MERCHANTS SHOULD BET ON DIGITAL SOLUTIONS FOR HOLIDAY, ACCORDING TO NEW SURVEY
While crowded malls and long lines may not be in the cards this year, the holiday season is still a critical time for retailers—and it’s fast approaching.
Despite this, new research commissioned by PayPal and conducted by Netfluential reveals that many U.S. retailers are taking a reactive, wait-and-see approach to the holidays. Still, other merchants are being proactive by finding innovative, tech-enabled ways to reach consumers in the new environment.
Among the 1,000 small and medium-sized retailers surveyed in sectors ranging from home goods and electronics to fashion and cosmetics, only a small number (39 percent) are proactively preparing their businesses for the holidays. One in five businesses claim their future is dependent on this year’s holiday results, but over half (57 percent) of retailers hadn’t started preparations at the time the survey was conducted. That includes adjusting staffing levels: 70 percent say they’re not planning to hire additional holiday help or bring back employees let go due to COVID-related cutbacks.
With more than one in three merchants expecting holiday sales to be lower than last year, PayPal’s research shows that some merchants are implementing key strategies to boost revenue, including offering financing like the company’s “buy now, pay later” options such as Pay in 4, which is part of PayPal’s suite of pay later solutions and available in Q4. Headed into the holiday shopping season, flexible payment offerings like these help retailers shift from reactive mode to more strategic planning. Considering the current economic and health uncertainties, retailers must continue to adapt to drive sales and support consumers, who often depend on retailers to help make the holidays special.
While some retailers may not be hiring additional help, others are considering how digital solutions and diversifying payment options can help customers during the holidays. Almost half (45 percent) of merchants who already offer ‘buy now, pay later’ financing options expect to see an increase in holiday sales by 5 percent—a boost that’s especially impactful in a challenging year—and 42 percent said it can combat shopping cart abandonment.
Merchants are also embracing additional methods of digital sales outside of their own websites. Thirty-nine percent of merchants are planning to sell products on digital marketplaces, and 31 percent will make products available for purchase through social media apps. These adjustments can help merchants replace diminished foot traffic with online traffic.
Beyond offering flexible payment options, retailers are also stepping up their safety efforts to stay on customers’ nice lists.
The vast majority (81 percent) of retailers are taking extra precautions to keep shoppers safe. First, retailers are finding ways to limit physical contact and help customers practice social distancing. Nearly half (46 percent) are planning to offer curbside pick-up, while about the same amount will make masks mandatory and implement physical distancing rules. Thirty-four percent also say they’ll offer hand sanitizer in-store.
Digital solutions are also making it easier for customers to shop safely and more flexibly. More than a third (34 percent) of retailers who sell in brick-and-mortar stores are implementing cashless payment options. In addition, among fashion retailers, 39 percent plan to offer virtual alternatives to fitting rooms, including online fit or sizing tools, virtual showrooms, and virtual stylists.