What the holidays taught marketers about retail in 2021 (and beyond)

It’s an important statistic because by understanding what happened during the peak shopping season, retailers and marketers can learn a lot about the state of the retail industry and what’s in store for the future. 

To further unpack the patterns at work, Criteo reviewed its 2020 holiday data and developed three predictions for 2021, along with recommendations for how retailers can meet their consumers’ changing needs.

Prediction 1: Consumers will continue to buy early during major seasonal periods

Typically, Black Friday and Cyber Monday are the kickoffs to the holiday shopping season. But 2020 took a different trajectory. According to Criteo data, U.S. e-commerce sales were down 5 percent year-over-year on Black Friday. But that’s far from the whole story; the data also shows that sales for the first three weeks of November were up 7 percent in the U.S. What this suggests is not that consumers are shopping less, but that they are shopping earlier than they have in years past.

One reason for this? Major shipping delays. 

In September 2020, Salesforce predicted that packages shipped by traditional delivery providers (FedEx, UPS, etc.) would exceed capacity by 5 percent across the globe between mid-November and Christmas. That amounted to 700 million packages at risk for missing holiday arrival. But the shipping woes of 2020 are far from a thing of the past. USPS is still dealing with a backlog of packages from the holidays several weeks into January and dealing with the return season, which will last several more weeks. 

And while e-commerce does tend to slow at the end of January, the seasonal periods of Valentine’s Day and President’s Day are right around the corner. Expect that consumers will shop earlier than usual for these holidays — and others in 2021 — to avoid the holiday headaches they may have experienced in 2020 . And so, marketing teams should plan promotional calendars accordingly.

Prediction 2: Shipping delays won’t affect promotional periods alone

While consumers have certainly become increasingly comfortable with online shopping in 2020, many still miss the in-person shopping experience. In May, 64 percent of consumers told Criteo that they miss going to physical stores. One reason for this, especially around the holidays, was the instant gratification to which in-store shopping lends itself. 

But consumers also found a way in 2020 to avoid shipping delays, shop safely and get their gifts on time. That solution was click-and-collect. At the beginning of 2020, eMarketer predicted that $50.66 billion in sales would transact via the click-and-collect format. By the end of 2020, that forecast had increased to $58.52 billion, an increase of 15.5 percent over the original estimate. With shipping delays still plaguing the USPS, it’s safe to predict that click-and-collect will continue to be a preferred shopping method for the 2021 consumer. 

For retailers with physical brick-and-mortar stores, the response should be to advertise the availability of click-and-collect, particularly in the days leading up to major seasonal periods.

Prediction 3: E-commerce is here to stay across categories

Before the pandemic, one of the most popular e-commerce categories was apparel and accessories. In fact, in 2019, nearly 40 percent of all apparel sales in the U.S. took place online. But with more and more Americans staying home in 2020, consumers had less need for new clothing, and sales plummeted.

eMarketer forecasted a drop of nearly 22 percent in 2020 for total apparel sales and a significant deceleration in apparel e-commerce sales. But there is some good news: Criteo data from December 24 to December 31 shows that apparel sales were only down 4 percent year-over-year, suggesting some new consumer confidence (potentially correlating with the start of COVID-19 vaccine distribution). But that’s not where the good news ends for online retailers. While categories such as apparel, which suffered in 2020, look likely to bounce back in 2021, other categories that made major e-commerce leaps in 2020 will sustain those heights this year as well.

Early in the year, the pandemic directly correlated with a boom in online purchasing of everyday categories like food, beverages and pet supplies. Back in March, Criteo data in the U.S. showed that online sales of pet supplies like cat food and small animal supplies were up 2–4 times their January levels. One theory about why this happened was that consumers were stocking up, much as they had on toilet paper and hand sanitizer. But online pet supply sales remained strong throughout the year, up 38 percent year-over-year the week of December 24 to December 31. Food, beverage and tobacco online sales were up 102 percent year-over-year.

We can conclude that with nearly 10 months of intense online buying experience behind them, many consumers have begun to rely on online retailers for everyday purchases like these. That trend should continue in 2021. For retailers whose everyday e-commerce categories include groceries and other consumables, their marketing strategies shouldn’t shy away from advertising those items in 2021.

While the world hopes that 2021 will look far different from 2020, retailers and marketers should also expect that not everything will go back to the way it was pre-pandemic. As the data shows, it is possible to determine which trends are fleeting and which ones are here to stay for the long haul — and help deliver a happy, healthy and successful 2021.