No matter how you look at it, this holiday season will be one for the record books.
In the first six months of 2020 alone, we’ve had it all. The exponential growth of e-commerce. Strained supply chains. Changing consumer preferences. A shifting omni-channel world. Retailers are seriously reassessing the way they approach business.
It’s an understatement to say that Q3 and Q4 will be critically important to you. You want to maximize on every opportunity out there. The best way to plan the right holiday strategy is to better understand how Canadian consumers are feeling – and have a plan to make the most of this compressed sales period.
That’s where Canada Post comes in. We recently commissioned a comprehensive consumer survey which we hope will help your decision-making as you plan your holiday strategy.
What are consumers expecting from retailers? Will shopping habits formed in the first half of 2020 carry into the second half? What can you do to minimize the challenges and maximize your opportunities? The survey helps answers all of these and more. Rest assured, there are reasons to be merry.
Consumer spending: What to expect this holiday season
Belts are tighter in 2020. It is inevitable that some consumers will be cutting back on the holiday cheer. We asked our surveyed consumers to compare their projected holiday spending this year compared to 2019. This is what they had to say:
- 32 per cent plan on spending less
- 7 per cent plan on spending more
- 61 per cent plan on spending the same
Despite the change in how they shop, customer expectations stay high. They demand a great online shopping experience, reliable deliveries and flexible returns policies, pickup options, and a range of promotions to keep them motivated.
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From dabblers to devotees
Since the pandemic, tens of thousands of Canadians have become committed online shoppers. E-commerce holdouts are now very rare. Having tasted simplicity and convenience, shoppers are saying they’ll be doing more of the same this holiday season, too.
In fact, 48 per cent plan to purchase most or everything online this year.
There will be more competition for shrinking e-commerce dollars, and a little more pressure on retailers to provide a seamless omni-channel experience.
Where do consumers expect to buy most or everything this holiday season?
The pandemic has changed how and where respondents will be shopping in the weeks ahead:
This anticipated change in spending behaviour will likely pose fulfillment challenges for the entire industry. What can you do to minimize stress on operations – for you and your partners?
Promotions: Strategically plan – and start early
This is not a good year to be a retail procrastinator. You should start your promotions earlier than in previous peak seasons. We’re talking weeks before Black Friday and Cyber Monday.
If retailers start holiday promotions earlier, 32 per cent of shoppers are willing to start shopping in October, and another 22 per cent will get going in early November.
Our survey respondents were loud and clear on this point. They recognize the challenges that COVID-19 places on fulfillment and delivery times and want to ensure they get what they need for the holidays. If retailers start holiday promotions earlier, 32 per cent of shoppers are willing to start shopping in October, and another 22 per cent will get going in early November.
Strategically plan and time your promotions, so you can meet the expected increase in demand while maximizing your share of holiday spend.
Reach out to your partners and include them in your holiday planning. Working closely together will help align expectations. Spacing out promotions and starting them early is a win for consumers, too. Shoppers can take advantage of the deals they crave while enjoying the peace-of-mind of knowing their purchases will arrive in time for the big day.
Promotions: Keep your toolkit full
If our recent research is any indication, Canadians’ love affair with offers and discounts will remain unabated this holiday season:
Consider a mix of offers to engage and motivate. They can be product-specific, site-wide, free shipping offers – or a mix of them.
At the same time, reassess the length of your promotions. Again, plan out your promotional calendar strategically to both clear out inventory and optimize sales.
Set clear expectations with consumers
The only surprise today’s consumer accepts is of the gift-wrapped variety. Strive for utmost transparency and manage expectations upfront.
Information is key to customer satisfaction. 70 per cent of customers are willing to wait longer for online purchases if they’re given an accurate delivery time frame up front.
A case in point: In our survey, 70 per cent stated that they are okay with waiting longer for online purchases, but only if they’re given an accurate delivery time frame up front.
