46% retailers expect sales rise in festive season: survey

13 Nov '20

4 min read

Pic: Michele Ursi / Shutterstock.com

US and European retailers are cautiously optimistic about the festive shopping season, despite uncertainty around physical store openings and holiday sales patterns, suggests Capgemini’s annual holiday survey, according to which 46 per cent of retailers expect a rise in sales and 49 per cent of shoppers expect to shop online more this holiday season than in previous years.

In anticipation of this, 93 per cent of retailers have taken deliberate steps to bolster their online offering; 50 per cent have improved their website or e-commerce proposition, 34 per cent have increased their web traffic capacity and 21 per cent have introduced new virtual shopping experiences.

To further attract customers, 78 per cent of retailers will offer greater discounts both online and in-store, while a third plan to offer a larger range of discounted products online.

The interviews were conducted online by Sapio Research on behalf of Capgemini in October 2020. The retailer survey was conducted among 851 retail managers across six regions: the United Kingdom, the United States, Germany, France, the Netherlands and Scandinavia, in companies with at least 250 employees. The consumer survey was conducted among 6,588 consumers across the same 6 regions, Paris-based Capgemini said in a release.

However, despite these preparations, retailers are less confident that they can accurately predict sales patterns this holiday season compared to last year (39 per cent compared to 55 per cent in 2019).
The threat of lockdowns has been the leading cause of uncertainty (54 per cent), while half of retailers (50 per cent) blame supply chain disruption and almost one in three (30 per cent) say the data they base their planning on isn’t accurate due to COVID-19.

At the same time, only 14 per cent consumers expect to spend more than usual this Black Friday, with just over a third (35 per cent) suggesting they plan to spend less. Less disposable income was cited as the main reason for this (43 per cent).

The biggest spenders this holiday season will be younger generations. More than a third (37 per cent) of 18-24-year-olds and 40 per cent of 25-34-year-olds said they had saved money since the start of the COVID-19 pandemic with the intention of spending it around Black Friday and the holiday sales period.

Consumers in higher income brackets are also more likely to spend more this year than previous years. Compared to a global average of 14 per cent, 24 per cent of those on a salary of £64,000 and above plan to spend more.

When it comes to what people are intending to buy, over half of all holiday season purchases (52 per cent) will be for essential items. Consumers will prioritize essential goods for themselves and others (44 per cent) over buying gifts (35 per cent) or treating themselves (21 per cent). However, luxury items, which only 18 per cent of consumers plan to buy, remain in demand for younger age groups (27 per cent) and those at higher income levels (34 per cent).

Almost half of shoppers expect to shop more online this holiday season than in previous years, with lockdowns enforcing this in some regions. Globally, the preference for in-store shopping on Black Friday is set to drop from 39 per cent last year to 28 per cent this year.

The biggest physical footfall decline will be seen in the United States, where in-store shopping is expected to drop by 15 percentage points: just 27 per cent of holidays purchases will be made in shops this year, down from 42 per cent last year.

For those consumers who are able to shop in-store, 33 per cent will only go to shops when they know what they want to purchase and 32 per cent will research what they plan to buy in advance, suggesting that impulse spending will fall.

Fibre2Fashion News Desk (DS)

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