Visa Study Sheds Light on Upcoming Holiday Shopping Patterns
A new study from Visa indicates that, while brick-and-mortar shopping will still be important during the holiday shopping period, digital efforts will be critical for the season and beyond.
The stakes are huge. According to the latest Back to Business Holiday retail report, 88 percent of consumers plan to buy and give gifts this season, despite the coronavirus pandemic. Nearly half of consumers plan to do most of their shopping in-person, at 48 percent, compared with the 26 percent who will primarily rely on e-commerce. Twenty-six percent plan on an equal mix of live and online.
Clearly small- to medium-size businesses, or SMBs, can’t afford to overlook Internet sales. And more have gotten that memo, particularly during the coronavirus era. Eighty-two percent of SMBs report that they’ve gotten online within the past year. Seventy-nine percent established an online presence over the past one to five years and 66 percent got online more than five years ago.
“Since the onset of the pandemic, the massive shift to digital has shown us that online experiences are here to stay and will only continue to accelerate,” Kevin Phalen, Visa’s global head of business solutions, told WWD, pointing out that half of consumers plan to shop online this year. “So it is important that small businesses move online, enable e-commerce to connect and engage with consumers now and beyond the holidays,” he said.
Globally, businesses that prioritize digital efforts tend to see the holiday period as an important sales opportunity over in-person-only operations, at 68 percent. Online holdouts cite concerns including security and fraud as reasons for their reluctance to embrace digital business.
But they may be leaving revenue on the table. Worldwide, customers who’ve shopped online more during the coronavirus lockdowns say they plan to continue relying on e-commerce, with 59 percent hitting the Internet for at least half of their holiday shopping.
In the U.S., most Americans plan to shop during the holidays, at 86 percent, and as many as three in five plan to do at least half of it online. For nearly a third of Americans, most of it will be done on the Internet. Only one in five plan to shop in-person exclusively.
As for where they shop, supporting neighborhood merchants has become a major movement for Americans, with 60 percent planning to dedicate at least half or more of their holiday spending to local stores. Globally, just 24 percent expressed the same sentiment, and more than one-third, at 36 percent, plan on a split between local shops and large retailers.
Wherever they patronize, it’s clear that gift shopping will amount to more than just a chore or task this season, and that’s true worldwide. Despite the pandemic, 88 percent of consumers globally plan on holiday shopping, displaying a need and resolve to restore some semblance of normalcy after a difficult and tumultuous year.
According to Visa’s report, digital gift cards will be all the rage. Consumers plan to gift more of them, at 32 percent, compared to previous years, leading tickets, activities and trips, at 19 percent, and digital entertainment, at 18 percent. That’s at least partly driven by uncertainties around COVID-19 measures, which has apparently stoked interest in giving flexible gifts.
Contactless payments, a trend already alight due to healthy safety fears, will also loom large during the holidays.
“We are seeing that consumer mentality has shifted. Consumers are looking for safer ways to shop, resulting in a rapid adoption of digital checkout experiences, [and] small businesses and retailers need to take note and adapt,” said Phalen. “Whether it’s an online checkout experience, through tap to pay in-store or via curbside pickup, small businesses need to listen to consumer demand and incorporate different digital payment solutions that are safe and limit contact.”
According to Phalen, holiday remains the biggest shopping moment of the year, despite challenges created by COVID-19. Most consumers in Visa’s survey still want to buy and give gifts, he said, and “small businesses must be ready to meet their new demands.”
The report precedes Visa and partner Female Founder Collective’s three-day virtual summit. What’s Next Fest, starting Sept. 22, will offer education and expert retail advice, along with programming in support of female Black-owned businesses.
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