Get Ready (Early) for Holiday 2020

The COVID-19 pandemic has changed everything this holiday shopping season. More and more people are turning to eCommerce to shop, particularly older demographics. When surveyed, 42% of people plan to spend less time in stores or visit stores less frequently.[1] And as in-store activity dips, eCommerce is filling the gap. In 2020, retail spending is expected to decline by 14% while eCommerce is predicted to grow by 18%.[2] My personal prediction is that this holiday season will be even higher than that. 

In this environment, retailers are trying to pivot hard to eCommerce. For many of them, this is not yet their core competency. They are learning as they go. For DTC disruptors, however, this is their bread and butter. They have been doing this, and doing it well, since day 1. This is their chance to put the pedal to the floor and accelerate their business. For some companies this could be a once-in-a-lifetime inflection point in their history. This is especially true as businesses and consumers alike are starting to resume (somewhat) normal operations.

Pull The Holiday Season Forward

As digital and eCommerce front runners, disruptors have a real opportunity to make this year their biggest holiday season yet. With some early action on shipping, creative and supply chains, disruptors can position themselves to thrive. This means accounting for some nuances in the landscape leading up to the holiday season, which are being driven by a few important calendar dates:  

• Prime day potentially early October: Prime Day is happening 5 months later than the typical July sale. While the exact date is TBD, industry analysts predict it will fall between October 5th and 9th. This year, increasingly price sensitive customers may do a lot of their shopping around these kinds of mega-sales. In fact, ? of surveyed holiday shoppers expect to do their shopping on Prime Day [6].
• The U.S. election on November 3: Among other factors, unprecedented demand for mail-in-ballots could make shipping more complex this year. Anticipating increased demand, carriers have already decided to apply surcharges on deliveries.  
• Black Friday on November 27: This year, there are only 28 days between Black Friday and Christmas, a relatively short amount of time compared to previous years.

With more moments to think about, it will be important for disruptors to get started early to make the most of this holiday season. Most importantly Disruptors should consider pulling the Holiday season forward to maximize growth potential. Let’s look at 4 key actions to consider.

1) New Behaviors + New Audiences = New Opportunities

More people will be turning to their mobile phones to discover, research, and shop for friends, family, and themselves (yes, "self-gifting" is definitely happening). While most marketers assume that Gen Z and Millenials are the ones leveraging mobile the most, it is actually the Gen X and Boomer generations that have accelerated this trend. In fact, we have seen Gen X and Boomers account for double to triple digit growth across discovery, research, and purchases from mobile devices [5].

For marketers, this means that there is a whole new group of people you could be reaching...with the right approach in mind. If you’ve been following my LinkedIn posts in the past, you know that I am a big proponent of machine learning as a way to drive business growth. This is especially important heading into this holiday season. If your marketing strategy to date has relied heavily on manual targeting via keywords, demographics, and interests, you may be missing out on this new audience entirely. These are people who may be interested in purchasing from you but do not fall within your existing targeting parameters. Machine learning looks beyond your defined targeting to help match your product and service with high-intent consumers. I encourage you to check out my previous LinkedIn article if you’re interested in putting machine learning to work for your business.

2) Make Shipping a Priority

Shipping may be more complex than ever this year. With more retailers coming online, it’s going to be important to avoid shipping delays and make sure customers have accurate information.

For example, USPS is managing an unprecedented demand for mail-in-ballots in an election year. At the same time, all carriers are dealing with increased demand. FedEx, UPS and USPS have already announced that they are imposing surcharges on deliveries during peak times.

For companies that offer free shipping, these surcharges will eat away at margins and could become a big part of companies’ margin management strategies. Alternatively, for companies who pass on shipping charges to consumers, this could have a big impact on shopping conversion rates as consumers may not want to pay for the shipping surcharge. This is especially true for lower price point items. For example, adding a $3 surcharge to a $15 pair of socks adds 20% to the total cost of someone buying that product. It’s important for brands to bake surcharges into their margin planning.

