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7 Consumer Trends That Will Dominate This Year’s Christmas Shopping

·7 min read
Woman shopping at Christmas market.
Woman shopping at Christmas market.

Though Christmas travel will likely be down because of the pandemic, holiday shopping is anticipated to be as strong as ever. The National Retail Federation expects holiday sales to reach between $755.3 billion and $766.7 billion — up as much as 5.2% year over year. Though spending is anticipated to be up — not all consumers can afford to splurge on gifts. A poll from Debt.com found that of 1,200 people consulted, nearly two-thirds of respondents said they will spend less this year on the holidays.

Read More: Where To Get Unique Holiday Gifts Without Leaving Your House

How can overall retail spending be up if people are spending less? It comes down to one of the tougher truths of this pandemic: The crisis hurt the poor in ways that it did not hurt the rich.

“Under the pandemic, many low-paying jobs disappeared, small businesses suffered, and the stock market recovered quickly and positively, especially the technology sector. As a result, the poor became poorer and the rich became richer,” Dr. Tenpao Lee, a full professor of economics at Niagara University, told GOBankingRates.

“At the very end of the day, the retail analyst predictions will likely be right: spending will be up, but only because the rich will spend so much that overall consumer spending may increase,” Dr. Lee said.

Beyond how much they’ll be spending, how will consumers spend and on what? What are their values, desires and objectives? Here’s a look at 7 major trends that will dominate Christmas shopping this year.

Last updated: Dec. 7, 2020

Women buying online with credit card.
Women buying online with credit card.

1. Most Shopping Will Happen Online

Not only will spending likely be up like Dr. Lee said, but online spending will be up. The consumer predilection for online shopping was burgeoning well before COVID-19 was a concern, but the pandemic turned the growing interest in e-commerce into a here-to-stay phenomenon. According to a recent Bank of America survey, nearly 65% of consumers plan to shop online this holiday season.

“In-person shopping this year will decline while digital/online shopping will increase, as American shoppers adjust to new COVID-19 restrictions and seek greater safety while still celebrating,” said Silvio Kutic, CEO of Infobip, a cloud communications company that recently published research on 2020 holiday shopping behaviors. “With the onset of the pandemic, companies — including retailers, brands and banks — rapidly scaled their digital transformation, which should help them through the holiday season.”

Upon examining more than 14 million companies in its database, the software company ZoomInfo found that 56% more companies added online shopping cart technology in August 2020, compared to the number that added this technology in February 2020.

woman shipping gift with gift receipt
woman shipping gift with gift receipt

2. Free Shipping Will Be The Most Desired Perk

According to a new survey from Shopkick, for most consumers (70%), free shipping is the most compelling perk that online retailers can provide this year. Dragging in second place is discounts, with just 23% of those surveyed deeming it most desirable. Large return windows is in third place, with 4% citing that as their top perk.

But what consumers want most could prove to be the hardest to get as retail analysts predict a holiday “shipagedon,” wherein shipping capacity is exhausted by the overwhelming demand.

“With online shopping’s increasing popularity, some consumers (52%) have noticed rises in shipping costs,” said Dave Fisch, general manager of Shopkick. “Of those, 72% say pricey shipping will impact their decision to shop in-store versus online this holiday season. Eighty-four percent say it will influence which online retailers they shop with.”

See: Free Delivery Options To Get Your Through This Holiday Season

Berks County, Pennsylvania, USA - May 19, 2020: Employee puts groceries in customers car at Weis Markets curb side pick-up.
Berks County, Pennsylvania, USA - May 19, 2020: Employee puts groceries in customers car at Weis Markets curb side pick-up.

3. Curbside Pickup Will Be Even More Appealing

Curbside pickup surged during the pandemic and will continue to be an attractive option for online shoppers. This alternative might even become more popular as news of a possible “shipagedon” spreads.

