Retailers boost online offerings as they face unpredictable holiday season

Retailers are feeling cautiously optimistic about the festive shopping season, despite uncertainty around physical store openings and holiday sales patterns during the coronavirus outbreak.

That’s according to research from Capgemini, involving 851 retail managers across UK, US, Germany, France, Netherlands and Scandinavia, in companies with at least 250 employees.

46% expect an increase in sales and 49% of 6,588 consumer respondents (across the aforementioned countries) will shop online more this holiday season than in previous years.

In anticipation of this, 50% of retailers have improved their website or e-commerce proposition, 34% have increased their web traffic capacity and 21% have introduced new virtual shopping experiences.

78%, meanwhile, will offer greater discounts both online and in-store, while a third plan to provide a larger range of discounted products online. However, they are less confident that they can accurately predict sales patterns this holiday season compared to last year (39% compared to 55% in 2019).

The threat of lockdowns has been the leading cause of uncertainty (54%), while half of retailers blame supply chain disruption and 30% say the data they base their planning on isn’t accurate due to Covid-19.

Lockdown blues

While Capgemini’s research was conducted before new lockdowns were put in place in nations such as France and the UK, those regions where retailers are currently set to stay open in November are still affected.

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

For those consumers who are able to shop in-store, 33% will only go to shops when they know what they want to purchase and 32% will research what they plan to buy in advance.

93% of retailers have taken steps to attract customers in-store, 50% have restricted numbers in their shops to ensure social distancing, while 43% have introduced more touchless payment options.

With lockdown restrictions due to relax in December in the UK and France, a late surge in Christmas shoppers could therefore be more easily accommodated.

“The holiday season has always been hard for retailers to predict, but supply chain disruption, consumer caution and changing government restrictions means this year is full of uncertainty,” says Tim Bridges, Global Head of Consumer Goods and Retail at Capgemini.

“Despite this, retailers recognise that sales will shift online and have invested in their e-commerce offerings, with many businesses increasing payment options, opening up new delivery methods or bringing the in-store experience online through initiatives like virtual dressing rooms.”

“The real winners will be those that can digitally streamline their operations and supply chains, so that they can easily scale up and down to meet sudden surges and decreases in consumer spending,” he concludes.