Christmas 2020: Opportunities to close the year on a positive note

A research based approach

2020 has been a challenging year. Due to Covid-19, all around the globe, people have had to go into lockdown, working or learning remotely, while many businesses suspended their activities, with a severe economic impact causing an ongoing global economic turmoil ¹.

In a short period, everyone has had to adapt to social distancing and to prevention strategies, with relevant psycho-social effects, behavioural challenges and implications in consumption. This resulted in an acceleration of a few trends, with a switch to online shopping and to delivery ², proximity and local commerce gaining strength ³ and brick and mortar shopping trips being more functional, with a partial loss of spontaneity ⁴.

Nonetheless, consumers continue shopping: in some cases, they are spending more when compared to pre-pandemic levels (groceries, household supplies, personal care services, IT and technologies, home-entertainment) and few market sectors experienced a boom: music and video streaming, online gaming, telehealth, electric bicycles and scooters. Regardless, some industries were particularly hard-hit: travel and transport, gasoline, apparel, wellness and pet-care ^5-6.

So, it is relevant to underline that:

• Discretionary categories lost strength: 1 in 5 European consumers have stopped all non-essential expenditure and 2 in 5 are now more selective in all their purchases ⁷.
• Consumers have changed their mindset: the lockdown and the new habits at home triggered a frugal mentality where “less is more” ⁸.
• Compensation and restrictions are two parallel phenomena: people have saved and now treat themselves to small rewards, but are also conservative, with shopping lists more detailed than ever.

Zooming-in Shopping Centres, we observe how people are visiting with less frequency, trying to accumulate their shopping all at once. Therefore, traffic and sales have decreased while sales per visit increased.⁹

Shopping Centres drivers’ range has been narrowed: groceries and fashion are the main motives to visit, while cinema, window shopping and eating out are activities done with less frequency. They are perceived as a place where everything can be found, facilitating functional trips, but the enclosed space and the crowds can affect the experience ¹⁰: European consumers are willing to return to stores (35% to grocery and 36% to non-grocery), but only if their concerns over personal safety are alleviated ⁷.

Though Covid-19 can alter holiday traditions, Christmas is going to be unlike any other, with an even greater significance: people are looking forward to spending time with their loved ones, enjoying decorations and the festive atmosphere, giving and receiving gifts, and making the most of celebrating at home ¹², to end the “horribilis annum” ¹¹.

• To combat the negative emotions, people are entering festivities extra early, planning to start their shopping sooner (Holiday-related Pinterest searches jumped 77% YoY in April ¹¹ ; 70% of Italians intend to plan their purchases in advance to avoid crowds ¹³; 35% Portuguese will start their Christmas shopping earlier than usual ¹⁰).
• Christmas is going to be thoughtful, about what it is truly important: people want brands to be informative and in touch with reality.
• Consumers will continue oscillating between indulgence and altruism, swinging between an amplified ‘lipstick effect’ and an altruistic attitude.
• The stay-at-home nature of the current crisis presents great opportunities: cooking related appliances, products suited to working from home, entertainment, health and wellness products. But also, premium goods for those not directly affected by the crisis. ¹⁴
• E-commerce boom will continue into Christmas, as some consumers will move to this channel to avoid crowded shops and queues. But Shopping Centres are still a relevant format for people (86% Portuguese are considering them for their Christmas Shopping ¹⁰; 76% Italians want to go back to this format ¹⁵).

In this context, brick and mortar shopping must connect with people’s mindset being aligned with their need for positivity, focusing on reality, values and what is truly important. The unique, complete and thrilling shopping experience is the main differentiation to compete with e-commerce, but it must be perfect from A to Z. Innovation and digitalization have a significant role, either to make the visit as contactless as possible with a prioritization of the wellbeing of customers (respecting social distancing, hygiene measurements, transaction-less payments, ..), but also using online tools to enhance the physical visit (home delivery, click and collect, engagements, ..). Promotions, personalized offers and loyalty programs can be a competitive strategy in the short term but need to be supported by creative communication.

Conscious of this scenario, Sonae Sierra has developed a range of actions that aim to support tenants businesses ranging from  working on omnichannel and online-offline synergies, to offer visitors clear information, relevant online services and simultaneously conveying engaging communication to boost the in-store shopping experience. So, you will find a set of initiatives crucial to a rewarding and meaningful shopping experience: earlier Christmas campaigns, digital Christmas calendar, digital Santa Claus photo, premium concierge service, online stylist advisor, drive in service, food court order & collect service, traffic and lines management. With this support, Sierra’s shopping centres are prepared to deliver COVID-19-safe, festive and enjoyable experiences to their visitors in this holyday season.

Sierra is confident Christmas poses an opportunity for shopping centres and research was a key tool to support our decision-making process and allowing us to adapt and discover new paths: knowledge is crucial to understand a volatile context. So, “If there is hope in the future, there is literally power in the present.” Zig Ziglar

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1. Fitch Solutions, 2020
2. UBS research, July 2020
3. Sonae Sierra Consumer Research 2020
4. Mintel, July 2020
5. McKinsey Company, 2020
6. Oxford Economics, 2020
7. Consumers and the new reality, KPMG International, August 2020
8. The Consumer Intelligence Lab, October 2020
9. Sonae Sierra Global Report
10. Sonae Sierra Consumer Research 2020
11. Stylus, September 2020
12. Deloitte, October 2020
13. IPSOS, June 2020
14. GfK, October 2020
15. Blogmeter, October 2020