Christmas 2021: How Your Business Will Be Impacted

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9.11.2021 Business tips

Christmas 2021: How Your Business Will Be Impacted

Here are 5 ways COVID-19 will impact the spending season.

As the dust settles on another tumultuous year for many Australians, the big question is: what will the silly season look like in these unprecedented times? 

The 2021 festive season will see a surge in Christmas spending, but not as you know it. After another year of forced closures, a distinct lack of travel, and extraordinary levels of online shopping, forecasting how Australian consumers will respond to their newfound purchasing freedom is a difficult task. 

That said, there are a number of things we can safely assume in the lead up to the busiest time of year for small businesses. For example, COVID-impacted supply chains will no doubt mean stock shortages and delivery delays — compelling consumers to shop sooner than usual to avoid disappointment.

To help you prepare your business for a retail season like no other, here are five ways COVID will impact Christmas in 2021, and what you can do to position your business for success in light of the current environment.

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1. There's been a shift in consumerism

Christmas this year has coincided with the opening of borders across Australia. This means there’s a real sense of celebration in the air as families come together again — likely for the first time in months, if not years.

Yet as retail giant Very discovered last month, when it dropped its annual Christmas ad 85 days early, consumers simply aren’t interested in being sold to this year. Instead, people want to see an acknowledgement of what they’re been through. As Damon Collins, founder of Joint creative agency, explained: “Help people through the tough times and they will love you when they come out the other side, instead of trying to make a load of money out of them, because they will remember you for that […] Stories about the human condition do better at Christmas as opposed to a brand flogging their stock.”

This year, consumers are looking to businesses and brands to help shape a Christmas the family will never forget. Instead of focusing on the hard sell, tweak your strategy to highlight the ease of your service; keep stocking stuffers for the whole family at the checkout, offer a two hour click and collect window, and make sure your returns and exchange policies are up to date and visible.  

All small business owners will need to remember and acknowledge this shift in consumer sentiment, ensuring their business’s marketing is geared towards emotional appeal. Businesses who can do this will create valuable brand impressions that will endure long after the holidays.

2. Shoppers are ready to spend

The easing of restrictions, particularly in Melbourne and Sydney, has given rise to a new phenomenon dubbed the ‘post-lockdown cash splash’ — and it’s led to a surge in spending, with $150 million spent per day since lockdown was lifted. 

Now is the perfect time for business owners to start thinking strategically about how they can leverage this retail enthusiasm. For example, place typical impulse purchases at your checkout area to cash in on the $5,400 consumers spend annually on last-minute buyers.

Clever at-counter items during the festive season are essentially stocking stuffers, just ripe for the picking. Impulse buying accounts for between 40 to 80% of purchases, so it pays to give some thought to your at-counter experience. Keep clutter off your counter with a sleek, cordless EFTPOS terminal and use the space to display your most popular last-minute grabs.

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3. The shop local trend

Australians are being urged to “shop local”, and have embraced the opportunity with gusto. 

Most people have seen firsthand how difficult the pandemic has been for small businesses. They’ve seen shuttered doors, seen the For Lease signs, and read honest, raw business announcements. But even as Australia reopens, capacity limits remain — and vaccination certificates must be shown in many places of business. Put simply, it remains difficult for many local businesses to get by — even during the biggest consumer spending season of the year.

In order to leverage this compassion for small business and make it easy for locals to shop with you, look for ways to increase your physical and digital visibility. Share your story on social media, invest in more impactful signage, amp up your marketing and make it known that you’re a locally owned and run business. Before you can carve out a slice of the “shop local” pie, shoppers need to know you’re a local business who could use the extra love this season. It’s important to get on locals’ radar.

4. Supply chain issues are rife

As soon as restrictions on non-essential shopping were lifted, consumers were told to make a start on their Christmas lists ASAP. With headlines warning shoppers to “start their holiday shopping now” (in early October) or “you’re already behind”, it’s little doubt that there’s a unique sense of urgency around the 2021 holiday season. 

Melbourne Mayor, Sally Capp, has even announced that Christmas will begin two weeks earlier this year — moving the launch of the annual festive festival to November 12. This comes as experts warn that worsening supply chain woes around the world could “ruin Christmas”, with lengthy delivery times for foreign-made goods.

It all sounds rather doom and gloom, but this is where flexibility will be crucial for small businesses.

Without the ability to stockpile sooner, small business owners will have to be clever in their approach to this year’s holiday shopping. Visibility over your cashflow will be crucial.  

With supply chain issues forecast to continue in the coming months, you won’t want to start your sales too early or else you run the risk of running out of inventory at the worst time — when people are ready and raring to spend. To mitigate low stock levels, explore effective substitutes that your staff can recommend in the event an item is sold out. 

Lastly, encourage shoppers to click and collect, or order and pay over the phone. That way, your customers avoid the lengthy Australia Post delays and can collect items at a time that suits them. Don’t forget to make this service known by adding it to your Google My Business profile and website, as well as sharing it on your social media profiles. It’s almost crunch time for shoppers; remove as many hurdles as possible and make it easy for them to get what they need from your business.

5. Your customers remain hesitant  

No matter where in Australia your business operates, Christmas will look different for most of your customers this year. While many interstate borders will be open, not everyone will be together at Christmas. There is still some hesitancy towards the festive season — attributable (at least in part) to mandated testing prior to travel, proof of vaccination prior to venue visits, and tales of low flight availability.

So, indeed, although many are looking forward to the festive season, people remain still cautious — something small businesses need to factor into their sales and marketing efforts in the lead up to Christmas.

Allaying these concerns can be as simple as making your business COVID-safe, to instil confidence in your shoppers. Make your QR codes obvious, train your staff in the appropriate attire and protocols, and ensure your hand sanitiser is always topped up.

Importantly, consider extending your hours earlier on in the season. While most businesses decide to leave their lights on for longer in the week before Christmas, doing it sooner this year may help alleviate concerns of catching the virus and seeing holiday plans go to ruin. It will also help you navigate capacity limits that could otherwise impede foot traffic and sales.

While Christmas time can be chaotic for shopping, having to line up to pay gives customers time to slow down and browse all the potential gifts from the comfort of their place in line. For retail stores, these impulse items may look like socks, scrunchies, cards, decorations and candles. For hospitality, this could be vouchers, artisanal goods, mugs or specialty crockery, beverages and hampers. Whatever you choose, the trick is ensuring your at-counter fitout catches attention and invites browsing. 

Time to embrace the opportunity

Suffice to say, it’s been a difficult two years for small business owners. Yet as stores reopen, the festive season could be the launchpad your business needs to get back on track with your pre-pandemic business plans. It’s critical that every business owner positions themselves to embrace the opportunity these next few months bring.

Now that you know how to navigate the Christmas season, it’s time to optimise every other aspect of your business for its return. Sign up to our Business Blog to cash in on valuable insights sent straight to your inbox.