Alibaba did as a result of the severe acute respiratory syndrome (SARS) in China in the years 2002-2004.
The impact of COVID-19 is already being felt after many months of the closure of businesses worldwide. While some effects may be positive such as having more work for web developers, other people have lost their jobs entirely. The changes in people’s finances are the main drivers of this year’s holiday shopping behavior. The disease dynamics of the coronavirus will also determine how the holiday festivities will take place.