Festive shopping

Over the last six months, Covid-19 has wreaked havoc on many aspects of people’s lives, with many having to adapt to a ‘new normal’. One area that has been significantly impacted due to the virus is the retail industry. Since the pandemic, people have been shopping differently and this is expected to continue into the most important shopping season of the year – the festive period. Christmas, and more recently in the UK, Black Friday, are key dates in the retail calendar. So how are customers feeling about the upcoming holiday shopping season and how are retailers responding to this?

Low consumer confidence could lead to retailers offering larger discounts to encourage spending   

Consumer confidence has slowly started increasing since the massive dip in April. However, it’s still much lower than anything we’ve seen over the last 5 years, and with unemployment predicted to affect 2.5 million people in the UK by Christmas, it’s no surprise that consumers will be cautious in how much they are spending in the lead up to the holiday. Financial worries will be a top concern for many across the UK as people over the last few months have lost their jobs, businesses have had to shut down and many have had to rely on Government help to get through the period.  Whilst people will likely be less excessive with their spending this holiday season, retailers will react to this with large discounts and offers to incentivise spending. There have already been many promotions this year in a bid to encourage spending, so retailers will be under extra pressure to provide bigger and better offers. People often wait for Black Friday to start their Christmas shopping so this could be set to be an even bigger event than usual to kick-start the season, with 24% of consumers planning to shop for Christmas earlier this year and a third hoping to get a Christmas bargain on Black Friday.

Fears over catching the virus will make online shopping more attractive

Health concerns over catching Coronavirus and strict social distancing rules in shops could mean that people will avoid stores this year. Instead, many will turn to online shopping. Retailers will need to fulfil this demand by having more sales available online rather than many who historically host their best offers in-store only. The threat of a potential second National lockdown is also likely to play into this, as if this does go ahead and retailers are forced to shut down as ‘non-essential’ businesses, an online presence could be the only way they’re able to trade. Online sales are forecast to be 30% higher for the peak festive trading season, but if stores have to close this could be more like 50%. Companies need to be ready for this surge in demand and they’ve already started planning for this. Delivery firm Yodel have 2,500 drivers and 500 staff in sorting centres across the UK in anticipation of this increased demand, whilst Amazon have announced they have created 20,000 temporary roles for the festive period.

 

A potential second lockdown could spark panic buying

Panic-buying hit UK stores earlier this year with empty shelves in supermarkets an all too familiar sight in Spring as people stocked up on essential items. With a recent rise in Coronavirus cases and a potential second National lockdown looming, this desire to stock up is expected to hit UK supermarkets again and even extend to retail stores ahead of the festive period. Retailers have encouraged the public to buy Christmas presents early this year to avoid disappointment for gifts that may sell out quickly. Retailers will want to spread sales out over a longer period of time to ensure they can fulfil demand, as back in March panic buying massively impacted the supply chain. Asking the public to start shopping early could also be a way for retailers to maximise their offer period for as long as possible, with many already confirming earlier sale dates such as Amazon and Curry’s, extending their deals for as long as possible to make up for a difficult year of trading. With these sales on offer, people are expected to start their Black Friday and Christmas sales earlier than ever; with research from Klarna and Retail Economics showing that Christmas spending is expected to be brought forward this year, leading to a bumper black Friday.

Black Friday

Will Coronavirus steal Christmas?

Whilst Covid-19 will mean that the lead up to Christmas isn’t quite what we’ve all been used to, it will still very much be taking place and people and businesses alike will continue to develop and adapt to this new way of living!

Katie Sofokleous - Account Manager

Author:Katie Sofokleous - Account Manager

Katie joined the UK Client Services team in March 2020. You can usually find her binge-watching a series, in a gym class or searching for her next beach holiday!