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HOW RETAILERS CAN START PLANNING FOR THE 2021 HOLIDAY SEASON




Article by Andrew Lipsman  |  Feb 18, 2021


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How retailers can start planning for the 2021 holiday season
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Topics
Holiday & Seasonal Shopping
United States




The 2020 US holiday season posted better-than-expected retail sales growth, as
huge ecommerce gains added to a surprisingly positive performance for
brick-and-mortar retail. The early outlook for the 2021 holiday season is solid
despite major economic uncertainty ahead.

Retailers hoping to capitalize on post-pandemic opportunities during the 2021
holidays need to begin planning right now. While there are many unknowns about
when the US economy will bounce back and which sectors will have the strongest
tailwinds, retailers can prepare for several factors that will likely come into
play.



We forecast that total US holiday retail sales in 2021 will rise 2.7% to $1.093
trillion, while the season's ecommerce sales will rise 11.3% to $206.88 billion.
Ecommerce will account for a record 18.9% of total holiday season retail sales.


E-Mail ChartDownload


The 2021 holidays will stand in stark contrast with the 2020 season. Certain
behaviors will look like the mirror image of last year, while others will carry
forward—and even strengthen—in the post-pandemic economy. Figuring out what
those behaviors are and planning accordingly can put retailers ahead of the
curve.

Though much is uncertain, here are a few of the biggest factors to consider:

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 * State of the consumer economy. The post-pandemic economy still wallows in
   peril, with small-business closures and job losses remaining significant
   risks. Although the likelihood of additional government stimulus and extended
   unemployment benefits has increased under the Biden administration, there are
   lingering concerns throughout the consumer economy, given the unprecedented
   nature of the pandemic. Retailers should prepare for an economy that may be
   just as likely to struggle as it is to be exuberant while we transition out
   of the pandemic.
 * Prime Day timing. Only Amazon gets to decide when Prime Day will be in 2021.
   Whether it reverts to its previous mid-July timing or sticks with mid-October
   dates has huge implications for holiday shopping. Retailers planning to
   counterprogram with their own promotions should develop marketing and
   messaging plans for both possibilities. Brands should build flexibility into
   their budgets, so that if Prime Day is in October, they don’t have to make
   compromises between that tentpole and Cyber Five spend.
 * Thanksgiving store openings. When physical stores began opening on
   Thanksgiving Day (in 2013), it created some unintended side effects for
   retailers. Once store openings hit critical mass, many of the most fervent
   Black Friday shoppers headed for stores on Thursday night—and then didn’t
   make it back out for Black Friday. They ended up shopping for less time and
   going to fewer stores, for a net negative effect on holiday shopping.
   Retailers found themselves trapped in a prisoner’s dilemma; given the new
   environment, their dominant strategy was to open their doors or else concede
   sales to the competition. No matter which option they chose, they would be
   worse off than before. So, virtually every major retailer opened on
   Thanksgiving, ending up worse off than before, on balance. Rarely can the
   genie be put back in the bottle, in part because industrywide coordination is
   difficult. But the pandemic afforded retailers that opportunity. With stores
   almost universally closed on Thanksgiving 2020, there’s now a chance to
   reestablish industry norms post-pandemic. While driving sales is always an
   obvious temptation on Thanksgiving Day, retailers would be wise to align
   around staying closed.


eMarketer PRO subscribers can read more about how the 2020 US holiday season
fared, and also get an early preview of the 2021 holidays through our recent US
retail and ecommerce spending forecast.
Report by Andrew Lipsman Feb 17, 2021
US Holiday 2020 Review and Holiday 2021 Preview

Not sure if your company subscribes? You can find out here.



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