The 2021 holiday shopping season includes a unique mix of challenges and trends. Retailing
faculty from the University of South Carolina’s College of Hospitality, Retail and
Sport Management share their insights on what businesses and consumers can expect
from now through December.
What's the overall outlook for the retail industry this holiday season?
Karen Edwards: The 2021 holiday season is looking bright! According to the National Retail Federation,
which is the world’s largest trade association for retailers, overall sales for the
holiday season (Nov. 1 through Dec. 31) are expected to grow between 8.5% and 10.5%
over last year. This number excludes automobile sales, restaurants, and gas stations.
At the high end, holiday retail sales could come close to $860 billion. Online and
other non-store sales are growing faster than brick-and-mortar, with an expected 11%
to 15% growth over last year.
Michael Watson: Holiday shopping could be more segmented than ever based on income levels. Many middle-
to low-income households are decreasing (on average by 20%) or not purchasing holiday
gifts at all this year, whereas middle high- to high-end income households are increasing
their spending year over year, as stock market gains and investments have dramatically
improved their disposable income.
People still desire to spend on experiences (entertainment, travel, in-store events)
and this is up year-over-year, but many remain cautious due to COVID-19, with only
50% of the population comfortable with where we are in terms of overall safety related
to the pandemic.
Are there any items or product categories that you expect to be especially popular
Deborah Brosdahl: Electronics are always popular, and this year will be no exception. Bigger and better
televisions, smart TVs, headphones like Apple Air Pods Max and wireless earbuds will
be hot items.
Eating more meals at home during the pandemic highlighted the need for updated cookware,
kitchen accessories and electronics. So expensive cookware like the Le Creuset cast
iron/enameled Dutch oven, gourmet knife sets, air-fryers, instant pots, etc. will
be on many wish lists.
People are spending more on party supplies are also going to want to have special
outfits for entertaining especially since there has been a two-year gap in big social
gatherings, so special dresses and sweaters will be in demand. Anxious to get back
to “normal” and get outside, good hiking boots, tickets for traveling, and other travel
items such as suitcases will encourage people to keep moving. Meal subscription services
or subscriptions to streaming channels such as HBO, etc. will also be popular. These
were experimented with during the pandemic and many consumers found the convenience
and entertaining value of subscription services to be worth the money spent and time
Toys on a child’s list for Santa include anything Pokémon, this set of characters
is experiencing its 25-year anniversary and is as popular as it was upon its initial
introduction. SkyRocket Moji the Lovable Labradoodle, an animated dog, is predicted
to do well.
Are there any trends in consumer behavior or retail strategy that people can expect
Edwards: Since the pandemic, we’ve seen immense growth in online retailing. More people are
comfortable ordering online and will continue to do so. However, for many consumers,
the experience of being “in the store” is part of the holiday tradition, and we’re
expecting to see people step back into brick-and-mortar stores this year. The average
U.S. consumer will spend an all-time high of nearly $1,000 for the holiday season
in 2021, and for most of us, that will be divided between online and in-store shopping.
Watson: Holiday consumer behavior will be driven by reliance on trustworthy relationships
(online and in-store) and by convenience (accessibility, navigation, options).
With many people still hesitant to go out shopping, the reliance on others for information
continues to drive importance of product reviews in purchase decisions.
Research shows that:
- Ratings and reviews are the second most impactful factor when purchasing. 71% of consumers
say that reading reviews impacts what gifts they purchase for others, and 68% indicate
this content impacts what they buy for themselves during the holidays.
- 35% of shoppers indicate ratings and reviews will have a bigger influence on their
holiday purchases this year, compared to last. This number is significantly higher
— 55% — among Gen Z shoppers.
- In-store shopping regains some lost ground, but digital adoption is now a holiday
habit. Consumers continue to seek out conveniences, with 73% choosing standard delivery,
and BOPIS and curbside pickup exceeding pre-pandemic levels.
Trusted digital platforms that have been proven reliable over the course of the pandemic
will see increased traffic and use by shoppers who seek convenience and by those who
don’t want to shop in stores due to the pandemic. Good news for online retailers:
when people shop online and earlier, they spend more money on average per purchase
and in terms of overall spending behavior.
How will supply and labor challenges impact holiday retail?
