And just like that, another year has passed, leaving us right at the cusp of yet another holiday season. And as the holidays grow closer, it only becomes more important for retail and eCommerce brands to understand how customer behaviors carried over from 2020 will continue to shape and shift trends related to shopping.

While we've seen a growing number of retailers re-opening their brick and mortar locations, research shows that more than 47% of customers still plan to shop online. In fact, the pandemic has upended retail's traditional notions around holiday doorbusters, with some Big Box brands closing their in-store efforts on Black Friday and Thanksgiving to give priority to online operations.

To better understand this complex, fast-changing landscape, let’s take a look at additional trends we are anticipating this holiday season, as well as key strategies that retail and eCommerce brands can leverage to ensure profitability, customer satisfaction, and ongoing loyalty as the holidays get underway.

Trend #1: Anticipated Delays Lead to Earlier Shopping Season and Opportunity for Customer Acquisition

Like in 2020, brands are facing inventory shortages, as well as longer, logistical delays, while customers are preparing to start their holiday shopping as early as the first week of October. For that reason, it’s important to focus on first-time customers during this time of year, as seen by these 2020 acquisition insights from Braze customers:

• Daily New User volume picks up in early November, and peaks around Black Friday (+60% vs pre-holiday* period)

• Daily First Time Buyer volume picks up in mid-November, and increases by 120%, compared to pre-holiday daily first-time buyer volume

• Anonymous users (i.e. users who are unknown to the brand they’re engaging with, or who cannot currently be engaged with through messaging channels) account for 86% of retailers’ total user base. Additionally, 92% of those users first interact with a brand via the web and are 58% more likely to purchase from a brand, compared to known users, providing the fastest path to growth.

The takeaway? Be prepared to engage with new customers in order to help set expectations regarding delays as they are acquired; that way, you can ensure a good first impression of your brand and a seamless customer experience. Additionally, don’t forget to implement web-focused customer engagement strategies to encourage anonymous users to become known users by declaring their identities and preferences.

Trend #2: The Roles of Stores and Digital Are Merging—and Even Reversing!

Today’s shoppers plan to spend most of their time shopping online, but 43% are increasingly more open to in-store experiences as well. What brands need to know:

• BOPIS (Buy Online, Pickup In-Store) is back: Retailers should embrace this approach since it allows consumers to take advantage of the ease associated with online browsing and purchasing, while still allows the brand to leverage in-store experiences for both fulfillment and upselling. Additionally, this approach presents a great opportunity for retailers to collect first-party data on their customers to better support future digital engagement.

• Social channels also drive discoverability: Personalized inspiration and curated recommendations via social are even more important in today’s landscape, with social commerce representing 11% of global retail eCommerce revenue in 2020. However, without first-party data to fuel effective ad targeting, retailers could see a drop of as much as 60% in website sales.

The takeaway? Retailers should take a cross-channel approach to their engagement efforts in order to reach today’s hybrid (i.e. in-store/online) shoppers and emphasize the value they receive both in-store and online. Other impactful engagement tactics—from geofencing to responsive digital communications—should be leveraged to help drive customers to visit brick and mortar locations, when possible. Additionally, while social is a powerful platform for reaching consumers, brands should be careful not to rely on it too heavily, since doing so can decrease the amount of owned first-party data available to effectively personalize ads, given new platform privacy policies and cookie deprecation.

Trend #3: Time to Purchase Decreases Throughout Holiday

With the rise of more one-day deals and flash sales to get shoppers’ attention, driving 2+ purchases will be critical for brands in order to increase revenue and defend their market share from competitive categories and challengers. To increase your chances of making that happen, take a look at the trends we anticipate in the average repeat purchase cycle, based on 2020 Braze customer data:

• Average Time to First Purchase: Our research found that the average time to first purchase post-acquisition in the period surrounding the holidays is 3.29 days, but dips to 2 days around Black Friday. When comparing the average time to first purchase pre-holiday (September–October) versus post-holiday (January–February), this time increases by nearly 5%, from 3.47 to 3.63 days post-acquisition.

