There is no doubt that 2020 will be dissected, analyzed, scrutinized, and dramatized by historians, sociologists, psychologists, scientists, politicians, journalists, and Hollywood directors and writers for decades to come. While there is plenty of time to capture and catalog history, both consumers and marketers are faced with the reality of a holiday season unlike any other.

The chaos-inducing cocktail of coronavirus health concerns, social distancing measures, travel restrictions, the election, unemployment, increased strain on the United States Postal Service, retail closures, virtual learning challenges, and social unrest is shaping up to be a perfect storm of events likely to drive record e-commerce sales this holiday season. According to Deloitte's annual holiday retail forecast report, e-commerce holiday sales will "surge" by 25% to 35%, compared to a 14.7% increase in 2019. And SalesForce is predicting global online sales to reach $940 billion, a 30% increase over 2019.

In my role, I speak to existing customers, our partners, and marketers who are considering naming New Engen as the agency of record. All of them are asking for our view of the macro trends we are seeing and how to best navigate this holiday season.

Be prepared to adapt quickly as signals come in and the season unfolds

Blinds.com CEO Jay Steinfeld says, “Charles Darwin would have built a killer company. He knew it’s not necessarily the strongest or the first to arrive who are the most likely to survive; it’s the most adaptable who win in the end.”

I could not agree more, and as a first step towards being prepared, we recommend aligning your internal teams and external partners around:

• Positive and negative signals to look for so you can spot them early and take advantage of opportunities or mitigate risks
• Decision-making criteria with multiple contingency plans so you can rapidly optimize media mix, creative, supply chain logistics, pricing, and staffing

Adapting quickly will be more important than ever as the holiday window will be much more compressed and unpredictable.

Demand may start earlier and be more evenly distributed across a smaller window of opportunity

Amazon’s decision to postpone Prime Day 2020 for months has already changed the game. Several of our existing clients experienced a lull in sales and in the absence of any changes to their campaigns or other macro-societal events, we believe Prime Day is the culprit.

Other large retailers are following suit. Walmart is promising consumers an “all-new Black Friday experience,” expanding their online promotions and offering them over a longer timeframe throughout the holiday season. 

With COVID-19 still spreading, social distancing guidelines and consumer health concerns will push many traditional in-store shoppers online as well. Black Friday is not going to be the same this year and Cyber Monday will likely expand into Cyber Week or even Cyber Month as retailers and consumers navigate our new normal.

Safe to say, we are not in Kansas anymore. Last year’s data and even marketing plans made pre-COVID are likely to be directional at best. We recommend:

• Interrogating past assumptions and plans made earlier this year
• Testing new channels, creative messaging tactics and audiences now, so you are ready to optimize and scale based on key learnings when it matters most

Strains on the postal system are leading to earlier shipping cutoffs, squeezing the most active shopping period into a smaller window

Despite brands attempting to pull the start of the holiday season forward, the distraction of the election and virtual learning challenges have been suppressing retail sales across a number of verticals throughout September and into October. These verticals include back-to-school apparel, educational/entertainment subscriptions for kids, and some direct-to-consumer CPG products. We expect this trend to continue until shortly after the election, when many consumers will turn their attention from the news to holiday shopping. This will effectively compress the holiday shopping season by at least a few weeks.

(Note: Even if retail starts to rebound before then, marketers will pay a premium on Facebook. Political ad spending has pushed CPMs up as much as 85% so far and the projected spend could take it even higher.)

The holiday shopping window will compress even further due to USPS, FedEx, UPS, and Amazon moving up Christmas shipping cutoff dates. All four are paying attention to the impact COVID has had on domestic travel. In April, TSA reported that domestic travel dropped by 96%.

The industry has seen only modest improvement as stay-at-home orders have been eased. As recently as August, domestic travel was down 75% compared to 2019. Just yesterday, Delta told investors they expect it to take two years for the airline industry to fully recover.

