Suchi Sastri, managing director and partner, Boston Consulting Group
As the holiday season approaches and the pandemic continues to evolve, retailers want to know what to expect. Will e-commerce continue to grow at the rate it did last year? How big of a role will in-store shopping play in holiday shopping?
While it’s still early, fewer U.S. holiday shoppers say that COVID-19 will impact how they shop for the holidays this year — only 35% compared with 53% in 2020 (Google-commissioned Ipsos COVID-19 Tracker, US, CA, UK, FR, DE, IT, AU, JP, RU, IN, CN, BR, MX, ES, ZA, KR, AR, CO, BE, CL, PE, SE, NL, DK, FI, NO, ~n=500-1000 online consumers 18+ per market, June 17, 2021–June 20, 2021).
At the same time, consumers have permanently changed how, when, and where they shop.
To better help retailers understand these changes, Google and Boston Consulting Group launched a series of surveys in partnership with Dynata to over 12,000 U.S. consumers across retail categories ahead of the holiday shopping season. Here’s what the research found.
This season’s shopper will be more omnichannel than ever
During the pandemic, retailers saw a dramatic shift toward e-commerce. While the move online happened quickly, e-commerce has stabilized as people look for more in-person experiences. In fact, only 14% of U.S. shoppers say they will not shop in-store this holiday season (Google-commissioned Ipsos COVID-19 Tracker, U.S., ~n=623 online consumers 18+ in the U.S. that plan to shop for the holidays, June 17, 2021–June 20, 2021).
But as in-store shopping resurges, digital’s role in shopping has been cemented, as more than 70% of surveyed participants reported that their shopping journey involved online touchpoints (Google/BCG, U.S., Path to Purchase Study, July 2020). Digital will be a critical part of their journey, whether it’s online or in-store.
So what does this mean for businesses, and how should teams adapt their holiday marketing strategy? Taking a closer look at category-level insights, here are a few tips that BCG recommends retailers — whether you have stores or not — consider this holiday season.
1. Highlight shopping options based on category
To consumers, the role of the store will vary based on their needs and the category of products offered. Boston Consulting Group’s surveys found four primary motivations that bring consumers in-store — convenience, immediacy, in-person experience and product trial. The surveys also found that product categories tended to align with the following pairs of motivations.
- Convenience or immediacy motivates approximately 40% of people shopping in-store for grocery, beauty and toiletries, pet care, health care, small appliances, home improvement, and auto parts (Google/BCG, U.S., Path to Purchase Study, N=2,974, July 2020 and July 2021).
- This correlates with shopping behaviors on Google, where searches for “now near me” have grown globally by over 100% year over year (Google Data, Global English, Jan. 26, 2021–March 26, 2021 vs. Jan. 26, 2020–March 26, 2020).
- Experience or product trial motivates consumers to shop in-store for jewelry, handbags, and accessories, apparel and footwear, home furniture, mattresses and major appliances. For example, searches for “furniture shop near me” have grown globally by over 100% year over year (Google Data, Global English, Dec. 22, 2020–Feb. 19, 2021 vs. Dec. 22, 2019–Feb. 19, 2020).
For retailers that fall into multiple categories, the pairings of experience and product trial for in-store shopping might point to highlighting options based on category. For instance, retailers should promote your curbside options for convenience categories like grocery and pet, or consider showcasing their digitally enabled experiences like virtual try-on to emphasize product-trial experience for categories such as beauty or home goods.
2. Evaluate the economics of e-commerce fulfillment
The surveys found that consumer fulfillment needs differ, depending on what spurs a product purchase. Matching urgency of need to delivery speed can help mitigate the economic pressure of providing fast delivery everywhere for everything.
For example, when urgency is low for products such as personal indulgences (think: sneakers) or upcoming special occasions, many retailers still deliver packages sooner than consumers need them. By contrast, when consumers shop for products such as major appliances, over a quarter of shoppers report that they aren’t getting them fast enough (Google/BCG, U.S., Path to Purchase Study and Consumer Survey, (Major Appliance Shoppers N=648, Aged 18+, Transaction timing: March 2020–Dec 2020), Jan 2021).
Understanding customers’ delivery needs and marketing against them are both essential for optimizing their experience and optimizing for margins.
3. Make the customer experience mobile-friendly
The shopper continues to be mobile first, which has become even more pronounced in the past year.
Since the pandemic’s onset, more than a quarter of online shoppers are shopping on their mobile devices — ranging as high as 44% for grocery — though many have had nearly constant access to their home computers. (Google/BCG, U.S., Path to Purchase Study and Consumer Survey (Online Shoppers N=6,734, Online Grocery Shoppers N=324, Aged 18+, Transaction timing: March 2020–Dec 2020), Jan 2021).
This includes app usage and downloads, which we’ve seen reflected on Google, where searches for “online shopping app download” have grown globally by over 300% year over year (Google Data, Global English, Jan. 26, 2021–March 26, 2021 vs. Jan. 26, 2020–March 26, 2020).
Retailers need to recognize the distinctive aspects of each channel and optimize the experience accordingly. Consider deep-linking or driving app downloads for categories like grocery that are mobile heavy.
4. Drive loyalty with existing customers and win new ones
Because this year’s shopper is likely to be more omnichannel than ever, digital channels will continue to be a critical touchpoint in the consumer shopping journey for both acquiring new customers and driving loyalty with existing customers.
According to the recent research, 64% of existing customers, on average, engaged with a digital touchpoint during their shopping journey, while 80% of new customers, on average, engaged with a digital touchpoint during their shopping journey (Google/BCG, U.S., Path to Purchase Study and Consumer Survey, Existing Customers Age 18+ N=16,487, Jan 2021 and Google/BCG, U.S., Path to Purchase Study and Consumer Survey, New Customers Age 18+ N=2,665, Jan 2021).
While we don’t know exactly what this holiday season will bring, these tips will help retailers be prepared. As always, when demand is unpredictable, automated solutions can help retailers get in front of the right customers at the right time.
A version of this article appeared previously at Think With Google.