• Average Time to Second Purchase: Historically, this metric has not decreased as noticeably during and around peak holiday; however, the average time to second purchase is still always lower at this time (18.23 days during holiday vs. 19.41 days prior to November).

The takeaway? Since shoppers tend to be more promo-sensitive around this time period, driving second purchases is a bit more challenging. However, this should be a focus and KPI for retailers looking to drive both customer lifetime value (LTV) and revenue impact to their bottom lines.

Trend #4: Driving Value and Capturing Loyalty Early Is Key

Retail and eCommerce brands typically find that customers acquired during the holidays have lower retention rates than users acquired during other times of the year, likely due to the price consciousness and “promo-focused” mentality many people have when shopping for gifts. However, the good news is that unlike shoppers first acquired during the Back to School season, customers who connect with a brand early in the holiday season have a higher likelihood of retention when engagement strategies are employed effectively:

• Users acquired in October and November have the highest retention among holiday season users; in particular, November has the strongest average Month 1 (28.56%) and Month 6 (13.48%) retention rates.

• Users acquired in December see a 12.15% drop in Month 1 retention—and 15.2% drop in retention in Month 6—compared to customers acquired in November.

• Lowest retention rates are seen in customers acquired in January, with these users sporting retention rates of 24.56% in Month 1 and 10.87% in Month 6); however, that’s not surprising after the post holiday-shopping high.

The takeaway? Kick off acquisition strategies and effecting engagement earlier in the season to give runway for experimentation and optimization when it comes to building relationships with customers acquired in later months.

So What Should Retailers Do?

Before the holidays, brands should focus on acquisition by reaching out to prospective customers across both mobile and web. They also need to be prepared to address customer challenges and needs in order to provide a good customer experience and drive value early. This means understanding how communication of seasonal issues—such as inventory delays, transactional, and shipping updates—will be supported and incorporated into messaging strategies, specifically on channels such as SMS, push notifications, and Content Cards.

During the holidays, brands should employ tactics designed to drive both online and offline purchases, when applicable. Whether this means reimagining the “store” experience, or creating a better online experience, ensure the customer is at the center of everything you do. Tactics like BOPIS messaging, location-based segmentation, and geofencing are useful across mobile channels (especially in connection with shipping cutoff dates) to drive users to retail locations for continued purchasing.

The post-holiday period is all about re-engaging with customers to reduce user churn. Stay one step ahead by segmenting one-off purchasers to implement re-engagement campaigns or garner feedback designed to help improve retention rates. It’s also a time to focus on loyalty programs that can continue to add value and incentivize customers to build and deepen their ongoing relationships with the brand.

Next Steps

It’s never too early (or too late) to build and evolve your holiday strategy. As we head into the first shopping holiday, remember that customer engagement campaigns don’t exist in a vacuum. Coordinate with your social team to reach new and valuable users with valuable, relationship-building messages. Test, experiment, and optimize messaging, customer segments, and channels throughout the holiday and beyond. And remember to craft content that aligns with your business goals.

When you put together ads and other paid content, you’re probably taking steps to ensure that it’s designed to drive desired actions, habits, and outcomes among the target audience—and it’s just as important to do that work when it comes to the messages you send as part of your cross-channel customer engagement strategy. For more on how to do that, check out the Braze TRUST framework.

Braze Data and Methodology

Holiday Data Research

Braze pulled anonymized and aggregated data at the daily level from Braze customers in the retail and eCommerce space. These statistics span from September 2020 to February 2021. The predefined time periods for the comparative analyses are pre-holiday (9/1/20-10/31/20), during holiday (11/1/20-12/31/20), and post-holiday (1/1/21-2/28/21). The raw data has been cleaned using volume and company count checks so that no one brand or group of brands is over-represented.

Anonymous Users Research

In connection with our research into anonymous users, Braze looked at anonymized and aggregated data for 2.5 billion active users engaging with more than 100 Braze customers in the retail and eCommerce space. For the purposes of this research, we exclusively looked at data generated between November 2019 and February 2021.