What Will Christmas 2023 Look Like for the Retail Industry?

Christmas 2020 is going to feel rather different to previous Christmases. With the high-street in and out of differing levels of lockdown, taking to the streets to tick off your Christmas wish list is looking less and less likely. No enticing Christmas window displays, no Cliff Richard crooning through shop speakers and no freebie mulled wine and mince pies to get you in the shopping mood. Although many of us have embraced online for buying our presents, it’s looking like the only option this festive period. 

As a direct result of the pandemic, more than half of adults, and 75% of 18 to 34-year-olds, within the UK feel that seasonal festivities are more important than ever. With high expectations, it’s no surprise that 23% of consumers report beginning preparations earlier than usual.

— As of October, 28% of consumers had already started their Christmas shopping —

Interestingly, 58% of these consumers do not intend to reduce their spending this year, and 16% plan to spend even more this Christmas than in previous years.

So what does all of this mean for the retail industry? In this article, we’ll explore what an eCommerce Christmas is going to look like in 2020. In doing so, we’ll discuss why it’s more important than ever to know your audience, use creativity to pull customers in, and design and deliver memorable customer experiences.

Knowing your audience

From a marketing standpoint, it has always been essential to know your audience, but that need is now amplified. 

In this competitive digital landscape, blanket communication is extremely unlikely to connect with shoppers. The national mindset is very much different than in past years — so much of our lives has changed since March, and different demographics will want and need different things from this holiday season. 

There's a saying that has resonated with many this year: we're all in the same storm, but not in the same boat. There's no mistaking that all of our lives have changed this year, some good, some bad. What's true for everyone is that our needs and wants will be very different this year, especially coming into the festive season. This Christmas, in particular, calls for the use of personalisation tactics to reach individual customers.

As a reminder, personalisation requires you to:

• Pinpoint who you’re targeting 

• Hone in on what you’re promoting

• Understand differences in your customers’ wants and needs

Exploring pandemic-era consumer psychology 

Whether we’re talking about a pandemic, the latest political rally, marginalised groups or climate change, much in our society today is driving greater division in society. On first look, the demographics of our customers might have stayed the same, but the mindsets and motivations are in a state of flux.

To deliver personalisation in these unprecedented times, brands must pay careful attention to the changing needs and opinions of different groups so that they can tailor marketing to appeal to them. Here are five key segments of pandemic-era consumers, as defined by Delineate:

• Family-First Lockdowners: Focused on family life and committed to staying home to protect loved ones. Eager for normalcy, but not taking any risks to recreate it. For instance, this group is much more likely to cook and bake at home than dine in restaurants, which suggests they’ll be likely to do the vast majority of their Christmas shopping online too. 

• Anxiously Engaged Worriers: This group is worried about the pandemic, constantly watching the news and experiencing high levels of anxiety in their daily life. They do venture out of the home for essential reasons, but they adhere to all appropriate precautions. These customers will also be inclined to do the majority of their shopping online this year.

• Pragmatic Positivists: This group is less worried about the virus, less rule-focused and more likely to believe that taking precautions should be a personal choice. While these customers could well venture out in pursuit of the traditional retail experience (if possible), they are likely to do some, or even most, of their shopping online to avoid queues or get better deals.

• Healthy Nonchalants: This group operates with low levels of concern about the virus and a strong belief in personal choice in regards to rules. These consumers will be inclined to do a fair amount of in-store shopping, lockdown rules permitting, but like the Pragmatic Positivists, they can be tempted online by necessity, price or convenience.

• Young and Feckless: This group recognises COVID’s impact but doesn’t worry about it, as they see it as a risk for the old. They are the most likely group to shop in-person, lockdown measures permitting. 

Looking at the trends and understanding the differences

As we’ve discussed, this year, smart retailers must pay extra attention to the key economic differences among consumers. Of course, some families have experienced little to no change in their income — and with cancelled travel plans and significantly less spending on commuting and entertainment, many have found that they’ve been able to pad their savings. 

These are probably among the 16% of consumers who intend to spend more this Christmas, as they feel they want to splash out for a big celebration after a year of modest plans and outgoings.

