Holiday Sales Are Starting Earlier Than Ever. Here’s Why
Temperatures across much of the country are soaring this week, but it’s a winter wonderland at many of the country’s biggest retailers.
If the holiday creep seems bigger than usual this year, it’s not your imagination. Retailers are extending their holiday sales as they gear up for an especially long shopping season.
Why the rush to start the holidays sooner? Blame it on Covid.
“Retailers are responding to social distancing guidelines [this] year and preparing for potential decreases in spending by kicking off promotions earlier than we’ve ever seen,” says Dosh CEO Ryan Wuerch.
Wuerch says Covid-19 safety protocols require a more elongated approach to holiday marketing. Kohl’s, L Brands, and Macy’s have all referenced pulling forward holiday promotions, and Amazon’s Prime Day later this month seems perfectly timed to pull in early holiday shoppers.
Although brick-and-mortar retailers are expecting fewer in-store shoppers this season, they’re still facing the challenge of how to increase safety for shoppers who do show up at their stores in person. Getting shoppers in early spreads out the crowds and gives people longer to spend as they continue shopping right into the holidays.
“Brands want every shopper who wants to purchase in-store to have the opportunity to do so, but with social distancing guidelines, stores need more time to shuffle shoppers in and out,” Wuerch says.
Big box retailers are betting that extended promotions and cashback deals will help influence and drive sales, particularly on their e-commerce sites for those shoppers that can’t make it in-store.
Instead of one day of frenzied shopping, retailers are encouraging shoppers to do their holiday buying early. While the approach may help accommodate social distancing and limit crowds, Wuerch says it has some pretty significant downsides as well.
Leaning into heavily discounted items and extending holiday sales to catch up on losses may actually end up doing more harm than good, particularly for big-box retailers and brands that rely on an influx of shoppers in stores during the holidays. Instead, Wuerch believes a better approach is to appeal to shoppers’ cautious spending and embrace alternative forms of promotions that won’t negatively impact revenue.
Wuerch’s company, Dosh, is a cashback platform that’s used by retailers like Walmart, Costco, and Sephora. He says the cashback approach is far more successful at encouraging spending than discounting items and running holiday sales.
While saving money is a top priority for almost all shoppers, a recent holiday shopping survey by Dosh found that value services like curbside pickup and faster delivery are also top priorities this year. Sixty-four percent of shoppers in Dosh’s survey said they are comfortable shopping at a store today, and 23% said they’ll be comfortable shopping within the next 30 to 90 days. Thirteen percent of those surveyed said they won’t feel comfortable shopping at a store until there is a Covid vaccine.
“This holiday season gives brands the opportunity to be more innovative and creative in how they market to the consumer,” Wuerch says. “It is important for brands to incentivize consumers to shop this year, but traditional promotions, like long-term discounts, run the risk of setting retailers back further.”
If retailers are looking towards the holiday season to make up for lost sales, they’ll need to do more than just discounting items a few weeks early. Over the next few months, Wuerch anticipates that we’ll be seeing more omnichannel services that make the shopping experience seamless. The unique experiences that brands create and deliver this holiday season will raise the bar for retail going forward.
“The experience of shopping is dramatically different than what it was last year, with more people than ever shopping online,” Wuerch says. “Shopping will remain unpredictable for the foreseeable future, and brands will need to bridge the divide between their online and offline experiences … Retailers can use this time as an opportunity to innovate and mold the future of what shopping will look like.”
Stephanie Miles is a senior editor at Street Fight.