Peak Holiday 2020 ReporteCommerce Trends, Consumer Behavior & The Factors Driving a Very Different Shopping Season

2Peak Holiday 2020 Report

Executive Summary and Key Findings

The world entered unchartered territory in 2020 with the onset of a global health crisis. With the pandemic looming over everything, from the economy and supply chains to changing consumer patterns and even a contentious presidential election, the dynamics of holiday shopping were bound to be impacted.

Covid-19 accelerated digital commerce growth globally. Bloomreach’s The State of Commerce Experience study, conducted in March and April, 2020, found that 42% of consumers were shopping for products they’ve never bought online before while 63% were purchasing more than usual, with necessities topping the list.

Just as eCommerce boomed throughout the year, holiday shopping spend in North America (NA) from October 1 to November 30 grew 40% YoY. To understand the major holiday commerce trends and shifts, Bloomreach analyzed visits to eCommerce sites of its 500+ customer base and the most popular searches globally.

This report reveals our key findings along with some tips for how companies can optimize their digital commerce experiences for ultimate success during the biggest promotional and revenue-generating period of the retail calendar.

Spoiler alert: your commerce experience matters...a lot. And the companies that are focusing on enhancing that experience for customers today are no doubt emerging victorious, ensuring future growth and longevity.

Before we crunch those numbers and deep dive into our analysis, let’s take a look at the core findings and overarching trends.

• Overall growth: NA online revenue for the holiday season grew +40% YoY vs. +23% YoY in 2019, representing extraordinary growth in a year unlike any other.

• The holiday retail calendar reshaped: Seasonal search terms made an appearance as far back as September while pandemic-induced concerns resulted in consumers shopping earlier and spending was spread out over a longer period of time compared to previous years.

• Smartphone usage soared: Mobile spending in NA rose 45% YoY, representing growth for the fourth consecutive year, and now accounts for 52% of purchases (vs. 48% on desktop).

• Traffic acquisition trends: Direct site is the main driver of mobile and desktop holiday commerce traffic, followed by search engine traffic.

• A record-breaking year for Bloomreach: Cyber Monday concluded the highest volume week of the year and an all-time record peak of 3,945 queries per second.

Key Findings

1 https://www.bloomreach.com/en/resources/whitepapers/state-of-commerce-experience-study.html

3Peak Holiday 2020 Report

Growth Trends 2020

Cumulative holiday season growth trends point towards a record-breaking year for eCommerce. Overall, traffic in NA was up 61% YoY while overall revenue grew 40% YoY. To highlight this further, Cyber Monday, traditionally the biggest revenue-generating date in the retail calendar, became the biggest online shopping day in US history in 2020.

In the UK+EMEA region, YoY traffic growth was up 36% while YoY revenue grew 9%. Widespread lockdown restrictions, uncertainty over Brexit and lower consumer sentiment overall is likely to be reflected here.

The holiday retail calendar was certainly quite unusual this year. Amazon, anticipating the importance of holiday shopping, rescheduled Prime Day to take place on October 13 and 14, perhaps an early indication that consumers were going to shop differently.

In fact, seasonal search terms began making a return in 2020 as early as September and October. Bloomreach’s Commerce Pulse Data for September 2020 showed that searches for ‘Christmas’ appeared in the top 20 of search terms in September, one month earlier than in 2019; while

Pandemic Economy Drives a Record-Breaking Year for HolidayDigital Commerce

Christmas Shopping Started Earlier and is Spread Out Over aLonger Period

Year/Year Traffic and Revenue Growth in NA Year/Year Traffic and Revenue Growth in EU+UK

Traffic TrafficRevenue Revenue

0%

0%

5%

-5%

10%

10%20%

15%30%

25%40%

20%

50%30%

60%

35%

40%

2018 2019 2020 2018 2019 2020

9%6%

18%

9%20% 23%

40%

-4%

41%36%

15%

61%

related terms such as stockings and ornaments are also entering the list of top searches over the same period. In October, Christmas search terms were up dramatically by 56% and ‘Christmas’ was the top search term in October, beating out Halloween.

Amid concerns over out-of-stock items and shipping and delivery delays, and due to retailers offering promotions earlier than ever, consumers planned and jumpstarted holiday shopping ahead of time.