At the same time, the state of the economy has led to uncertainty, furloughs and job losses across various sectors, which means many families are struggling to make ends meet or are worried about the future. While these consumers are just as eager as their better-off counterparts to treat their loved ones and blow off some steam, they will likely have less disposable income available to do so. 

It seems natural that these consumers will shift the majority of their Christmas spending to their children and forgo spending in other areas — in a year of volatility, they’ll want to make Christmas feel as ‘normal’ as possible for their immediate families. It’s crucial to be sensitive to this in your messaging — making customers feel guilty or inadequate is a surefire way to drive them elsewhere.

Here are a couple other noteworthy trends:

• All age groups express a strong desire to see family and friends — 67% of 18 to 34-year-olds visited friends and family within a week of this survey, as did 58% of over-55s. Although we don’t yet know exactly what Christmas will look like this year, we do know that, for many consumers, lockdown and distancing measures have reinforced the value of friends and family. This suggests that people who have the means to do so will be seeking ways to ‘treat’ their friends and family, even if they are unable to be with them physically this holiday season.

• During the first lockdown in Spring, consumers responded to useful, cheerful and authentic communications from brands — 65% of all adults wanted ‘helpful and practical’ communications. As Christmas is typically a time for good cheer, it seems natural that this trend will continue and possibly accelerate. It’s crucial that you tailor your messaging accordingly. For many retail brands, this might mean acknowledging challenges while simultaneously providing solutions. A lack of physical proximity (a common problem) might prompt a simple, cheerful solution like, ‘We are happy to gift-wrap and send your gifts direct!’

Although nearly every group of consumers is poised to do more online shopping, it’s clear that there is no one-size-fits-all approach to selling this Christmas. As we’ve discussed, many people’s situations have changed and are still in flux. Accepting these differences and incorporating them into your marketing strategy via personalisation will be the key to holiday marketing success.

Get creative to pull customers in

When customers take to the internet to buy and send gifts online, they’re giving up some of the magic of Christmas — taking to the high street to navigate festive crowds, sampling in-store freebies and glasses of red wine and just generally soaking up holiday cheer. Of course, it’s not possible to replicate all of these experiences in a digital format, but with a little effort, it is still possible to delight and satisfy customers with promotions.

However, in today’s increasingly competitive and oversaturated online marketplace, standard offers are no longer enough to attract customers’ attention. Today’s savvy consumers need and want much more than a simple 10% discount or £10-off promo code.

With these high customer expectations and without any of the usual magic of the high street, eCommerce needs to get creative with their promotional strategies to tempt people in from the ‘shop window’. And how can you do this? Simple: design and deliver an unbeatable Promotion EX.

Create a Promotion EX during Christmas

You may already be familiar with the principles of Customer or User Experience (CX/UX), but you probably haven’t heard of Promotion Experience, or Promotion EX. Promotion EX refers to the curation of an end-to-end customer experience that delights customers and supercharges conversions in a way that discounts and partnerships can’t do on their own.

In the current climate, customers crave more than standard discounts. They crave tailored and seamless digital experiences delivered across all of your online channels. This covers payments, distribution, devices, marketplace selling and connected services. And in all of this, we also know that customers are seeking authentic and cheerful messaging. Fortunately, there are numerous ways to deliver what customers crave. 

To deliver on the promise of a great promotion experience, you’ll want to implement:

• Mystery discounts - Mystery discounts are a great way of embracing gamification principles to engage and delight customers — after all, everyone wants to take a peek inside of the (Christmas-themed) mystery box. With the right Promotions Platform, you can easily execute this strategy — for instance, you might offer customers the chance to open the box and ‘win 10% or 30% off everything’.

  Customers will be thrilled if they win the maximum discount, but they will still feel satisfied with the lower discount, especially if they were already considering making a purchase. Mystery discounts, sent via email or using other re-targeting strategies, are also an effective way to entice ‘lapsed’ customers back to your brand.

