Holiday Shopping in 2020

In the 2020 holiday season, consumers are exploring alternative holiday shopping methods including online shopping with curb-side pickup at a storefront.

The term “doorbuster deals” has been used to describe quite literally how consumers have reacted to major price reductions at retailers during the five-day Thanksgiving holiday weekend that includes Black Friday and Cyber Monday. However, in light of the COVID-19 pandemic and increasing virus-related restrictions across the U.S., many shoppers will be turning online for their holiday shopping this season.

According to predictions recently released by Adobe, 2020 online holiday shopping spending is forecasted to reach at least $189 billion, a 33% year over year growth. The University of Delaware’s Alfred Lerner College of Business and Economics marketing professors Jackie Silverman, Matthew McGranaghan and Andong Cheng provide tips on what to prepare for during this unique holiday shopping season.

Benefits of “safer shopping” this season

Silverman’s research examines several facets of judgment and decision making and consumer psychology. According to Silverman, there are many potential benefits of online shopping for consumers, including some unconventional approaches to gift giving this season.

“In-person shopping is down due to COVID-19, as it should be, and so companies and consumers alike are pivoting to online shopping and curbside pick-up,” Silverman said. “Besides being safer, this can actually be beneficial for gift buyers this season.

“First, it’s so much easier to compare prices across stores and find coupons online (versus in the moment in a store). Second, getting gifts to loved ones you won’t have the opportunity to see over the holidays is a lot easier if you buy online, as you can ship it directly to them. Third, browsing online allows you to see so many more options and be more methodical and thoughtful about gifts.”

Silverman also observed that gifting experiences (versus material items) has been increasing in recent years. However, experiences are a lot riskier right now – “we don’t know when we can travel, go to a spa or eat inside our favorite restaurants safely,” Silverman said. “Still, I think there are a lot of opportunities to gift meaningful experiences, and they might be appreciated even more given so many of us are stuck at home.”

Some examples of giftable experiences at home include virtual wine-tastings, monthly subscription boxes of international snacks, new art and supplies for home improvement projects that make day-to-day feel more luxurious and enjoyable. While these gifts are still material, they carry an experiential component that make them special.

“Given how stressful 2020 has been, I think a lot of consumers are thinking about what their values are, and supporting companies that do good or are local is probably high on that list,” she continued. “Consumers should consider participating in Giving Tuesday. Conscientious consumers can appreciate the gift of a donation in their name to a cause they value. Or, gift-givers can look to companies that do good through their products.

For example, Bombas socks and Toms shoes both donate a product to someone in need for each one sold. “Pairing material items with donations or good deeds can give even more ‘warm fuzzies’ around the gift,” Silverman concluded.

Businesses emphasize online shopping options

McGranaghan studies the economics of consumer attention and the indirect effects of marketing interventions. He explains that there is a difference in how businesses are innovating and utilizing online retail methods to connect with consumers this holiday season.

“The short answer is that businesses are innovating – competency out of necessity,” McGranaghan said. “When the pandemic hit, restaurants were quick to cook-up new websites and switch to QR code menus. Retail stores followed suit, shifting consumers (and their dollars) towards websites, mobile apps and contactless curbside pick-up.”

As Black Friday approaches, businesses continue to transform as well as defy tradition. Many big box stores, including Walmart, Target, and Best Buy, that typically draw deal-seeking masses are spreading out deals over November to curb crowds. Additionally, many stores will be closed on Thanksgiving and the early morning hours of Black Friday. That said, according to McGranaghan, “nothing is stopping you from getting up at 1:00 a.m. on Black Friday and shop online if you feel the need to keep the tradition alive.”

“A significant shift we’ve seen this holiday season, better characterized as accelerated by COVID-19 than caused by COVID-19, is the shift to digital and mobile,” McGranaghan noted. “Amazon, Walmart and many others are expecting record sales, while FedEx and Amazon are hiring hundreds of thousands of seasonal workers to promptly get those gifts to your doorstep.”

The juggernauts of online retail are not the only ones growing. According to McGranaghan, Chewy, a digitally native seller of pet-related products, has seen stellar growth. Microsoft, a company with mixed success in physical retail, is doubling down on digital.

“It recently closed all but four retail stores and is heavily investing in the digital storefront,” McGranaghan said. “It plans to offer many new services including one-on-one video chat support, online tutorial videos and virtual workshops to help shoppers. I’m sure many will follow.”

In terms of strategy, one of the biggest challenges for businesses this holiday season is that the consumers’ online buying journey is more targeted.

“Online, shoppers can get to the exact product they want with only a few clicks,” McGranaghan said. “Offline, that same shopper would have to drive to the store, walk through many aisles and kiosks to get to that product, and then walk up to the checkout and drive home.”

Consider a Black Friday staple – TV doorbuster deals. These are too-good-to-be-true deals designed to attract a large number of shoppers into a business. It is difficult to instill a similar feeling in the online shopper, but online retailers are trying.

“Doorbuster deals operate on the basis that they will attract many potential buyers to the store,” McGranaghan said. “However, quantities are often intentionally limited such that there are not enough for everyone. If you are one of the less fortunate (or determined) and don’t get your desired doorbuster deal, instead of heading home empty-handed, maybe you buy a different TV.”

McGranaghan noted that Walmart is offering online-only flash doorbuster sales (available in limited quantities) on Thanksgiving and Black Friday. The key to business success this holiday is where the customers who don’t get these deals will go. Will they stay on this website or will they go somewhere else?

Regardless of what you’re shopping for this holiday season, McGranaghan warns shoppers to be wary of bad reviews and dishonest price discounts. You can use websites like to check reviews and seller reputation scores and to check price histories. You may be surprised by what you find.

Beware of promotional discounts

Research exploring promotional credit deals and how they can lead to fallacious thinking in consumers suggests that certain types of Black Friday discounts may cause consumers to spend more than they realize, according to a paper co-written by Cheng, whose research focuses on defining and identifying the picky consumer segment, and explores how pickiness impacts other judgments and decisions.

Cheng advises consumers to consider the phenomenon of double mental discounting, where shoppers experience a “mental accounting phenomenon” when offered promotional credit.

For example, Cheng said, “Let’s say you went to Ann Taylor Loft, you bought a sweater for $50 and received $10 of Loft credit to spend in the future. This purchase feels like it’s only $40 instead of $50. And then later, you spend the $10 credit on another shirt and feel like the shirt is free, because you’ve only been spending that merchandise credit instead of more money out of your pocket.”

In this scenario, even though you have only received $10 in rewards, you feel as though you have received $20. This also doesn’t account for the possibility that you won’t fully use that promotional credit. This is why, Cheng said, consumers should try to remember that gift cards “should be treated like cash” in terms of their mental value.

“For example, when you receive promotional credit, don’t think of the initial purchase as cheaper,” she said. “Only take that money gained into account once you’re actually able to use the promotional credit.” Keeping this in mind, she said, may help us to “not feel encouraged to buy things that otherwise may not feel as good of a deal.”

Giving Tuesday at UD

Following the holiday shopping frenzy, Giving Tuesday is a global day of charitable giving, fueled by the power of social media and collaboration. This year, the Lerner College is raising funds to support our Lerner Executive Mentoring Program and the Accounting & MIS Peer Tutoring Program. To support the Lerner College campaigns or one of the other UD Giving Tuesday projects, visit HenFunder.

Written by Dena Hillison and Sunny Rosen

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