It’s been a wild year for retailers. The homestretch of 2020 finds most of them hoping to over-perform and make up for time and money lost to the COVID-19 crisis. Do American consumers have enough left in the tank (and the bank account) to provide a much-needed boost to holiday shopping? Let’s examine that question by looking back to October.
Did Brands Show Up in October?
Brands showed up in a big way and, using Amazon Prime Day as their catalyst, they tended to be highly promotional in their approach. Our data showed a 17% increase in retailers offering deals that coincided with Prime Day, including roughly 350 on RetailMeNot alone. Many of those deals were at Black Friday levels and brands built awareness in a variety of ways, from previews to look-books and “what’s hot” toy guides. Online sale continued to outperform in-store, hardly a surprise given COVID-era trends.
Did Consumers Show Up?
Despite all the stress and uncertainty, we know shoppers are feeling, they showed up in strong numbers, particularly online. One key indicator: Prime Day sales were an astonishing 45% higher than in 2019. Broader retail benefitted from that, too. RetailMeNot helped our partners grow a total of 29% vs. last October during Prime Day. We also saw growth in demand for many of the retail keywords we track, an encouraging sign.
Who Shopped and What Did They Buy?
We saw people from a broad range of demographic and income levels shopping in October. In terms of categories, we saw a lot of shopping for one’s self (accessories, shoes, health and wellness) and for pandemic-related categories (office supplies, indoor cycling and delivery services).
There was continued interest in tips and advice like how to celebrate birthdays and Halloween during the pandemic. And we saw browsing for things like hot holiday toys and advent calendars for adults. Our overall takeaway was that people turned out in October, but many are deferring holiday gift buying until later in the season.
What Did We Learn?
At this moment, the burning question for retailers becomes: What did we learn from October, and how can we apply that knowledge to sharpen our plans for the rest of the holiday season?
Let’s cheers those retailers on with one initial thought: While shoppers showed up to take advantage of October promotions, a whole lot of holiday shopping is still to come. How can you get their attention—and their business—as the season unfolds?
- Value continues to be critical, given lingering economic uncertainty. Our research suggests that four out of five (80%) shoppers will take an action to save money on their holiday shopping this year. We already saw this play out with the growth in Prime Day. Consumers will continue to look for deals, lower price points and overall affordability.
- Inspiration matters more this year than ever before—and this means online experiences as well as in-store moments. Brands that curated gift idea recommendations and made it easy for shoppers to convert were able to inspire and capture early sales. We likewise saw good engagement from the curated gift guides we created. Lowe’s and Amazon stand out as two brands that did the same with a high degree of effectiveness.
- Active promotions need to be front and center. RetailMeNot data suggests that retailers that had coinciding discounts with Prime Day saw a 19% lift in CVR and a ~60% lift in sales compared to their October run rate. Those who didn’t had no lift.
Winning Retail Strategies
With Prime Day behind us and holiday shopping in full swing, brands have every chance at success as they wind down the year. The key? Strategies and tactics that maximize opportunity by properly meeting the moment. Here’s a speed round with a few ideas:
- Think omnichannel: Meet customers where they are most comfortable.
- Adopt a conversion mindset (think flash sales or surprise and delight) to compensate for previous under-performance.
- Capitalize on tentpole shopping events (hello, Black Friday and Cyber Monday) by adjusting timing for promotional discounts.
- Make offers evergreen to capture early demand.
- Employ a dynamic mix of content types (e.g., cash back, weekly ads, tiered offers) to see what resonates best with consumers.
- Help shoppers feel safe by offering COVID-era staples, such as curbside pickup and BOPIS (Buy Online, Pickup In Store).
Shoppers have had a rough year. Resolve to make the holidays as enjoyable and safe for them as you can, and help them navigate their way to making informed decisions. Be sure to really understand what shoppers are feeling before putting plans into action. Then create experiences and tell stories to educate and inspire them. They’ll thank you for it in the years to come, long after the madness of 2020 is behind us.
Lauren Cooley is Senior VP of Retail and Brand Solutions for RetailMeNot