• Time-based codes - Time-based codes are another excellent way to drive conversions, as they incentivise customers to act sooner rather than later. Of course, you could offer straightforward, time-limited sales: ‘25% off all children’s toys for the next 24 hours’. But a more advanced technique — and one that more effectively leverages the psychological power of urgency — is to deploy time-sensitive, diminishing discounts. These are especially effective when you actually show customers the clock ticking down.

  For instance, you might send out an offer via email for a 25% discount that goes down to 20% after one hour, 15% after two hours and so on — with a clock embedded within the email, counting down the seconds. These forms of discounts can encourage customers to pull the trigger and click ‘buy’, and they’re also a brilliant way to slash your abandoned basket rates.

• Affiliate marketing - Affiliate marketing is an excellent way to drive targeted traffic to your site and improve your conversion rate — especially around Christmas time, as consumers turn to friends, family, and trusted digital personalities (influencers, podcasts, vlogs, etc.) for Christmas gift inspiration.

  At present, affiliate marketing accounts for a whopping 16% of all online sales. Affiliate marketing helps you target specific audiences, outsource some of your marketing efforts and engage authentically in the moments and communities where your customers identify. For more on this technique, check out our blog on Why Affiliate Marketing Works And How To Implement It Effectively.

• Promotions on social media - As we covered in the last point, delivering a great Promotion Experience demands that you meet your customers where they are. In addition to working with affiliates, you’ll probably want to offer promotions through your own social media channels. Remember: savvy online shoppers often check a brand's social media pages for promo deals before making a purchase. Giving your customers what they want means matching these expectations.

• On-site promotions - Just like you’d want to impress in-store customers with big displays and fantastic deals, you’ll want to give customers a festive, fun and seamless experience when they’re on your site. This means making smart use of activation solutions — if a customer has arrived from a partner or affiliate site, follow through with a bespoke, festive message that calls out and reinforces the promotion. And message all the way through the customer journey into the basket, with dynamic error messaging which can help customers qualify rather than incite abandonment.

  Or use your promotion to unlock a curated set of Christmas inspired products and offers. The code becomes the key, and a content gate gives you lots of opportunity to lay on the festive designs. Plus it provides a bit of theatre to what would normally be a jolly holly time.

Delivering Promotion EX

Although many of these tactics sound quite advanced, using a Promotions Management Platform can ensure that this process is smooth and easy for customers from code discovery to activation and beyond. A tool like Uniqodo can help you deliver a seamless, end-to-end Promotion Experience by:

• Generating and validating unique, single-use codes, which allow you to maintain full control over your promo campaigns

• Pulling data directly from your existing CRM to enable personalised customer experiences that are more likely to convert

• Delivering on creative promotions ideas, including time-limited discounts and mystery offers

• Performing useful A/B testing to land on the most effective strategies

• Managing brand partnerships that enable affiliates and influencers to access key data via a secure and permissions-based platform

• Running engaging loyalty programmes that keep customers coming back

At Uniqodo, we consider ourselves a SaaS+ company — not only do we offer a comprehensive SaaS platform to help you run smarter promotional campaigns, but we also provide a team of specialists dedicated to aligning your promotions with your desired business outcomes. Our Promotions Engineers can build bespoke solutions from your promotions, as well as advice on the best strategies to deliver the ROI that you want.

To us, the customer is everything — and that’s why we’re committed to helping you deliver the best possible Promotion EX.

Understanding your consumers’ needs is vital

During this Christmas period, retail success is all about understanding and anticipating your consumers’ needs. This year in particular, people need good cheer and ease of experience. While you might not be able to serve red wine or replicate the cosy experience of being amongst a festive crowd on your digital channels, you can still make this Christmas one to remember by delivering high-quality, customer-focused Promotion EX. 

Of course, data helps guide your strategy in the right direction, but at the end of the day, it comes down to creating a connection with your customers and tailoring their journey to who they are and what they want as individuals in a rapidly changing world. After all, Christmas is more than a day on a calendar — it’s an experience, and one that’s meant to be enjoyed.

Looking for more guidance in delivering a great Promotion Experience to your customers this holiday season and beyond? Check out our free eBook — The Next Generation of Promotions. Or get in touch today!