4Peak Holiday 2020 Report

This might explain why YoY growth trends over Cyber 5, traditionally the biggest shopping days, were slightly more muted than in years past. With the exception of Small Business Saturday (November 28), where YoY revenue grew 45%, sales and traffic growth over the other days fell short of industry projections. Like most of 2020, the pandemic impacted consumer spending on those key peak holiday shopping days. The figures demonstrate that consumers planned their shopping earlier, were likely to

Cyber 5 Year/Year Growth Trend

Thanksgiving Black Friday Small Biz Saturday Super Sunday Cyber Monday

25%

0%

50%

75%

46%

67%75%

67%66%

16%

5%

45%

22% 27%

Traffic Y/Y Revenue Y/Y

When is the most popular time to shop for deals? Data on Black Friday and Cyber Monday illustrates that consumers are holiday shopping night owls, with percentages of traffic, conversion and revenue highest between the hours of 8pm and 12 am.

Popular Shopping Times: The Golden Hours of Retail Peak at Night

Most popular shopping time in North America:

Traffic

22%8pm - 12am

23% 24%RevenueConversions

have been “shopped out” by the end of November or they may also simply reflect a waning mystique for Cyber 5 among consumers.

Nonetheless, a 22% YoY revenue bump for Black Friday and a 16% YoY revenue increase for Cyber Monday across NA are higher than last year’s sales, establishing a new record for online sales and setting the bar for quality digital commerce experiences even higher.

5Peak Holiday 2020 Report

Popular Holiday Search Terms and Purchases

Top 10 Search Terms 2019 Top 10 Search Terms 2020

1. Christmas

2. Toilet Paper

3. Pajamas

4. Paper Towels

5. Joggers

1. Christmas

2. Socks

3. TV

4. Leggings

5. Dresses

6. Pajamas

7. Harry Potter

8. Black Friday 2019

9. Sweater

10. Gucci

6. Masks

7. Black Friday 2020

8. Socks

9. Playstation 5

10. Leggings

A comparative analysis of the most popular search terms between 2019 and 2020 highlights an absence of luxury-branded gifts like Gucci, the demand for new entertainment products (Harry Potter was so last year) and the rising tide of pandemic essentials. Like toilet paper.

Practical Gifting Abounds as Consumers Brace Themselves for a Cozy Christmas

Similar to what we saw earlier in the year, the pandemic has had a ripple effect across many categories. This year’s top categories and holiday purchases provide a snapshot of consumer sentiment around the pandemic, and also how they foresee the near future. Let’s take a look at some examples.

Winning Product Categories and Top Money Makers

HomeTraffic

110%Revenue

57%

Traffic

57%Revenue

35%Apparel

1. Loungewear trending upwards

Comfortable clothing and loungewear dominate the apparel category. As consumers face lockdown restrictions and shelter-in-place mandates across the world, trending queries included items like joggers, sweatpants, leggings and hoodies (a trend already reflected earlier in the year as people adjusted to working from home) and warm and practical clothing such as pajamas, slippers and socks.

2. Pandemic shopping

With the pandemic looming over the festive season, Covid-essential items unsurprisingly feature as the most popular search terms, with masks, toilet paper and disinfecting wipes making the cut.

Traffic

37%Revenue

70%Grocery

Year/Year Growth

6Peak Holiday 2020 Report

3. A spotlight on homeware

As Covid-19 limits in-home entertainment for larger groups, consumers are still finding ways to spruce up their home environment and entertain themselves. With 110% YoY traffic growth and 57% YoY revenue growth, homeware soared during holiday 2020.

4. Consumers are ready to game!

If you were lucky enough to snag a Playstation 5, count yourself lucky. Demand for the globally sold gaming console spiked, with the item becoming one of the most popular search terms over Cyber 5.

5. Grocery

In 2020, WoW sales were up +14% and +12% in the two weeks (Nov 8-14 and Nov 15-21) prior to Thanksgiving and Black Friday week (Nov 22-28). In 2019, the increase in sales was just +13% and +1% WoW in the two weeks (Nov 10-16 and Nov 17- 23) prior to Thanksgiving and Black Friday week (24-30 Nov). Sales were up by 125% for this 2-week period YoY (Nov 8-14 and Nov 15-21 in 2020 vs. Nov 10-16 and Nov 17- 23 in 2019).