Use your e-commerce site and marketing channels to clearly communicate promotions, shipping deadlines and any potential delays during the holiday season. Update your FAQs and Help section to address any issues that may negatively impact their experience.
Keep that clarity crystal clear even after the purchase. Provide regular updates during the fulfillment and delivery process to ensure they always know where their shipment is and when they can expect it.
Don’t ignore returns (as much as you would like to)
You don’t need an industry-leading returns policy to attract consumers. But you do need to make the one you have simple, clear and easy-to-find. Anything less can put a potential sale at risk.
Cart abandonment rates help tell the story. We researched the motivations behind why Canadian shoppers abandon carts, and found that:
In short, more than half of online shoppers abandoned carts because of returns-related concerns. Not good.
Last holiday season, 62 per cent of online shoppers paid more attention to return policies. We can assume that returns will be even more important in 2020 with some consumers reluctant to shop in-store.
Give your returns policy the best chance of incenting customer action. Prominently display it on your site. If your policy has been impacted by COVID-19, let shoppers know.
Early-bird shoppers may be concerned about returns after the holidays. Reassure them by extending your entire returns window, from October to January and even February.
Concerned about the cost of offering free returns shipping? It may not be the financial hit you imagine it to be. A case in point: In the midst of the pandemic, almost 4 in 10 shoppers held off returning online purchases until stores re-opened. That suggests there’s still a strong preference for in-person returns.
Delivering the goods, delivering on customer experience
To consumers, the delivery process is considered an extension of your brand promise:
- 63 per cent agree that the delivery experience has a significant impact on where they choose to shop online
- 43 per cent choose a retailer based on an acceptable expected delivery
All of which simply underscores the importance of getting your delivery partner involved early in the holiday planning process.
Ch-ch-ch-changes: Leveraging an omni-channel approach
Among the zigs and zags brought on by the pandemic is the continued integration of the online and offline retail worlds
While more Canadians than ever embraced e-commerce (in many cases, by necessity), retail locations often played vital roles in the fulfillment of online purchases. Compared to their pre-pandemic shopping behaviour:
With the increased adoption of omni-channel during the pandemic, it’s safe to conclude that stores will still be important destination points for online pickups (not necessarily a bad thing since it leads to in-store purchasing as well).
Whether it’s online, offline or a combination of the two, shoppers want seamless experiences. Leverage your full set of channels to provide shoppers with convenient options for receiving their purchases, including online, retail locations and marketplaces.
Think about your strategy across these channels from an operational mindset. For instance, a click-and-collect option for a specific channel can shift volumes away from maxed-out channels.
In short, Canadians aren’t thinking of online and offline as two separate worlds to the degree they once did. Nowadays, one is just an extension of the other.
Prep your e-commerce operations
Tighten your operations early to ensure you’re ready to support the increased demand coming your way.
Stock up on products
With online spending set to increase, you’ll want to ensure that you have the inventory, especially of your bestselling products.
According to the survey, one in three said that availability of products online fell short of their expectations. That represents a great opportunity for retailers to step up.
Optimize your fulfillment strategy
Ensure your strategy is integrated across all channels to meet delivery expectations, regardless of the POS. Online shoppers expect the estimated delivery window to include the time it takes you to process the order. When asked about how satisfied they were with the time spent by retailers to process orders, 57 per cent of surveyed shoppers said it met their expectations, with 28 per cent feeling a need for improvement.
Ensure you have the right technology in place
Every e-commerce brand knows that fraud is a constant risk, so we tackle that subject in more detail here.
Rely on your partners to help you
Even with great products and amazing customer service to back them up, your holiday planning success needs help along the way. Work closely with your partners to plan and forecast your strategy.
You’re going head-long into the most competitive period in retail (this year, more than most). But with a little prep, you can make the most of the upcoming season. There are numerous opportunities for your brand to be remembered, and embraced, long after the decorations are back in their boxes.
Ready to make the most of the holidays?
A Canada Post representative can provide you with insights on every aspect of your e-commerce strategy. Request a consultation today.Contact an expert