It is safe to say that our fellow Americans will stay home this season and will not be delivering gifts in person. This will put intense strain on shipping companies and the US Postal Service this season.

To prepare for the most dramatic effects from shipping delays and early cutoffs, we recommend:

• Exploring a variety of messaging options to keep consumers aware of anything that may affect their planning
• Set clear delivery expectations and include “last day to ship” messaging in both ad creative and in multiple sections of your website, especially throughout your purchase funnel. Refresh dates as the situation evolves.
• If your products are available both in-store and online, decide when to shift to in-store messaging and BOPIS (Buy Online, Pay In-Store), giving late shoppers more options for getting what they need in time
• Offer multiple shipping options (USPS or FedEx, ground, or 2-day for example) if possible, to ensure consumers have options to fit their needs

COVID-19 is driving more shoppers online and changing what we spend our money on

With large gatherings still restricted in most of the country, we expect the majority of gifting will be focused on tangible products, versus experiences or services. Live Nation, the world’s largest events promoter, saw revenue decline 98% in Q2 ‘20 due to widespread cancellations of live concerts. Several artists have scheduled drive-in shows, but these have been mostly one-offs and will not work during the cold, wet, winter months in most parts of the country. The movie industry has also suffered losing as much as $50b according to the World Economic Forum. Buying behavior that has traditionally been focused on tickets and passes will shift elsewhere this season.

Additionally, coronavirus stresses on the retail sector have led to store closures and bankruptcies for large retailers and small businesses alike this year. For those that are still open, in-store revenue is expected to decline significantly due to consumer anxieties about physical shopping during a pandemic. eMarketer reports that nearly half of all consumers will be more likely to shop online in 2020 than they were in 2019.

(Source: eMarketer)

Compounding the “move to digital,” eMarketer also reports shoppers aged 55 and up are the fastest growing segments in e-commerce, seeing double the growth of younger segments in number of online shoppers expected in 2020 versus 2019.

(Source: eMarketer)

Regardless of what vertical your brand belongs to, preparing for increased load across every aspect of your customer relationships is a good idea. We recommend:

• Ensuring all your web properties have the necessary load capacity to bear a significantly higher amount of traffic than normal
• Checking inventory (especially for high-selling products) more often than usual, and test your fulfillment system’s ability to restock and update inventory under increased strain
• If you offer products both online and in-store, have your UI/UX/Engineering teams audit your website to avoid crashes, tracking issues between e-commerce and BOPIS sales, and overall site experience
• Setting clear expectations with fulfillment center staff around potential increases in gift-wrapped packages or personalized messages
• Expecting higher traffic for customer service lines and prepare messaging for consumers about turnaround time on returns and exchanges

I know...it feels daunting. You do not have to eat the elephant all at once.

Marketers are not immune to feeling overwhelmed by all the significant hurdles we are all navigating. I like to think about eating the elephant one bite at a time... breaking large complex challenges into management bite sized chunks.

• For this holiday season, we’ve found it helpful to start with a shared set of expectations:
• Plan for a season that both starts and ends earlier than normal
• Be ready for more traffic and a higher volume of online sales
• Expect volatility and be ready to adapt quickly
• Interrogate and test past assumptions – last year’s creative and audience strategies may not work for this year’s customers
• Take some big swings early – test new channels, creative messaging strategies & audiences now, so you are ready to take advantage of a “Cyber Month” surge
• Any fulfillment system needs to be stress-tested in advance of a busy season
• Create a calendar with important dates, including shipping cutoffs
• Make sure everyone from top to bottom is aligned, and include critical partners in these discussion

Thank you for taking the time to read this post. I hope you found it informative and useful. I would appreciate learning what your Cyber Month plan looks like. What are your biggest concerns? What are your biggest opportunities? If you would like to discuss how any of it might affect your business and what to do about it, please reach out to your New Engen account director. And if you would like to discuss these topics with other marketers, please let me know. We will be hosting an informal round table soon.