Holiday Season 2021: Looking ahead to a busy season

The 2020 holiday season was one for the record books. The ecommerce industry changed dramatically in 2020, presenting both challenges and opportunities for online merchants.

Ecommerce sales were projected to have grown by almost 21 per cent, year-over-year, to reach $52 billion in 2020 and are expected to continue to grow to $79 billion in 2024.¹ 

With this accelerated adoption of ecommerce, you’ll want to maximize every opportunity to capture your share of spend heading into the 2021 holiday season. An effective holiday strategy requires an understanding of how Canadian consumers are feeling, what actions they may take, and having a plan to make the most of this sales period.

That’s where Canada Post comes in. We recently commissioned a comprehensive consumer survey to help you make informed decisions as you plan, evaluate and implement your holiday strategy.

What are consumers expecting from retailers? Will shopping habits formed over the course of 2020 and early 2021 carry into the holidays? What can you do to minimize the challenges and maximize your opportunities? Our research helps answer these questions and more. Rest assured, there are reasons to be merry.

Consumer spending: What to expect this holiday shopping season

Shopping behaviour changed over last year’s holiday season. In 2020, 45 per cent of purchases were made online for delivery. Throughout 2021, shoppers surveyed told us that they expect to maintain their online shopping habits. In fact, 89 per cent of online shoppers plan on buying more or the same online for delivery, specifically over the course of 2021 including the holiday season.² 

Customer expectations remain high. They demand a seamless online shopping experience, reliable deliveries and flexible returns policies, pickup options and a range of promotions to keep them loyal.

Ecommerce growth: From dabblers to devotees

Since the pandemic, tens of thousands of Canadians have become devoted online shoppers. Having experienced simplicity and convenience, shoppers are saying they’ll be doing more of the same this holiday season, too.

There will be more competition for ecommerce dollars, and a little more pressure on retailers to provide a seamless omnichannel experience.

We have seen how this altered spending behaviour of consumers has resulted in fulfillment challenges for the entire industry. What can you do to minimize stress on your operations, as well as your partners’?

Promotions: Plan your ecommerce strategies early

You should start your promotions earlier than in previous peak seasons. We’re talking weeks before Black Friday and Cyber-Monday. In 2020, we saw on average 47 per cent of holiday purchases made before Black Friday, thanks to early promotion and media campaigns by retailers. These early purchases helped spread the volume out across an already compressed shopping period.³ 

Consumers recognize the challenges that increased ecommerce volumes place on fulfillment and delivery times and want to ensure they get what they need for the holidays.

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:

• 82 per cent will shop more often with retailers who offered free shipping.
• 46 per cent chose one retailer over another because of their participation in a loyalty or rewards program.
• 38 per cent of online shoppers were influenced to shop with a given retailer because they received a promotional email.⁴

Consider a mix of offers to engage and incent. 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 manage 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.

A case in point: Our research shows that 46 per cent of shoppers are influenced to shop with a retailer who provides an expected delivery date.⁵ 

Information is key to customer satisfaction. 46 per cent of customers are influenced to shop with a retailer who provides an expected delivery date.

Use your ecommerce 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 issue that may negatively impact their experience.

Keep things 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 return policy to attract shoppers, 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:

• 59 per cent did so because there were no free returns.
• 56 per cent left due to a lack of flexible returns.⁶
• 63 per cent of online shoppers abandoned carts because of returns-related concerns.⁷ Not good.

Last holiday season, 62 per cent of online shoppers paid more attention to return policies.⁸  We can assume that returns will be equally important in 2021.

Give your return policy the best chance of motivating shopper behaviour by prominently display it on your site. 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 reopened.⁹  That suggests there’s still a strong preference for in-person returns.

Ch-ch-ch-changes: Leveraging an omnichannel approach

Among the zigs and zags brought on by the pandemic is the continued integration of the online and offline retail worlds, which includes the online marketplaces you may depend on.

While more Canadians than ever embraced ecommerce (in many cases, by necessity), retail locations often played vital roles in the fulfillment of online purchases. Before the pandemic, 16 per cent of consumers used curbside pickup (13 per cent occasionally and 3 per cent regularly). In 2020, 51 per cent were using curbside pickup. This decreased to 42 per cent in year two of the pandemic (2021) and this number is projected to drop to 28 per cent as we enter a post-pandemic market.¹⁰ 

With the increased adoption of omnichannel during the pandemic, it’s safe to conclude that stores will still be important destination points for online pickups as consumers are looking for options when it comes to receiving their purchase.

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, designating a pickup 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 ecommerce operations

Tighten your operations early to ensure you’re ready to support the increased demand coming your way.

Stock up on products

With spending online 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. This is something you want to keep in mind. If products are unavailable, consider offering alternatives, such as notifications when the product comes back in stock, or ‘you may also like’ suggestions in the item view, to give shoppers choice and flexibility. Options like these will likely help improve your cart abandonment rates, with 48 per cent saying they would abandon their carts when no alternatives are given to purchase items out of stock.¹¹

Optimize your fulfillment strategy

Ensure it’s integrated across all channels to deliver on acceptable timing regardless of the point of sale. Online shoppers expect the estimate 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, 42 per cent of surveyed shoppers said they are more likely to choose a retailer that processes orders quickly.¹²

Ensure you have the right technology in place

Technology partners – like Shopify, Magento and ShipStation – have leading-edge ecommerce platforms and software that make it easier to integrate your retail and online stores. Every ecommerce 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 headed into the most competitive period in retail. 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.

Sources:
¹ Briggs, P.eMarketer, “Canada Ecommerce 2020 Digital Retail Propelled by COVID-19 Quarantines”, June 9, 2020.
² Canada Post. 2021 Canadian Online Shopper Study, 21-205, April 2021.
³ Canada Post. 2020 Holiday Shopping Behaviours, 20-224, January 2021. 
^{4 5} Canada Post. 2021 Canadian Online Shopper Study, 21-205, April 2021.
^{6 7} Canada Post. 2021 Canadian Online Shopper Study, CPC 21-205, April 2021.
^{8 9} Canada Post.  2020 Holiday Shopping Behaviours, 20-224, January 2021. 
^{10 11 12} Canada Post. 2021 Canadian Online Shopper Study, 21-205, April 2021.