Season's learnings: What holiday season 2020 tells us about 2021 – and beyond

It was a season to remember within a year to forget.

The COVID-19 pandemic changed all the rules. Your customers shopped differently and celebrated distantly. They were more forgiving of delays and more demanding of transparency. They appreciated every effort you made to keep your doors open and them safe.

Adapting to changing customer behaviour in 2020

You should take pride in how you listened, reacted and adapted quickly to these shifts in attitudes and actions. You found some successes, and learned some lessons, but now face the reality of what these changes in behaviour will mean going forward.

Were these one-time anomalies of an unusual year? Or are they here to stay?

That is where we can help.

New research on customer shopping behaviour

The best way to learn what customers want and need is to ask them. Canada Post recently commissioned research detailing the mindset of customers emerging from the 2020 holiday season. This first look at the trends of the season offers a clear guide for your decision-making in the year ahead.

What you can learn from the new trends in e-commerce that we uncovered

What lessons can retailers learn from 2020? What strategies do you need to deploy to build on those lessons in 2021? We suggest that these are the last gifts of 2020 to be opened – some might even be your key to a happy holiday season this year.

Offering a great customer experience matters

The world changed and so did your business. Those steps you took to adjust your normal operations mattered as seven in 10 Canadians noticed retailers doing things a little differently this year – most notably offering pickup or delivery of in-store items (42 per cent), modifying store flow (3 per cent) and adding additional checkouts (21 per cent).¹

The best customer experiences offer flexibility, choice and transparency from operations through to your promotions. That isn’t going to change.

Source: Canada Post. 2020 Holiday Shopping Behaviours, 20-224, January 2021.

Online shopping is in

E-commerce is here to stay. That’s not news to you. Your customers have been heading in that direction for some time. The COVID-19 pandemic has fueled a shift from brick and mortar to online retail. E-commerce’s share of total retail sales in 2020 surpassed anticipated figures, hitting a three-year projection in just one.²

Over the 2020 holiday season, nearly half of Canadians (46 per cent) purchased everything, or most things, online – including 54 per cent of those under the age of 55.³ Online shoppers also bought more online this holiday season (58 per cent), not less (10 per cent), and women were more likely to up their online volume.⁴

Those sales remained diverse, as Canadians bought a wide range of items online last holiday season, most notably clothing, toys, electronics and books.⁵

Prepare for this behaviour to continue. A vast majority of Canadians (93 per cent⁶) plan to maintain or increase their online shopping throughout the year, with 84 per cent already saying they plan to make the same number of, or even more, online purchases during the 2021 holiday season.⁷

The in-store experience still matters

While the trends point online, that doesn’t mean you should abandon the in-store experience as 39 per cent of customers continued to purchase everything, or most items, in-store, and another 15 per cent split their purchases evenly between online and in person.⁸ ‘Shop your way’ messaging encouraging all avenues of purchasing will continue to resonate. Nobody’s giving up choice.

Offering a seamless, integrated shopping experience is key

The customer is calling the shots more than ever.

Loyalty will be harder to earn – 40 per cent of consumers tried new brands during the pandemic, but only 12 per cent of consumers indicated they will shop from the same retailers and brands as they did last year.⁹

Source: PwC Canada. 2020 Canadian Holiday Outlook, 2020.

That should be a call to action for your continued focus on reducing the friction between all channels in operations, promotions and purchase experience – curbside pickups, desktop website, mobile apps and social media. Provide a consistent experience across channels and full-circle promotions.

Are the lines between online and offline marketing, retailing, fulfillment and distribution blurring for you and your business? Check out Unified shopping experiences in a post-pandemic world for some clarity.

Customers are shopping early and often

While fewer Canadians (77 per cent in 2020 versus 84 per cent in 2019) shopped this holiday season,¹⁰ those who did began much earlier. Consider that the average holiday shopper completed roughly half their shopping before Black Friday, with 20 per cent coming before the end of October. That led to Black Friday Weekend and Cyber Monday accounting for only 14 per cent of the average shopper’s holiday purchases.¹¹ Interestingly, a majority of online shoppers didn’t even shop on Black Friday (50 per cent) or Cyber Monday (62 per cent).¹²

It’s true – the holidays do start earlier every year. Extending the length of promotions will be standard for all key shopping seasons as customers continue to react earlier and earlier. Retailers should consider getting in front of shoppers early for other key timeframes, including Valentine’s Day, back to school, etc., to maximize the impact of these selling windows.