“With warnings over expected shipping delays as online shopping activity spikes this holiday season, more consumers are ordering online but choosing to pick up in store or curbside,” said money-saving expert Andrea Woroch. “Fewer people will rely on shipping especially at the last minute when they fear items will either not make it in time for the holiday or may get cancelled because of low inventory. Picking it up the same day via curbside or drive up ensures you get your hands on those gifts instantly while benefiting from shopping online and all these e-deals.”

Find Out: 30 Ways To Save on Holiday Gifts

Smiling young African American woman doing some online shopping with a credit card and laptop while sitting on her living room floor.
Smiling young African American woman doing some online shopping with a credit card and laptop while sitting on her living room floor.

4. Credit Will Be King

While financial advisors strongly caution against using credit cards — especially when it means digging yourself into debt — credit will be as popular as ever a payment option this season. A recent survey from CreditCards.com found that 48% of consumers already in debt will resort to credit cards for their holiday shopping. Making credit cards extra attractive are incentives like 0% APR offers and enhanced security.

“When you use debit, it’s your own bank account on the line, and if you become the unfortunate victim of fraud, you might be waiting to get money back into your account, which could affect other financial obligations,” said Nathan Grant, senior credit industry analyst, Credit Card Insider. “With credit cards, it’s the issuer’s money on the line, and there are stronger federal protections to help prevent further damage to your financial situation.”

Woman in shopping mall with bags shopping during pandemic and wearing face mask against coronavirus.
Woman in shopping mall with bags shopping during pandemic and wearing face mask against coronavirus.

5. Shoppers Care as Much About Store Policy as They Do Price

“Whether shopping online or in stores, shoppers are looking for more flexibility from merchants when it comes to things like return policies and price adjustments,” said Jeanette Pavini, author, The Joy of $aving. “In certain states stores have closed their dressing rooms, so buying clothes can be an iffy proposition. Consumers want to know they can easily exchange or return things that don’t fit — which means not being charged for return shipping and having a generous window to make the changes. Savvy shoppers are also keeping receipts to make sure they can receive price adjustments throughout the holiday season. If you buy something that goes down in price within the price adjustment time period, many stores will refund you the difference between what you paid and the new sale price.”

Large back yard with grass and covered patio with firepit.
Large back yard with grass and covered patio with firepit.

6. The Most Popular Products Will Be Home-Related

Home goods have been flying off shelves since the pandemic struck, and like the deadly virus, that trend is still going strong.

“Another coronavirus surge means people are going back to (or staying in) self-quarantine. This means we can expect furniture, home goods, and DIY supplies to stay popular throughout the holiday season,” said Michael Bonebright, consumer analyst with DealNews.com. “Fire pits, in particular, have been hugely popular this season, as the weather has turned cold but shoppers still want to get outside. Last year, we saw entry-level fire pits priced from $40 in December, with higher-end models priced around $100. Be aware that the surging popularity of these items means they’re likely to go out of stock quite quickly.”

Open sign in a small business shop after Covid-19 pandemic.
Open sign in a small business shop after Covid-19 pandemic.

7. Consumers Will Shop Local To Help Their Communities Survive

The COVID-19 pandemic has scorched the economy, and small businesses felt the brunt of the burn, with many clinging to life as the third wave crashes down. Shopping with a conscience is a trend that has taken off with millennials in recent years and will uphold this holiday as consumers look to support businesses that could really use the money.

Brittany Kline, a personal finance expert of The Savvy Couple, anticipates that consumer interest in local establishments will be greater than in previous years.

“Whether it is purchasing a gift card from a locally owned restaurant or a gift card to a local hair salon, people are looking for ways to shop local,” Kline said. “COVID hit local small businesses hard this year and many people are looking for unique ways to support them this holiday season. Here in New York we still have small businesses that are closing due to increased positivity rates. Many of these local businesses will need to close for good if they are not able to open and be able to run their business like in years past.”

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This article originally appeared on GOBankingRates.com: 7 Consumer Trends That Will Dominate This Year’s Christmas Shopping