PayPal recently surveyed small and medium businesses in the U.S. on their response to COVID-19 and plans for the holiday shopping season. As typically a peak selling season for retailers, the data revealed that only a small number (1 in 3) are proactively preparing their businesses for the holidays. In addition, 1 in 5 businesses claim their future is dependent on this year’s holiday results.
‘Tis the season to be proactive
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 5 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.
As COVID-19 has changed shopping behaviors, the data also found that 70% of retailers are not hiring extra staff or bringing back previously laid off employees, and 28% of businesses are still waiting to see what demand looks like later in the year to even start planning.
Additionally, with 1 in 3 merchants expecting holiday sales to be lower than last year, PayPal data found that there are merchants implementing key strategies to boost revenue, including:
- Converting Browsers into Actual Shoppers with Flexible Payments: Over forty percent (45%) of merchants who already offer ‘Buy Now, Pay Later’ financing expect to see an increase in holiday sales and 42% said it can combat shopping cart abandonment.
- Vital Virtual Moves to Boost Sales: 39% of merchants are planning to sell products beyond their own websites on digital marketplaces and 31% will make products available to buy on social media apps.
- Fitting Rooms Go Virtual: Given half of merchants (52%) surveyed are unsure whether consumers will use fitting rooms to try on clothes, nearly forty percent (39%) are offering virtual alternatives. This includes online fit or sizing tools (26%), virtual showrooms (23%) and virtual stylists (23%).
- Safety First: Over eighty percent of merchants are planning on implementing a range of changes to keep consumers and employees COVID-safe during in-person holiday shopping, however nearly thirty percent (27%) still say they are worried about the safety of in store shopping
One possible reason for this lack of preparation is caution and uncertainty about shoppers’ willingness to spend as much as they did in previous holiday seasons. With more than 1 in 3 merchants expecting holiday sales to be lower than last year, the research shows that some merchants are implementing key strategies to boost revenue, including offering financing like PayPal’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.
Flexible payments make the season bright.
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.
Holly, jolly—and safe.
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 will 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.
This holiday season, merchants can take a proactive approach to sales by embracing digital payment options, flexible payments, and more. .
1 “An online study commissioned by PayPal and conducted by Netfluential in August 2020 involving 1000 U.S. PayPal SMB merchants selling products directly to consumers through a website or e-commerce platform. The sample is made up of merchants in different verticals, 200 in fashion, 200 in cosmetics and 600 across home-goods, furniture, garden electronics and sport.”