Offering flexible payment options is key

Uncertainty created an inconsistent holiday season regarding spending. One in three Canadians spent less this year than in 2019 compared to one in five who spent more.¹³

Spending in 2021 may offer a similar mixed bag, making it important for you to offer flexible payment methods for when – and where – customers are ready to spend. Consider integrating payment solutions that enable the customer to buy their way, including buy now/pay later options (Paybright, AfterPay, Uplift) to make payments more flexible and products more accessible.

Source: Canada Post. 2020 Holiday Shopping Behaviours, 20-224, January 2021.

Being transparent with customers is essential

Consumers listened to, and took to heart, messages delivered to them throughout the holiday season. The majority of online shoppers listened to recommendations from retailers and shippers to begin shopping early, understood shipping might take longer and changed their shopping habits to avoid being disappointed.

Open and transparent communication is now the new normal. Our research continues to show that sharing information is better, even if it’s not good news. It strengthens the trust between the retailer and consumers.

Balancing online and offline is key

On average over the holiday season, Canadians made 16.7 online purchases that required delivery, while four purchases required in-store or curbside pickup.¹⁴ This new ratio signaled a renewed focus on balancing online and offline store traffic. Having a robust real-time inventory management system across sales channels – which allows customers to see current stock no matter how they shop – combined with a secure and dependable shipping partner became a priority.

Source: Canada Post. 2020 Holiday Shopping Behaviours, 20-224, January 2021.

Meeting customer delivery expectations builds trust and loyalty

Want to be a Canadian’s online retailer of choice? Your potential customer said their decisions centred on keeping shipping costs low (88 per cent), speedy (81 per cent) and transparent (81 per cent). If you can do that, while also processing orders quickly (80 per cent), they will prioritize shopping with you.¹⁵

In a year of uncertainty, having a good tracking system and delivery notifications paid off, with 14 per cent of customers indicating that is what stood out to them (up 10 points since last year). Fast (32 per cent), on-time (17 per cent) service is still important, but given the COVID-19 pandemic, people want to know exactly where their package is.¹⁶

Close collaboration with technology and shipping partners will help you scale to support demand.

Offering flexible and easy returns pays off

Return policies remained important for first-time purchases at a retailer (63 per cent). A majority (59 per cent) maintain being able to return by mail/carrier is critical, yet fewer (36 per cent in 2020 versus 62 per cent in 2019) said they were concerned about returns policies when purchasing gifts online this year.¹⁷ That latter point shows a relaxing of customer concerns, a direct result of retailers early in the pandemic recognizing calls for returns experiences to be flexible, convenient and easy – more so than ever before. You made the changes (extended returns windows, offering online returns, etc.) and this is the reward.

Want to strike a better balance between meeting the needs of customers while not busting your budget when it comes to returns? Check out E-commerce returns solutions: closing the gap between retailers and shoppers.

The holiday season was very different this year for us all. Many traditions were scrapped, as most Canadians did not gather with family, friends or coworkers, but rather stayed home. Many changed their gift-giving habits and bought fewer or more practical gifts.

Likewise, it was a different year for your business. Chaotic and challenging, but hopefully rewarding.

Canada Post is trying harder than ever to support your business by learning many of the same lessons you are. Working at your side, we changed along with you. Through every challenge, we processed and delivered more over the holidays than ever before. We delivered one million packages per weekday from November 9, 2020 onward, including one week (December 13 to 19, 2020) where we delivered nearly 10 million. On December 21, 2020 alone, we delivered 2.4 million packages – the highest single day total in our history.

Sooner than we realize, we will be turning our eyes to holiday season 2021. While holiday season 2020 offered many events we hope to forget, the lessons learned in meeting the challenges they caused can set you up for a successful 2021 – and beyond.

And that is a gift worth keeping.

Sources:
^{1 3 4 5 7 8 10 11 12 13 14 15 16 17} Canada Post. 2020 Holiday Shopping Behaviours, 20-224, January 2021.
² eMarketer. Canada Ecommerce 2020, June 9, 2020.
⁶ Canada Post. 2020 Fall Survey, 20-2014, October 2020.
⁹ PwC Canada. 2020 Canadian Holiday Outlook, 2020.