To manage these changes, consider moving delivery windows up to protect margins and satisfy increased demand. Also, consider moving final ship dates up to ensure packages arrive on time and avoid logistical bottlenecks, shipping surcharges and unhappy customers. Also, consider giving your consumers an extra day or two on shipping expectations to ensure you can manage through unexpected delays.

Here’s some more information around prices and surcharges for different carriers:

• FedEx has announced peak surcharges going into effect in the fall as well as updated pricing on international and freight shipping. 
• UPS has announced peak surcharges for a variety of destinations and services with several already in effect. 
• USPS has announced temporary price changes effective October 18, 2020 through December 26, 2020.

3) Get Creative to Spur Earlier Demand

With shipping carriers imposing surcharges during peak holiday shopping times, disruptors need to think about ways to create demand earlier in the holiday season. Waiting for the Black Friday or Cyber Monday window is already too late. That’s because many carriers will have already started imposing their shipping surcharges as early as the start of November.  

As the COVID-19 pandemic is significantly impacting the economy and unemployment numbers, consumers are much more likely to be price sensitive this year and interested in doing much of their shopping during mega-sales, such as Prime Day. Research shows that 47% of consumers said they plan on making holiday purchases during Prime Day.[3] And 56% of people surveyed bought something during mega-sales events.[4]

The scale, duration and number of these sales events are growing. Mega-sales are evolving to become more of a time frame of promotional offers rather than a single day. Think of ways to ideate a holiday or sale period of your own. This is what Amazon did with Prime Day. Disruptor brand RTIC Outdoors also did it by creating and registering “National Cooler Day” on the Friday before Memorial Day. The company offers price promotions on their line of portable coolers.

When it comes to creative, it’s going to be important to highlight sales and promotional periods in your creative to appeal to bargain hunters. If you’re moving up your shipping deadlines, your creative production timeline needs to match them (as well as your landing pages). An early focus on holiday shopping—given anticipated shipping delays—means launching holiday creative in-market sooner than in years before. Start working with your creative team today to examine your creative production timelines, and remember to build your creative as "mobile-first!" 

4) Prepare Your Supply Chains

In the first half of the year, consumer behaviors changed significantly as most of the United States went into lockdown. As a result, many disruptors had to move quickly, either to meet unprecedented organic demand or to pivot their buying strategy. Putting the pieces in place to respond to a dramatic shift to eCommerce was critical for sustaining business continuity in the first half of the year.

Since there will be a boom in eCommerce growth this holiday season, eCommerce advertisers need to ensure they have contingency plans in place to account for issues in supply chains. From sourcing fabric for apparel to dry-ice for packaging, supply chain disruption has manifested in unexpected ways since the onset of the COVID-19 outbreak. Ideating on multiple contingency plans throughout all steps of the supply chain is now a key part of 2020 business planning. As an example of questions within your contingency plan, ask yourself "what is the first process that will break if demand goes up 5-10x, and how would we react?"

Get A Running Start for Holiday 2020

While there are some unique factors to consider this holiday season, there’s also some real opportunities for disruptors to drive growth. Getting your shipping strategy right, creating demand early and preparing your supply chains can help your brand have its most successful holiday season yet. The time to get started is now.

Be sure to check out Facebook’s “Holiday, Unwrapped” resource hub for insights on consumer trends and how to prepare your marketing campaigns for success. 

[1] “Coronavirus Research May 2020” by GlobalWebIndex (online survey of people in US, May 19 – May 26), 2020.

[2] Bank of America, U.S. Department of Commerce, ShawSpring Research

[3] Coresight Research, “What Proportion of US Consumers Plan to Buy on Amazon.com on Prime Day 2020”, 411 US respondents surveyed on June 24, 2020.

[4] Facebook Internal Conversion Data (all offsite purchase conversions visible to Facebook’s family of apps).

[5] "Facebook Seasonal Holidays Study" by YouGov (Facebook-commissioned online study of 1,541 people aged 18+). US data only. 2 Dec to 24 Dec 2019. 

[6] Coresight Research “COVID-19s Anticipated Impacts on Holiday Spending”. July, 2020