The 2020 Holiday Index: Five Things for Retailers to Know

Findings from our third annual holiday shopper survey.

Date:Nov. 17, 2020

InComm Payments recently completed our third annual Holiday Index, a research report on consumers’ expectations for the upcoming holiday season. This synopsis breaks down our key insights and takeaways for retailers based on our proprietary research.

 

It goes without saying that this year is unique, but the holidays are still happening. With many people more than ready for a cause for celebration this year, we asked consumers what they were (and weren’t) anticipating regarding their shopping habits over the next couple months.
 

 

1. Gifting is Essential – As Always 

It’s still a planned tradition, too.  We found that 80% of consumers plan to purchase and give gifts during the 2020 holiday season, and nearly 60 percent of holiday shoppers intend to spend about the same amount as they did last year.

 

Consumers are planning almost 95% of their gift card purchases, meaning they know what they want to give and where they want to buy them. That translates to trips to retailers, with 63% expecting to complete at least a moderate amount of holiday shopping in person. And three-quarters anticipate shopping at 2-5 different merchants in person, little changed from last year.

 

While gifting is still on the agenda, this holiday season will be absent some favorite traditions for many Americans. Respondents to our survey said they would miss social gatherings the most (44% of respondents), followed by travel (35%). (We can only assume those who chose travel as their most-missed activity meant the destination, not the journey.)


 

2. For Most Shoppers, It’s Safety First 

 

We asked about gift-giving styles again this year, with Bargain Hunters (Deals! Deals! Deals!) and Perfectionists (the perfect gift for everyone) ranking first and second. However, a new shopper profile – The ‘Safety First’ shopper who considers the safety of themselves and others as their primary concern – ranked as the third-highest profile. 

 

When it comes to safety, consumers are paying attention to the in-store experience and determining whether it meets their expectations. According to our survey, payment methods may make a difference. We found that 84% of consumers have some level of interest in touch free/contactless payments in light of COVID-19, and nearly half said they were “highly interested” in such payment options. Similarly, 74% agree that a retailer offering a touch free/contactless payment option is important to them.

 

When it comes to retailers they’re crossing off the list, the biggest concerns are: 

  1. Retailers not limiting the number of shoppers and/or enforcing social distancing

  2. Retailers who don’t seem to keep the store sanitized

  3. Retail employees who don’t practice social distancing

  4. Retail employees not consistently wearing masks 

 

With 69% of shoppers likely to visit the same merchant more than once this holiday season, retailers who want to remain destinations for those shopping trips should ensure their shoppers feel safe. What did consumers say about retailers they’ll be skipping? 

 

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3. Gift Cards are Number One – and the Lead is Growing

 

Gift cards came in as the top anticipated gift this year, a trend that shows no sign of slowing down. The National Retail Foundation has reported gift cards as the top choice in each of the past five years, and our results this year found that 94% of consumers indicated intent to purchase gift card(s) this holiday season.

 

What’s more, nearly 30% of respondents anticipate buying more digital and physical gift cards during this year’s holiday season than last year.

 

What gift cards are consumers hoping to receive? For closed-loop (branded) gift cards, the top category is Online Exclusive Retailer. Restaurants are second, remaining high on consumers’ wish lists despite changes to the sit-down dining experience – perhaps thanks to adaptions such as curbside pickup, expanded delivery options and outdoor/distanced seating arrangements. Big Box Retailers are third, with consumers indicating a focus on omnichannel retail options.

 


4. Digital is In

 

Consumers reported a significant increase in digital gift cards in the first two quarters of 2020, and holiday shoppers anticipate purchasing an average of four digital gift cards this season. The increase in popularity of digital gift cards speaks to a variety of advantages they offer consumers. Our respondents agreed that digital gift cards are: 

  • a safe option in light of COVID-19 (89%)

  • easy to send and receive (84%) 

  • as thoughtful as physical gift cards (70%), and

  • as thoughtful as other gifts (69%). 

Once again, omnichannel presence offers advantages to retailers, with digital gift cards being available for purchase and redemption online and in-store.


 

5. Post-Holiday Returns Have Their Own Concerns

 

Getting an unwanted gift is another holiday tradition. After smiling and thanking the gift-giver, what do consumers do with these gifts? Most choose to donate, regift or learn to like it, but 17% say they’ll elect to return the gift. 

 

Returning is something consumers are considering upfront in their purchasing, with 83% of holiday shoppers expecting retailers to be mindful of the pandemic in their returns process. Safety is still in their minds; in fact, 53% say they’ll likely skip smaller returns, but still make the trip for larger items. As with payments and safety precautions, the returns process will be factor for many consumers as they plan their trips this holiday season.

 

Shoppers have begun preparing for the holiday season, and retailers hoping to make gift-givers’ shopping lists should keep these takeaways in mind. Our experts are here to help offer more tips, insights and best practices in advance of the holiday season – and year-round! 

 

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