How will the Delta Variant Impact the Retail Industry this Holiday Season?

By Udayan Bose, Founder and CEO, NetElixir

If last year taught us one thing, it’s that retailers need to expect the unexpected. Over the past several quarters, consumer habit changes have become less and less predictable. These curveballs shook up the scene and retailers either sank or swam. 

Fast forward to today, another pandemic-influenced holiday season is slowly approaching… where are we in terms of consumer sentiment and buying behaviors? The delta variant and a lack of widespread mass vaccination progress played a crucial role in us entering an endemic era. Over the summer, this caused many to speculate on how consumers would react and what that reaction would mean for marketers and retailers.

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Different Rulebook 

While panic and uncertainty spread amongst consumers, retailers expected a marketing surge during the back-to-school season. However, the digital marketing realm is constantly changing and consumers are no longer playing by the same rulebook. For example, Prime Day didn’t trigger its usual back-to-school shopping spike which signified long-term delays, which was shocking because pre-pandemic it was a surefire spike in retail sales. So… why did this happen?  

At the start of summer the retail industry experienced a dip in sales that was attributed to COVID-19 restrictions lifting and consumers spending their money mostly on experiences, outdoor activities and items they actually needed versus wanted. This tripled over into the back-to-school season when consumers didn’t rush to purchase items like they have done time after time. The sharp decline in sales forced retailers to take a step back and pivot their focus toward learning consumers’ unique needs and what their expectations are. By doing so, retailers who stayed ahead of the curve mastered the art of personalization, kept their loyal customers and expanded brand awareness.  

Let’s take a look into where we are now: the delta variant caused many in-person event cancellations and forced indoor masks and vaccination mandates across the country. This curveball had retailers speculating over consumer spending habits. Will spending shift back to items while opportunities for experiences become less available? How can retailers prepare and what can they expect between Cyber 5, Black Friday and Christmas? 

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Predictions for this Holiday Season

Retailers should expect any associated sales spikes to happen closer to the holiday in question. Although we are still a few months away, the make or break moments for marketers and retailers is now 

In fact, data forecasts suggest that aggregate ecommerce sales will experience a 6-7% YoY increase in the November to December holiday shopping period, with total online sales likely to exceed 20% of total retail sales in the nation. Last year, online retailers ran holiday promotions ahead of the upcoming date. We can expect to see some online retailers run teaser holiday promotions to induce early shopping behaviors this year as well. This activity will lead to Thanksgiving week’s promotional drive.  

In mid-November we are predicting major deep discounting throughout that timeframe, which means retailers should look to get creative with category-level and product-specific promotions. However, the most important week during this year’s holiday season will be the week of December 5 – We anticipate some large retailers will test creative promotional strategies during this week, therefore, mid-size and smaller businesses will need to be nimble and ready with their gameplans.

Moving along to the week before Christmas, buy-online-pick-up-in-store (BOPIS) commerce will surge. Most retailers will lower their digital marketing spend this week, as the ground shipping cut-off date for Christmas will most likely be December 14. Retailers should anticipate inventory complications due to supply shortages and high demand.  

The time frame that retailers should be prepared for in terms of mobile spiking is December 19th- December 21st. We can expect more inventory complications and additional BOPIS surge. This leads us right into the after-Christmas sales. Deep discounts on post-holiday inventory will influence the “Me-Buy” week, which means we will see more consumers shopping for themselves.

As we are entering a new endemic era, now is the time for retailers to plan their pivots, and implement key strategies to overcome pandemic influenced obstacles and prepare for the upcoming holiday season. We know that the pandemic changed consumers expectations and needs, what we did not account for was that their buying behaviors and consumer sentiment would also change. Retailers and marketers can no longer afford to be passive. If they wish to stay ahead of the curve, they must adapt and cater to their customers and begin strategic planning…now

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