Will we hear cash registers ringing along with sleigh bells this December? Yes and no. New research and retail outlooks see a decidedly digital holiday shopping season in 2021 that’s already skewing toward eCommerce (no ringing registers) as serious gift buying kicks in.
With many years of eCommerce experience now under their belts and pandemic pandemonium still causing shortages and restrictions, consumers are signaling that what they want this holiday are rewards, recommendations and frictionless experiences wherever they shop.
The new 2021 Holiday Shopping Outlook: Why Convenience And Personalization Will Be Key, a PYMNTS and Kount collaboration, backs this up, finding that almost 90 percent of consumers plan to shop online this year — that’s up 13% year over year— and that “both the online and in-store shopping experiences merchants deliver will help determine if this season will be a boom or a bust.”
Surveying nearly 3,650 U.S. consumers, that study identifies four primary consumer personas making the gifting decisions this year, and delves into what motivates these pandemic-era gift givers.
At 40% of respondents, the largest subset is “practicality-driven shoppers” motivated by purchasing ease, product availability and products delivery. The next largest group, at 28%, is made up of “advice-seeking shoppers,” who seek personalization, product recommendations/reviews and a seamless checkout. At 21% of the sample, “convenience-driven shoppers” value product availability most. “Hard-to-please” shoppers at 12% are the smallest cohort, and they want it all — ease, security, availability, delivery and highly satisfying experiences at every stage.
Get the study: The 2021 Holiday Shopping Outlook
Who’s Spending More This Year
As for spending levels expected after a tumultuous year where some fared better than others economically, The 2021 Holiday Shopping Outlook found 31% of Gen Z consumers plan to spend more this year than last, as do 28% of millennials and 25% of bridge millennials.
Higher spend will mostly occur online, PYMNTS found, with the study stating, “The expectation for increased spend sets online-only holiday shoppers apart from most of their peers,” as 33% will increase holiday spend, while 45% will drop about the same as 2020.
Only 11% of online shoppers said they’ll spend less.
“This compares to just 19 percent of all holiday shoppers who plan to spend more and 18 percent who plan to spend less,” and overall, 55% of all holiday shoppers “say they will keep this year’s spending in line with last year,” per that research.
Payments Options, Checkout Ease are Decisive
Whether folks decide to shop in stores or online for the holidays, nearly 40% of consumers will use a credit card to make those purchases, and almost 34% will use debit cards.
Some spending trends are growing, as expected, especially buy now, pay later (BNPL). The 2021 Holiday Shopping Outlook finds that “The expected proportional increase to 3 percent of consumers using mostly BNPL for online holiday shopping is nearly double” 2020’s 1.6%.
Additionally, “Thirteen percent of consumers expect to use PayPal mostly for online shopping, a slight decrease from 14 percent of a year ago. Consumers plan to use most other methods, including digital wallets (6 percent) and store/gift cards (4 percent), for about the same proportion of online purchases this year as they did in 2020,” the study states.
A big decider for conversions online and off will be the seamlessness — or lack thereof — in the checkout process. PYMNTS October study Removing Friction at the Checkout: How Payment Experiences Influence Consumer Choice, a Checkout.com collaboration, found that “retailers have become less, rather than more, efficient at anticipating and meeting customer demand for better payment processes, even as consumers enter the high stakes holiday shopping season.”
Data from this study indicates that better pricing, more payment options and free delivery all play significant roles in online shopping conversions, as they do in physical settings as well.
See also: Removing Friction at the Checkout