Three trends from this year’s shopping season that will stick around in 2022 and beyond
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2021’s holiday shopping season has been unlike any other. “Supply chain” entered many consumers’ vocabulary for the first time, Black Friday and Cyber Week suffered, and 2020-era expectations were turned on their heads.
Part of this is because of the ever-changing pandemic, but another part is because of new consumer habits and retailer trends that have started to take shape. Though the first piece of the puzzle will remain unpredictable until we’ve got COVID under control, we can keep tabs on the fledgling trends that will have long-term effects on the retail world.
In our webinar, “State of the Consumer: Black Friday, Cyber Monday, and the Implication for the Year Ahead,” Suzy’s Founder and CEO Matt Britton spoke to Rachel Tipograph, the founder and CEO of eCommerce analytics company MikMak, for her take on what’s changed this year — and which effects will linger.
Christmas keeps creeping
Holiday deals are beginning to appear in stores as early as October, more than a month before the traditional start of the season after Thanksgiving. What does that mean for Black Friday and Cyber Monday sales? Even though more consumers than ever (71%) planned to shop during those holidays, according to a survey Suzy ran in October, they were a bit less splashy this year.
MikMak even saw a slight decrease in conversion rates on Black Friday, said Tipograph. “It's really because of people shopping earlier — and I don't think it's shopping earlier because the promotions started earlier, I actually feel there were fewer promotions because of supply chain, inflation, labor costs, etc.”
Both retailers and shoppers were hoping to get ahead of supply chain issues. “Parents were buying toys in August because the media scared people,” Tipograph said. And those issues won’t let up anytime soon, meaning we’ll still see the Christmas creep in 2022 — and probably for much longer. “I think we're living in a global supply chain crisis for the next five years. I don't see how this immediately course-corrects,” said Tipograph.
D2C is dying — at least for small businesses
There are three factors to this. For one, venture capital firms broke up with D2C in 2020. “Every product got so good, largely in part to cheap capital and VCs flooding the system,” said Britton. But, he continued, “everything bubbles out at some point.”
And performance advertising just ain’t what it used to be thanks to Apple. “The D2C playbook everyone has deployed for the last 10 years has essentially been relying on buying Facebook ads, putting Facebook on your Shopify checkout cart,” said Tipograph. “That’s being rendered useless by the changes in iOS 14.”
Finally, there’s that triple threat of supply chains, labor shortages, and inflation. It’s an issue for all businesses, but D2C has been hit especially hard. “They're really being challenged now because they often rely on a third party distributor, versus someone like Mondelēz who owns their own distribution,” said Tipograph.
What does this mean? Expect to see more consolidation of power in the hands of larger retailers in 2022.
Data is everything
Privacy restrictions like iOS 14.5’s will only keep getting stricter — Google Chrome plans to block third-party cookies in Chrome by 2023. It’s becoming increasingly important to touch the consumer directly.
“Big companies like Coca-Cola in the past did not have to know who their buyer was by name,” said Britton. “That might not be the case when people adopt platforms like Drizly and Instacart and Amazon.”
And that adoption is happening rapidly. “Across all of the big CPG grocery brands — food, bev, alcohol, etc. — somewhere between 20 and 30% of my customer's revenue is now coming from e-comm, and many of these companies are projecting that it'll soon become 50%,” said Tipograph.
Meanwhile, savvy retailers are once again taking advantage of this. Major eCommerce players like Amazon and Walmart have a wealth of super valuable shopper data that marketers are less at risk of losing access to than the data on, say, Facebook.
“What they're trying to do is own the most amount of first-party data on the internet, so then they can monetize answering this question of ‘who is your customer?’ In the backdrop of all of these privacy changes, it's going to be more difficult than ever before for a brand manufacturer to answer that question,” Tipograph said.
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