Holiday 2021 is set to be a spectacular season of growth. Deloitte anticipates retail growth of 7-9% for 2021—on par with 2020’s retail growth of 8.3% and double 2019’s growth of 4.1%. However, after nearly two years of chaos, the pandemic fallout is still complicating business and logistics. And brands should do everything they can to prepare for any foreseeable challenges throughout the holiday and into 2022.

The 2021 holiday season will be a lucrative but challenging season for brands

August saw a record of resignations in the U.S. The global supply chain has slowed tremendously, delaying the delivery of raw materials, finished goods, and even fuel, causing a ripple effect across sectors and generating uncertainty in consumers worldwide. Many pandemic-related economic relief policies have now been terminated, leaving consumers with less income than they had last year. Meanwhile, worldwide travel has begun to open up, meaning that retail again has to compete with travel for consumer dollars.

This all points to several interlocking factors that are creating significant obstacles for business this holiday season. Public health concerns, climate challenges, and the labor crisis has had devastating impacts on the global supply chain. Many companies have had to take action by sourcing raw materials domestically at higher prices, thinning assortments, or chartering their own ships to move goods from all over the world. 

Forecasting demand

Faced with higher expenses and lower incomes, consumers are more price-sensitive than ever. Some are cutting back their consumption entirely to allow them to work less and spend more time with their families.

On top of that, student loans, rents, and mortgages will soon be due after being placed on hold for several months during the pandemic. At the same time, many workers have lost (or left) their jobs. So while the demand forecasts are optimistic for the 2021 holiday season, brands also need to be aware of how current events could impact consumer actions. 

Meeting demand

Sourcing raw materials for your business will prove to be more complicated than ever this holiday season. Before the pandemic, it was easy to source some materials from China, others from India, more from Argentina, and perhaps additional ones from Italy. That’s no longer the case. 

Natural disasters and other climate events have wiped out crops, forests, mines, and more. Energy shortages have slowed down harvesting efforts across all industries. Industrial machinery is even been decommissioned due to a lack of parts for repairs. In response, many brands must either put items on backorder into late 2022 or find a way to source their materials locally. 

And the supply chain challenges don’t end there. Due to rising energy prices and the growing labor crisis, manufacturing is more complicated and expensive than before. Shipping finished goods take longer due to shortages in shipping containers and labor shortages in inspections and logistics. 

The final challenge, then, is keeping consumer attention and trust despite empty shelves, out-of-stock notices, backorders, long service times, and consistent delivery delays. 

How to navigate pandemic challenges and drive profits during the 2021 holiday season

Thankfully, the picture we’re painting here isn’t all doom and despair. Hidden inside this holiday’s challenges are golden opportunities to drive sales and forge long-term relationships with loyal customers. And despite the numerous challenges facing businesses this year, there are several ways businesses have positioned themselves to maximize Q4 revenue going into 2022. 

Digital retail is booming, and shoppers started checking off their holiday shopping lists as soon as September. At the same time, consumers are more frequently venturing out in person to shop locally than they did last year.

Consumers also have a lot of pent-up celebratory energy from last year—so brands that position themselves well with reliable market research and perfect timing will see lots of growth throughout the holiday shopping season and into 2022. 

Let’s look at ways brands are staying competitive despite the shipping and stock challenges. 

Experiment, analyze, and launch early

While it’s essential to make the most of methods that already drive tons of revenue, it’s also important to try new things and innovate your products and industry. Consumers are hungry for new experiences—especially after two years of lockdown life. We see the most success in brands that aim to take their consumers’ breath away.

Brands are also spending time looking over what worked and didn’t work in holiday 2019 and 2020, then comparing that data to critical consumer insights from 2021. They’re leveraging these insights to formulate a strategy that integrates both new and old methods, as well as testing new ideas for the 2021 holiday season.

Brands are launching early. The bottom line is that consumers started their holiday shopping as early as September—they’ll only gain more momentum the closer Black Friday and Christmas Eve become. 

Creatively embrace diversity

The holiday season is more than Christmas and Thanksgiving. Many walks of life celebrate during these months. Brands that meet people where they are will be more likely to win long-term customer loyalty and increase customer lifetime value.

Brands could do well to acknowledge diverse cultures and celebrations through social media, email, or even custom product lines and marketing. Also, they may want to get creative by offering lifestyle alternatives for popular traditions—maybe it’s finally time to promote your cooking utensils with a vegan recipe campaign in preparation for Thanksgiving?

Communicate with your customers

By now, everyone has felt the impacts of supply chain challenges. And while many consumers are frustrated, it’s essential to confront their concerns and complaints head-on with transparency and empathy. Brands that maintain radio silence or vent their frustrations to customers in a way that's unfriendly or unprofessional risk damaging their lasting brand reputation long after the supply recovers.

Leverage trends and traditions

Consumer trends emerge suddenly and spread like wildfire in today’s digital landscape. They also end abruptly with little warning. Agile brands that react swiftly to trend opportunities will drive higher revenue throughout the 2021 holiday.

The holidays are also known for many traditions—it’s up to your brand to decide which traditions to embrace, ignore, challenge, or reimagine. A clever inversion of a common holiday motif can attract significant interest, while participating in classic traditions can tap into consumers’ emotions and sense of nostalgia.

Utilize the full marketing flywheel

The holidays are a time to pull out all the stops on marketing efforts. Use every tool you have available to drive sales this holiday season.

• Influencer marketing (social media, podcasts, blogs)
• Social media content (short-form, long-form, text, video)
• PPC campaigns (Google, Facebook, Instagram, Amazon)
• Email campaigns
• Direct mail campaigns
• Print ads in magazines and newspapers

Incentivize customers who are on the fence with abandoned cart discounts. Draw in new customers with free shipping. Run a sale throughout November and December—not just on Black Friday. Now isn’t the time to be shy—it’s the time to sell, sell, sell!

Do your research

The 2021 holiday season will be an unpredictable time. But agile market research can be critical to driving profits into 2022.  By leveraging the ability to rapidly gain precise insights, brands can manage to shed light on consumer preference and behavior and illuminate the ever-changing landscape of the market. 

If you’re looking to the most of the holiday sales opportunities with expert market research, or ready to learn how you can start conducting agile research of your own, head to aytm.com today and create a free account.