Consumer Shopping Trends for the 2021 Holiday Season

Consumer Shopping Trends for the 2021 Holiday Season

Amazon Google Social media

What does the holiday shopping season hold for businesses? We have already heard plenty about the potential problems that a global supply chain crisis will pose. They include product shipping delays, bare shelves, and higher prices. But how are consumers planning to research and buy as the shopping season kicks into full gear? A recently conducted webinar by ChannelAdvisor, “Navigating Online Consumer Behavior: 2021 E-Commerce Trends and Forecasts,” provided some answers.

ChannelAdvisor and Dynata surveyed 5,000 global consumers to learn how they are shopping this holiday season, including 1,000 U.S. consumers. ChannelAdvisor also relied on secondary research from sources such as eMarketer. Here are some major takeaways:

E-Commerce Is Exploding

eMarketer data

 

Chart showing people shopping more

E-commerce has accelerated by two-to-three years as a percentage of total retail sales. ChannelAdvisor says that the accelerated pace will continue for the next few years. That’s because Covid-19 forced more shoppers online. Nearly 60 percent of consumers are shopping online more frequently than before the pandemic, and 32 percent of U.S. consumers have more confidence shopping online than they did before the pandemic. A whopping 58 percent of consumers are spending more time on Amazon.

Key takeaway: businesses should expect the major ad platforms such as Amazon, Facebook, Google, Instagram, Snapchat, and TikTok to integrate advertising and commerce more aggressively. We recently saw Google make it easier for shoppers to find products through visual search and display. TikTok continues to launch new shopping features. It’s important that businesses capitalize on these opportunities to capture revenue in these moments when people are searching and browsing on digital.

Get Ready for a Strong Holiday Shopping Season

A chart showing people shopping online

Holiday shopping is increasing in 2021

More than half of U.S. consumers will shop online more than before the pandemic. By contrast, 38 percent of U.S. consumers said they’d shop more online when they were surveyed in May 2020. And 37 percent of U.S. consumers expect to do more holiday shopping online compared to 2020. Only 6 percent of shoppers will shop less.

This finding is not surprising. We saw that even during the hardest days of the pandemic when the world faced economic uncertainty, consumers were willing to open up their pocketbooks and spend. But as ChannelAdvisor noted, much of that spending happened online.

Key takeaway: it’s going to be a busy holiday shopping season, and savvy advertisers are already ramping up their holiday shopping advertising. According to Deloitte, consumers will spend 9 percent more this holiday season compared to 2020. A new survey from JLL says that consumers plan to spend an average of $870 per person on holiday expenses this year, a 25.4 percent increase from last year. Consumers are ready to shop. On the downside, if the global shipping crisis is as bad as economists say it’s going to be, those consumers may experience the disappointment of product shortages. So advertisers are encouraging people to shop sooner while inventory is in stock.

Amazon and Google Dominate Product Research and Purchase

 

Research online

Purchase online

Amazon is the Number One destination for people to research product: 41 percent use Amazon to research products. Google, though, is a strong second place finisher. Amazon has built strong trust because when people are checking reviews, prices, and product inventory, Amazon gives them one easy place to do all that. During the holiday shopping season, even more consumers will do research on Amazon, and  65 percent will purchase on Amazon.

Key takeaway: capitalizing on Amazon Advertising products is a must if you want your brand to be visible when shoppers are doing deep product research. But don’t shift your ad budget from Google if you’re already a Google Ads customer. A two-pronged approach works best.

Social Media Is More Important for Younger Audiences

 

chart showing Instagram usage

People buying on social

Social is the key research channel for younger audiences. 53 percent of 18-to-25 year olds have researched products on Instagram. 51 percent have discovered products they purchased on social media sites. Facebook remains a strong source of product research for 26-to-35 year olds. Meanwhile, 30 percent of 26-to-45 year olds will do the majority of their holiday purchasing on social sites.

Key takeaway: although social media sites lag far behind Amazon and Google for product research, they index high for Millennial and Gen Z shoppers. Given the popularity of Instagram as a shopping destination, it’s important that advertisers capitalize on Instagram ad products such as Instagram Shop to reach younger shoppers. Essentially, Instagram ad products make it possible for businesses to turn posts and stories into ads. Instagram also makes it possible to create ads across Instagram and Facebook, which sounds very efficient – but remember that what works on Instagram might not be as effective on Facebook because Facebook appeals to a slightly older audience.

