What retailers should expect from the 2021 holiday season

What retailers should expect from the 2021 holiday season
Published on: Nov 6, 2021
Updated: Aug 18, 2022

Will the retail holiday season be a glorious comeback or a damp squib? Will brick and mortar stores hold strong, or will e-commerce win the day? There’s one thing we know for sure: retail has changed a lot in the past two years.

In this post, we’ll explain the latest developments in e-commerce… and suggest 5 ways you can prepare for the 2021 holiday season.

What’s going on in retail in 2021?

First, let’s cast our minds back to the Golden Quarter in 2020. As more consumers choose online shopping, the peak retail season started earlier and ran for longer. Even the holidays which had traditionally been dominated by big box stores - such as Thanksgiving and Black Friday - were taken over by e-commerce.

And we expect more of the same in 2021. Consumer surveys from Facebook show that not only have most consumers changed their shopping habits in the pandemic; 92% expect to keep those changes. So a longer, more digital holiday season is here to stay.

However, it’s not all good news. Shortages of labor, freight and materials could cause problems for supply chains. Strategic planning, proactive customer service, and operations experience will be key here.

And there’s one more challenge on the horizon: privacy laws. As we head into a new year, new legislation is coming into force and third-party cookies are on the way out. Brands and advertisers are looking for new ways to find, convert, and retain customers.

These privacy changes build on trends that were already in motion. After direct search, the biggest growth driver for e-commerce last year was returning customers. Staying in touch with customers throughout their shopping journey has never mattered more.

5 ways retailers can prepare for the 2021 holiday season

#1 Secure supply chains and delivery systems in time for peak

2021 has been a challenging year for retail supply chains, with issues from covid-19 labor shortages to the Suez Canal getting blocked. But with the holiday shopping season coming up, retailers can’t afford delays.

So they’re taking action now. Retailers with a physical presence have started to use stores “strategically”, using them to fulfil online orders alongside their usual e-commerce warehouses. They’re also investing in better tech, training store staff to pack deliveries and answer online queries, and updating their contingency plans.

#2 Offer a seamless delivery experience

The majority of US consumers now do their holiday shopping online. Why? Because the experience works for them. 79% say that their experience with a retailer is just as important as the actual products they buy.

For e-commerce, the customer experience is all about shipping. Fast delivery, easy returns, and plenty of flexible options are the way to shoppers’ hearts. Expect a high demand for next-day delivery, expedited delivery, and curbside pick-up services throughout the Golden Quarter.

#3 Focus on customer retention

Last year, a significant amount of retail growth was driven by returning customers. But without third-party cookies, how will retailers track, retarget and retain consumers?

The new privacy laws mean big changes for advertisers and retailers – and big opportunities for those who act fast. Now is the time to build a loyal customer base and a strong list of subscribers.

Use every stage of the e-commerce experience to build your relationship with customers. The conversation doesn’t end at the checkout: you can use everything from order tracking to delivery notifications and returns to delight customers, request feedback, and stay in contact.

#4 Create an experience for everyone

Retailers have been talking about omnichannel for years. But 2021 is when omnichannel retail really came into its own. More people are shopping online than ever before; but they’re also hungry for real world experiences and a personalized approach.

One major trend in 2021 is the use of online recommendation engines. Using cues from individual customers, they offer personalized recommendations, just like a personal shopper. We’re also seeing more use of virtual reality and augmented reality, as customers try products out online.

#5 Use automated processes during the holiday season

It’s set to be a busy holiday season for customer service teams, as shoppers raise questions, track orders and make returns.

The solution: using automation and AI to take care of the most repetitive tasks. Pro-active communication reduces the number of customer enquiries, and automated operations free up staff to focus on other tasks. One study found that automated chatbots could handle up to 97% of support queries from customers.

Read the parcelLab holiday season report for even more insights and advice.

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