The patterns indicate that more shoppers planned and shopped for the holiday online, and did so a few days in advance when compared to last year, when stores were the default option.

Top Categories Browsed 2020

Apparel | Pajamas

Homeware

Holiday Gifts

Christmas Decor

Christmas

Card & Stationery

Black Friday

Apparel | Pajamas

Christmas Decor

Holiday Gifts

Computers & Gaming

Homeware

Toys & Games

Cyber Monday

Top Products Sold 2020

Sweater

Pajamas

TV

Leggings

Laptop

Vacuum Cleaner

Kitchen Stand Mixer

Mask

Watch

Wireless Earbuds & Charging Pads

Black Friday

Jogger

Sweater

Laptop

Pajamas

TV

Chair

Gift Card

Digital Camera

Sofa

Arcade Games

Cyber Monday

In November 2020, ‘Turkey’ made its debut appearance in the top search terms!

7Peak Holiday 2020 Report

% Shoppers making purchases by device in NA

Mobile and Traffic Spend YoY Growth (NA)

Mobile and Traffic Spend YoY Growth (UK+EU)

Desktop and Traffic Spend YoY Growth (NA)

Desktop and Traffic Spend YoY Growth (UK+EU)

Mobile Traffic Mobile Spend

2018 20% 34%

2019 19% 28%

2020 55% 45%

Mobile Traffic Mobile Spend

2018 -1% 12%

2019 37% 15%

2020 39% 3%

Desktop Traffic Desktop Spend

2018 -5% 12%

2019 8% 23%

2020 77% 34%

Desktop Traffic Desktop Spend

2018 -15% -9%

2019 46% 23%

2020 35% 18%

% Shoppers making purchases by device in UK+EU

Device Trends 2020

The past couple of years have witnessed the growth in mobile commerce and this year is no exception. An increasing number of NA shoppers are purchasing on smartphones, with mobile shopping now accounting for over half of purchases made over the holiday shopping period. That figure is even higher in the UK and EU with 64% of consumers using mobile to purchase products. While the holiday trend data illustrates that mobile maturity has characterized the UK+EMEA market for the past three years and is relatively unchanged YoY, a steady growth in mobile shopping is seen across the Atlantic.

The Weather Outside is Frightful but Mobile Shopping is So Delightful

66% 63% 56% 48%

34% 37% 44% 52%

25%

2017 2018 2019 20200%

50%

75%

100%

25%

0%

50%

75%

100%

39% 34% 35% 36%

61% 66% 65% 64%

25%

2017 2018 2019 2020

50%

75%

100%

% Mobile % Desktop % Mobile % Desktop

8Peak Holiday 2020 Report

6%

Traffic Acquisition 2020

Mobile Traffic Acquisition by Channel (NA) Desktop Traffic Acquisition by Channel (NA)

80% 79.7%

12% 13.9%

5% 3% 0.4%

Direct Traffic Search Engine Traffic Direct Traffic Search Engine Traffic

Advertising Search Traffic Social Media Search Advertising Search Traffic Social Media Search

% %

Across channels, direct website is the leading channel for both mobile and desktop share of traffic acquisition, followed by search engine traffic. In short, your website experience is paramount. With consumers having, on average, 160 touchpoints with retailers when they search for a product online (Google), improving product discoverability with advanced search and merchandising capabilities has never been more essential to commerce success.

Meanwhile, social media traffic has grown tremendously (77% YoY). This comes after Facebook launched more social commerce tools like Checkout on Instagram and Shops ahead of the holiday season, a sign of the channel’s continued importance in the future of the commerce landscape.

Social Commerce is on the Rise and Your Website Experience is Table Stakes

Mobile Desktop

Direct Site Traffic Direct Site Traffic

Search Engine Traffic Search Engine Traffic

Paid Search Traffic Paid Search Traffic

Social Media Traffic Social Media Traffic

2018 20182019 20192020 2020

20% 18% 69% 1% 12% 98%

21% 7% 14% -5% -2% 21%

29% 17% 10% -22% 11% 34%

74% 78% 77% -2% 17% 52%

Mobile Traffic (NA) Desktop Traffic (NA)