For more insight into holiday shopping trends, read a recently published True Interactive post, “How Retailers Can Prepare for the Holiday Shopping Season.”

Contact True Interactive

To maximize the value of your holiday shopping ad campaigns, contact True Interactive. We help our clients create effective online advertising all year-round, including the holiday season, and we understand the nuances of creating effective holiday ad campaigns.

Photo by Jakob Owens on Unsplash

Facebook Reels: What Brands Need to Know

Facebook Reels: What Brands Need to Know

Facebook

One year after Instagram announced the debut of short-form video feature Instagram Reels, parent company Facebook is joining the party. Reels first debuted on Instagram in 2020 in a clear bid to compete with TikTok. Facebook, having recently announced its plans to test Facebook Reels in the United States, is now figuring out ways to make Reels a more popular feature on Facebook itself (the U.S. initiative is an expansion of testing already launched in Mexico, Canada, and India). As part of the test, Instagram users can cross-post their reels to Facebook.

What do these developments mean for your brand? Read on to learn more.

What Is the Reels Feature?

When Reels rolled out on Instagram in 2020, the video time cap was 15 seconds, but the feature has since grown, and grown again: videos can now be up to one minute long. Using Facebook Reels, people can watch others’ videos, as well as create/share their own reels from the Facebook app. The feature’s reason for being? To allow people to “express themselves, discover entertaining content, and to help creators broaden their reach.” According to Facebook, almost half of time spent on the app is devoted to watching videos. Pair this data with the statement that Reels is growing “especially quickly,” and the test run of Facebook Reels makes a tremendous amount of sense. As CEO Mark Zuckerberg told investors, “We’re very focused on making it easy for anyone to create video, and then for those videos to be viewed across all of our different services, starting with Facebook and Instagram first.”

As Zuckerberg implies, emphasis is on creativity and its possibilities. Facebook Reels users have access to creation tools much like those already available on Instagram: video capture, for example, as well as camera roll import, timed text, and music selection. Editing tools allow people to speed up or slow down their video, and to incorporate augmented reality effects from Facebook or third-party developers. And after creating a reel, users can decide how to share it: with select friends, or the default share, which is the general public. As is the case throughout Facebook, Reels will be recommended to people based on their interests, who they engage with, and what’s trending as popular.

Why This News Matters

Facebook’s efforts speak to deeper trends and resonances. For one thing, the news demonstrates the tremendous sway TikTok holds in the social world. TikTok enjoys approximately one billion monthly active users. Sixty percent of TikTok users hail from Gen Z, soon to become the largest generation. Furthermore, TikTok users of all ages have proven themselves to be ardent fans, spending an average of 52 minutes per day in the platform and opening the app roughly 8 times per day. Eighty-three percent of TikTok users have posted a video. Facebook understands and respects these stats, and is responding accordingly.

The news also underlines the growing importance of video. As noted above, video accounts for  a major chunk of time spent on Facebook. And on Facebook’s latest earnings call, Zuckerberg pointed to Reels as “the largest contributor to engagement growth on Instagram.” In short, videos are hot.

Reels represent a possible advertising opportunity. While Facebook told TechCrunch that Reels on Facebook don’t currently include ads, the plan is “to roll out ads in the future.” Instagram, which has already begun to monetize Reels through ads, is showing what that might look like for Facebook down the road.

Finally, Facebook’s actions underscore the growing influence of individual creators. Consider the fact that in July, the social networking behemoth announced a plan to invest more than $1 billion in creators across both Facebook and Instagram through 2022. The platform’s willingness to shell out that kind of cash speaks to a fundamental belief in influencers’ power.

What Brands Should Do

What do these developments mean for brands? We recommend that you:

  • Embrace video, especially short-form video. Facebook is certainly demonstrating its commitment to the form. And as we blogged earlier this year, apps such as YouTube are launching short-form video options such as YouTube Shorts.
  • Look for advertising opportunities. Reels may not include ads on Facebook yet, but as noted above, the landscape is constantly evolving. What opportunities for advertising on video features exist today?
  • Understand that influencers hold a lot of sway. Consider how you might partner with individual creators to do influencer outreach for your brand.

Contact True Interactive

Pondering the role video might play in your brand’s strategic plan? Contact us. We can advise.