News: Predictions and Insights on 2021 Holiday Shopping

The holiday season is around the corner, which can be a make or break time for retail. After 2020’s unpredictable holiday season, the question lingering for 2021 is: Will spending continue to serge, or go in reverse? 

Using expert research from Criteo’s “2021 Holiday Commerce Report” and Salsify’s “2021 Holiday Shopping Trend Predictions,” we look into the numbers and see where the 2021 holiday shopping might rise and fall. 

Overall holiday sales set to increase, again

In 2020, we saw a surprising increase in holiday sales despite the COVID-19 pandemic. Last year, Americans spent $629, on average, during the holiday season, and it seems spending may rise this year.

Experts at Deloitte expect the growth to continue in the 2021 holiday season. The increase is expected to be 7% to 9%, bringing the total holiday sales between $1.28 trillion and $1.3 trillion. 

KPMG echoes this prediction, as it anticipates a 7% growth in 2021 holiday sales. What’s more, this 7% growth would nearly double the historical annual growth in the industry. 

This flies a bit in the face of what some experts expect amid a pandemic. Of course, this pandemic hasn’t gone the way most experts would have expected, as house prices and stock values surged too. 

E-commerce will continue its rise

During the pandemic, e-commerce boomed as shoppers shied away from physical stores and opted for online shopping. This resulted in a 32% growth in e-commerce shopping in 2020, according to the Salsify report.

The report predicts this growth will continue into 2021. Its report indicates a 16.8% compound annual growth rate (CAGR) between 2020 and 2021 shopping online. 

While the pandemic may have fueled some of the shift to e-commerce, this isn’t a new trend. In 2014, 14% of all retail sales were through e-commerce, according to Criteo. This grew to 16% in 2019 and reached 19% in 2020.

Criteo believes we’ll see a mix of online and in-person shopping in places where COVID-19 is well-controlled. In areas with strict COVID regulations and lockdowns, we may see consumers lean into e-commerce. 

The one outlier in this continued shift to e-commerce may be older shoppers. According to Salsify, while this generation seamlessly moved to online shopping, Criteo believes they may shift back to their comfort zone in physical stores in 2021. This could result in a downward tick in the percentage of older Americans shopping online. 

Product discovery will remain mixed

The holidays are a time when shoppers are in discovery mode, meaning they are trying to find new products to give as gifts. This will cause a surge in discovery during the holidays, but how shoppers will find information on these products is surprisingly equal. 

In a Criteo survey, the company found that 39% of product discovery happens via search engines. After that outlier, the remaining four methods are quite equal: 

• Physical stores: 33%

• Brand websites or apps: 32%

• Retail websites or apps: 29%

• Online ads: 26%

Prepare for another busy holiday season

All the reports indicate we’re in for another busy holiday shopping season, as predicted spending continues to rise. That said, in-store traffic may remain consistent, as e-commerce shopping continues to grow — the one exception being older shoppers’ who are expected to shift back to physical stores.

Whether you’re heading back into the stores or sticking to the comfort of your laptop or smartphone, be prepared for another busy holiday season, despite the pandemic. With supply issues tightening inventory in stores and potential shipping delays, you may want to start your shopping early to stay on budget and find the gifts on your shopping list.