Trading the US holidays: from comfort to optimism

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 26 November 2020

We look at some of key themes shaping campaigns through the holiday season in the US and what the retail environment could look like heading into 2021 as many businesses move beyond reprioritisation and reassessment to a broader reset of their models.

First phase and second waves

This holiday season will be unlike any other in the US. COVID-19 cases are on the rise and new mandates are being issued daily in support of social distancing. In some areas it’s the second wave, while in many, the pandemic remains in an elongated first phase. Nine months in, many of the trends in the food retail sector are becoming more sustained:

  • Retailers continue to invest in new technologies in support of operating clean and safe stores, including contactless payments and services
  • Ecommerce and digital commerce channels remain elevated, having been accelerated by a minimum of two to three years, with retailers investing in capacity and capabilities
  • Product offers are being reimagined to support consumers’ new behaviours, including a major focus on meal solutions, digital entertainment and health and wellbeing

Source: IGD Research

Pandemic fatigue

However, many consumers have been stretched by the changes thrust upon them by the pandemic; for many COVID-19 fatigue is a reality. Many have lost their employment and/or government support, others continue to work and educate from home, and most of the traditional seasonal social and entertainment options are greatly reduced this year.

Celebrating in a different way

Consequently, the holiday season incorporating Thanksgiving and Christmas, offers the comfort of the familiar. Although gatherings will be very different this year, smaller and home orientated, for many they represent an opportunity for a degree of normalcy among the complexity and concern of the pandemic.

Shaping customer communications

Comfort, familiarity and nostalgia are among the key themes which retailers and suppliers are leading with this holiday season. From Walmart to The Coca-Cola Company, these are some of the central messages of their communication plans, with ad campaigns celebrating the joy of being at home and exchanging gifts.

Hangover or new beginnings?

Post Christmas, consumers and retailers will face familiar and new challenges. The turning of the calendar on New Year’s Eve often marks a new beginning for many. However, the challenge of the pandemic will remain, potentially compounded by the onset of a more challenging financial reality for some consumers. A prolonged crisis will create a tougher economic backdrop, although the prospect of a new Administration in the US provides hope that a series of new relief measures will support small businesses and employment. The prospect of a vaccine being widely available in the first half of 2021 also adds a degree of optimism to the year ahead.

Understanding the legacies of the pandemic

For business in the retail sector, there will be much to consider, including understanding what will be the legacies of the pandemic. How big will ecommerce be next year and can it continue to grow? How will consumers think differently about health and wellbeing? Will the flight to centre store be reversed?

Reprioritisation, reassessment, reset

Over the last nine months, retailers and manufacturers have moved through different phases of the pandemic. Initially, there was a period of reprioritisation as they responded to lockdowns and changing consumer behaviours. As we started to measure the crisis in months, and some of those new behaviours became habits, there was a need to reassess operations. However, as we approach the first anniversary of the pandemic, many businesses are driving larger-scale changes. They are realising that the duration of the pandemic is helping to embed some of the impacts for a longer period, necessitating a broader reset of their business model.

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