Talking Point: Why you need to do your Christmas shopping now

Retailers want you to shop early, and shop local, for good reason, writes Louise Grimmer

USUALLY at this time of year I write about Christmas shopping. I generally tend to wax lyrical about how much consumers will be spending, what they will be buying, and of course, how important it is to support local stores. But Christmas this year is like no other.

Retail experts and analysts concede this year is a bit of an unknown in retail and shopping trends. The Christmas shopping period is always important for retailers, but this year is the most significant in history for retailers.

One thing is certain, much more shopping will occur online. Over the past few months, we’ve seen a decade’s worth of trade shift to online stores. The acceleration in online shopping has been nothing short of extraordinary.

In Australia, despite the coronavirus pandemic, consumer confidence is high. Last year Australian consumers spent $52.7 billion on Christmas and this year they are again tipped to spend up big. So, what will Christmas shopping look like this year.

I predict five major trends.

First, shopping starts now! If you’re like me and you haven’t yet started your Christmas shopping, you are in the minority. About 50 per cent of consumers shopping online this Christmas have already started (or finished) shopping. Concerns about delivery dates and parcels reaching recipients on time have fuelled a rush to online stores much earlier than we’ve seen before.

Similarly, many shoppers have well and truly started their in-store shopping and I predict we will see healthy numbers of consumers shopping in physical stores despite health concerns, as people try to ensure their purchases will be available for gifting by Christmas Day. Retailers will be doing their very best to coax procrastinators to shop early to avoid those last minute logistical nightmares which can drive up costs for stores.

Second, thanks to COVID-19, lockdowns and health concerns mean many more people will shop online this year. It is predicted that online sales will account for about 15 per cent ofretail spend in 2020. This time last year it was about 9 per cent. This represents dramatic growth in just a few months.

Retailers have spent much of 2020 either improving their online stores, or actually building them if they weren’t offering this option before COVID-19.

University of Tasmania retail expert Louise Grimmer in North Hobart. Picture: Matt Thompson

Once retailers have an attractive and functional online store, uniting consumers with their purchases is the next challenge. Growth in click and collect, kerbside delivery and improvements in packaging and delivery have been top of mind for retailers. I would describe this as a shift from “products, pricing and promotions” to “picking, packing and posting”, in other words we know shoppers will be online more than ever this year, so retailers are working extra hard to get purchases into consumers’ hands in the most cost-efficient manner.

Costs associated with packing and delivery have been a challenge for retailers this year. It’s much cheaper for retailers to have consumers come and shop in their stores. Despite rent and outgoings, having people come into stores, pay and take away their purchases is much cheaper and more efficient than having to process hundreds of orders, pack them up then pay for postage (especially when more consumers are demanding free delivery). And then reverse costs occur when consumers return online shopping. Those costs all add up for online retailers.

Third, with more people shopping online, delivery is predicted to be a headache for retailers. Australia Post is urging people to finalise their shopping much earlier to enable presents to be delivered on time. The cut-off date for Australian delivery is December 12 (December 19 for Express Post). If you were wanting to send presents to friends and family in US, Canada, UK or Europe, you’ve already missed the deadline (November 16). For Asia you have until November 23 and New Zealand until November 27. Australia Post wants consumers to get their shopping skates on.

Four, previously there has been a growing trend in giving the gift of an experience — dining, classes, hobbies and attractions. Given the changing landscape around the country and the globe with lockdowns and social distancing, we may see consumers shift away from giving experience gifts to giving products that can be guaranteed to be enjoyed as soon as they are given, especially in such a dynamic environment.

And finally, consumers are increasingly recognising the important role local stores play in their communities. Support for small, local and independent stores is at an-all time high, even as online shopping is growing. This is because consumers are supporting small stores either by shopping in the physical store or via their online shops.

Local stores have really improved their online offerings in an attempt to future-proof their businesses against future lockdowns. Pleasingly in Hobart, I’ve seen a number of well-known and established stores finally take the leap into the online world. It’s been a long-time coming for some, but I think they will reap the rewards as consumers demand choice on the shopping channels they want to use. Sometimes they want that enjoyable, and social experiential shopping experience that only bricks and mortar stores can offer, other times they want the convenience of shopping online.

Retailers now must offer consumers that choice. And they mustn’t forget that the online shopping experience for consumers now extends to the way parcels are handled, wrapped, packed up and delivered to the final destination.

The online shopping experience doesn’t end with the processing of the credit card — every element of the product’s journey is part of that experience. Similarly customer service in stores is more important than ever as shoppers make key decisions about choosing between online and bricks and mortar. All of this matters now.

There is no doubt this year is unknown in so many ways and we will all be learning as we go through it. Be kind to retail workers this Christmas. Just like you, they have had an uncertain and unsettling year.

Happy Christmas shopping. Shop early, and when you can, shop local.

Dr Louise Grimmer is a retail expert from the University of Tasmania and co-host of the retail podcast Shopology.