9Peak Holiday 2020 Report

Mobile Desktop

Direct Site Traffic Direct Site Traffic

Search Engine Traffic Search Engine Traffic

Paid Search Traffic Paid Search Traffic

Social Media Traffic Social Media Traffic

2018 20182019 20192020 2020

1% 29% 44% -6% 59% 34%

-5% 50% 31% -20% 32% 29%

15% 65% -11% -18% 32% 23%

76% -10% 80% -33% -2% 33%

Mobile Traffic (UK+ EU) Desktop Traffic (UK+ EU)

Mobile Traffic Acquisition by Channel (UK+ EU) Desktop Traffic Acquisition by Channel (UK+ EU)

84.2% 80.3%

12.2% 14.9%

2.9% 4.7%0.7% 0.1%

Direct Traffic Search Engine TrafficDirect Traffic Search Engine Traffic

Advertising Search Traffic Social Media SearchAdvertising Search Traffic Social Media Search

%%

10Peak Holiday 2020 Report

Your Merchandising Checklist: A Guide to Creating Better Commerce Experiences

This year’s trends show the remarkable transformation of holiday shopping and this new normal is likely to continue as consumer behaviors and digital commerce evolves. What best practices do you need to deliver for your customers? Bloomreach shares the answers...

Enhance your mobile and social commerce experienceTrend data shows the steady growth of mobile shopping and social commerce across the globe. With more consumers spending time online, mobile and social is playing a larger role in converting customers at every stage of the funnel. Consider creating a mobile app experience for your store or utilizing social commerce tools to optimize your customer experience.

Optimize shipping and fulfillment optionsOne thing the pandemic has proven is that omnichannel retail is here for the foreseeable future. An increasing number of consumers are opting for buy online, pickup in-store (BOPIS) and curbside pickup - 51% of shoppers say in-store pick-up is an important feature when deciding where to shop. Use “Pick Up Today” filters to help customers find locally available items, and ensure BOPIS information is pervasive across your site - from your homepage to product detail pages.

Leverage trending terms Put your customer data to good use. Optimize top holiday search terms and category pages by analyzing 2019 data, as well as keeping an eye on 2020 trending terms.

Focus on product discoverabilityDon’t forget the basics - product discoverability is key! Over 85% of consumers say accurate search results and an easy-to-navigate website are critical website capabilities for any retailer’s site (The State of Commerce Experience study). Nail these commerce must-haves for ultimate success.

Remember that commerce experience winsAlmost 80% of customers abandon their purchases due to difficult online experiences. Improving those experiences, and creating unique and innovative ways to personalize them, will convert more customers. Investing in digital commerce priorities today ensures competitive differentiation now and in the future.

Cyber Week is complete and the results speak for themselves: even in the midst of a global pandemic, holiday digital commerce sales continue to grow. But the season isn’t over yet and we’re here to support our merchants for the remainder of the holiday and beyond. For holiday tips and tactics, check out our Monthly Commerce Pulse Reports, bringing you the latest in eCommerce trends and industry knowledge to help you win the game in commerce experience.

How Bloomreach can help

11Peak Holiday 2020 Report

Customers who use our software:

About Bloomreach

Methodology

Bloomreach is the leader in commerce experience™. It’s flagship product, brX, is the only digital experience platform built specifically for brands, retailers and B2B companies who want to grow their revenue online while delivering each of their customers a premium, personalized commerce experience. brX combines content management capabilities with market-leading commerce-specific, AI-driven search, merchandising and personalization in one flexible, API-first next generation platform.

Bloomreach serves over 500 global brands including Albertsons, Staples, Bosch, Puma, FC Bayern München and Marks & Spencer. Bloomreach has a global ecozystem of certified partners and market-leading commerce platforms, including Accenture Interactive, BORN, commercetools, EPAM, IBM iX, Salesforce, SAP, valtech, and Wunderman Thompson Commerce.

For more information, visit Bloomreach.com, follow us on Twitter @Bloomreach_tm and on LinkedIn.

Bloomreach powers over 25% of all UK and US eCommerce and services, representing over $200bn in annual sales. The report is supported with aggregated and anonymized data based on Bloomreach’s customer base of over 500+ global brands and enterprise businesses. The timeframe for the holiday period is between October 1 and November 30, 2020. For the purposes of this analysis, Cyber 5 refers to the days between Thursday, November 26 and Monday, November 30, 2020. Geographies include North America (US and Canada) and UK+EMEA.