Brosdahl: People have already started shopping for the holidays, especially considering the
attention and news that have highlighted the supply chain issues. They will buy what
they can now, and if they can’t find what they specifically want, they will make some
substitutions based on what is available. Goods will eventually make it to the stores
and I believe the stores will end up with more on their shelves later in the season
than in previous years. The main thing consumers will focus on is to have “something”
for all of those they love, rather than the “perfect” thing.
Holiday labor shortages being experienced by brick-and-mortar stores will keep driving
stores to up their hiring packages with higher wages, better hours, signing bonuses,
etc. These won’t solve all the labor issues, but it will lighten the load a bit. Consumers
will be waiting in longer lines in the stores etc., but many will be understanding
of this, especially if they can buy what they want earlier in the season and get their
shopping done earlier.
Edwards: The labor shortage will likely affect consumer wait time and service levels in stores.
But even more, it’s affecting the already-strained supply chain. The pandemic hit
many manufacturing countries very hard, with safety-related shutdowns and worker shortages
causing slowdowns in production. Shippers cut their schedules in response, but demand
for products actually grew during the pandemic. The global supply chain is still trying
to catch up. And with labor tight, shipments are moving more slowly, there are back-ups
in ports of entry, and a shortage of truck drivers means products aren’t getting to
fulfillment centers and stores as quickly. A word to the wise: shop early, and have
a “Plan B”.
What can retailers do to thrive this holiday season?
Brosdahl: In addition to online sales, trying to get shopping hours back to pre-pandemic operations
will be helpful to many stores as well as trying to find additional ways to make customers
happy. Many stores will keep pushing curbside pickup, free shipping, buying online
and picking up in the store to give customers options. In addition to these newer
options, some consumers will just want to get out and look around the stores again.
Making the in-person shopping experience as pleasant as possible and as “normal” as
possible will be noticed by many consumers. Helpful store associates, nice music,
pleasant smells and sights, free products and samples and Santa Claus will all help
consumers enjoy themselves while in the store itself.
Edwards: This year, having the inventory to meet consumer demand will be critical. Having
the product and getting it to the customer quickly is key. Large retailers, like Walmart,
are investing in supply-side wages, have their own fleet of trucks and drivers, and
can even charter ships. Others are working to bring more product into stores and fulfillment
centers. But even smaller stores can maximize their holiday sales by offering buy-online
/ pick-up in-store and curbside pick-up options.
Regardless of size, both brick-and-mortar and online retailers should also work to
maximize their customers’ holiday shopping experience — people are ready to spend
and want to enjoy a seamless process. Smaller retailers have the advantage of being
able to offer a more personalized shopping experience by getting to know their customers
well. Ideally, every brick-and-mortar retailer should have an online presence — whether
it’s a fully operating online store or just a storefront webpage. In addition, don’t
underestimate the benefit of maintaining social media accounts — consumers should
be able to find and connect with you.
Small retailers can also maximize the “Small Business Saturday” opportunity. Started
in 2010 by American Express, the Saturday after Thanksgiving is a great time to raise
awareness of the benefits of small businesses to local communities. Last year, U.S.
shoppers spent just under $20 billion on that day both in-store and online.
Deborah J. C. Brosdahl
Deb Brosdahl is an associate professor in the Department of Retailing at the University
of South Carolina, where she teaches retail management strategies and multi-national
retailing. Brosdahl's research focuses on consumer behavior especially with regard
to adolescents and most recently, in the area of sustainability. She also researches
in the area of merchandising education.
Karen Edwards is a senior instructor in the Department of Retailing at the University
of South Carolina. Recipient of the University’s 2019 Garnet Apple Award for Teaching
Innovation, the 2017 Faculty Integrity Award, and the 2010-11 Harry E. Varney Distinguished
Teacher of the Year Award, Edwards teaches in the areas of digital commerce, asset
protection and law-related issues affecting retailers. She also serves as interim
associate dean of academic programs for the university’s College of Hospitality, Retail
and Sport Management.
Mike Watson is an instructor in the Department of Retailing and store director and
faculty liaison for Gamecock iHub, UofSC’s Apple Authorized Campus Store. Watson has
more than 20 years of experience in higher education in various roles including instructional
designer for graduate-level online leadership courses and departmental lead for leadership,
communication, fashion marketing and management courses.