Social distancing, stay-at-home orders seen influencing consumer habits during holiday shopping season

October 19-25, 2020

By Daily Record Staff

A highly watched national study shows that the ongoing health pandemic has dramatically altered the way Americans will shop for Christmas gifts this holiday season as social distance and stay-at-home orders continue to weigh on consumer behavior.

According to the International Council of Shopping Center’s (ICSC) Annual Holiday Shopping Intentions Survey, released on Oct. 8, consumers are expected to provide a boost for retailers this holiday season, a 1.9% year-over-year with total spending to exceed $862 billion. The annual survey also found that the average adult is planning to spend $655 on holiday-related items – surpassing 2019’s actual expenditure.

“Despite the difficulties the economy has faced, consumers are looking forward to the holidays and plan to spend just as much as in previous years,” said Tom McGee, President and CEO of ICSC. “We expect to see an increase in online shopping activity which means that those retailers that have implemented an aggressive omnichannel strategy will likely do well during the holiday season.”

The study found 94% of adults plan to make holiday-related purchases this year, and 73% anticipate spending the same or more this holiday season. Due in part to the COVID-19 pandemic, consumers have come to expect click-and-collect and curbside pickup at their local retailer. Another 53% will leverage these alternatives throughout November and December, the survey said.

Nationally, E-commerce is forecasted to grow by 25% this holiday season, which unofficially kicked off this weekend (Oct. 13) with Prime Day and pre-Black Friday sales event by Amazon and Target, respectively. Ninety-four percent of U.S. adults will spend in-store and online at retailers with a physical store presence, and 81 percent expected to spend in a physical store – citing a desire to see and touch products (40%), the immediacy of brick-and-mortar purchases (38% and better prices or sales (33%). However, 66% of respondents said they are more likely to visit stores that have strict precautions in place, like mask requirements, one-way aisles, contact barriers, occupancy limits and other similar protocols.

ICSC said it anticipates the shopping season will be longer this year, with 77% of respondents expecting to start earlier than they normally would. More consumers are planning to start their shopping before Thanksgiving Weekend than in the past, with 67% saying they’ll begin before Thanksgiving Day – and 23% as soon as October – as they look to take advantage of early sales and avoid shipping delays, crowded stores or out-of-stock items. Forty-three percent of adults expect shipping and delivery delays to pose challenges throughout the holidays.

“Consumers have been spending less this year due to the mandates put in place related to the pandemic. As a result, they are looking to spend some of that money on holiday items,” McGee added. “Even with the additional dollars, shoppers will still be looking for the best sales and prices retailers have to offer.”

Deals and promotions will remain an important part of retailers’ strategy this holiday season, with 47% of consumers saying they plan to start earlier to take advantage of sales, and 25% reporting sales provide incentive to spend more. Overall, 80% of shoppers say deals play a role in their holiday purchases and 38% plan their shopping around specific promotional events.

Additionally, ICSC’s survey found that, due to COVID-19, 54% of shoppers plan to purchase more from small businesses, and 49% expect to contribute to more philanthropic causes than they have in prior years.

The survey also found discount department stores will be the most-visited type of retailer (57%), followed by traditional department stores (34%) and electronics stores (31%). When choosing where to shop, respondents were most influenced by prices and promotions (45%) and the variety of products offered (26%). This year, 22% say health and safety precautions have impacted their decision.

“Forecasting spending and consumer behavior is difficult this year. Legislation around additional stimulus funds as well as changing government mandates resulting from a shift in the virus could significantly alter spending in one direction or another,” said McGee.

Wholesale clubs adapt to ‘new normal’

Bentonville-based Sam’s Club, the membership warehouse arm of Walmart Inc., said it has been preparing all year long for the shift in consumer shopping habits during the upcoming holiday season. In response to a survey of its own members regarding holiday shopping plans, 61% said they would be shopping more online this year, and 31% said they would be shopping earlier than past years. 

To accommodate those changes in consumer buying habits, Sam’s Club said it is enhancing its member shopping experience by adding more days of deals, introducing new items more often in clubs and online, and planning unexpected moments that delight shoppers throughout the season. 

The Arkansas discount wholesaler is also hiring and additional hired 2,000 supply chain associates to support the expected online demand. All fulfillment center hourly associates will also receive a $2 hourly bonus during the holiday season. 

“We take our cues directly from our members, and they’re telling us they’re ready for and excited about holiday shopping this year,” said Megan Crozier, Chief Merchandising Officer, Sam’s Club. “Our merchants are making this holiday extra special for our members across categories – from food and holiday décor to one-of-a-kind gifts – with more high-quality items at amazing members-only values, and special experiences they can’t find anywhere else.”

Like its larger sister company, Walmart Stores Inc., Sam’s club is also kicking-off the start to its holiday shopping season more than a month ahead of the traditional Black Friday and Cyber Monday events after Thanksgiving Day, which occurs this year on Thursday, Nov. 26.

As COVID-19 cases continue to spike well into the fourth quarter, Sam’s Club said its members will be able to shop online and pick up at their club at all 597 locations. Launched earlier this year, curbside pickup is the latest contactless shopping offering, along with the club’s “Scan & Go” technology that allows customers to shop, pay and checkout without any human interaction.

Throughout the holiday season, the Bentonville-based wholesaler said it will offer its members special interactions with celebrities and experiences that play on nostalgia and fun, all while leveraging its social media channels in new ways.

“COVID-19 has changed how our members shop and the experiences they desire,” said Tony Rogers, Chief Member Officer, Sam’s Club. “We’re listening and evolving our approach to meet their needs. Our members are in for something special this season with the great surprises we have planned.”

Likewise, Sam’s Club rival, BJ’s Wholesale Club in Boston, kicked off its holiday sales event this weekend, offering limited-time deals on electronics, small appliances, toys and other in-store and online merchandise.

“The holiday season is going to look different this year, so we’ve made saving seamless with earlier-than-ever deals and more ways to shop,” said Molly Cox, senior vice president, general merchandise, BJ’s Wholesale Club. “Whether our members choose to shop from their couch or in-club, we’re offering convenient and safe shopping options. Plus, we’re extending our savings throughout the season so members can get their holiday shopping done wherever, whenever.”