How local businesses can strengthen their sales for the holiday season

During the coronavirus-related restrictions, local retailers were able to benefit significantly from increasing consumer awareness. 27% of German consumers shopped more at local retailers. This figure even rose by a further five percent after the restrictions were eased.

Local retailers should not ignore two further findings of the study for the upcoming holiday season: the ever-growing online trade and the certainty that, despite the crisis, consumers' budgets are not at risk this Christmas. This is because the majority (60 percent) do not plan to reduce their gift budgets this year. They can use this to their advantage to generate sales despite the continued preference for online shopping. This requires targeted marketing and online strategies.

Festive mood despite Covid-19: gift shopping mainly online

Due to the nationwide restrictions, German consumers sought shopping alternatives without exposing themselves to the risk of possible infection. 52% therefore opted for the internet. There was also an interesting development in the local retail sector: initially out of solidarity, German consumers increasingly shopped at local stores, which were primarily reliant on in-store retail before the outbreak of the coronavirus pandemic - as long as they had an online offering or were able to set one up at short notice. Interestingly, however, the proportion of those who increased their household budget in favor of local stores continued to rise after the easing of measures (33%).

Shopping behavior in the second half of the year will therefore be shaped by two trends in particular: Firstly, the majority of German consumers will continue to use online offers to make their purchases. Secondly, more than half of German consumers (51%) will focus their shopping on the upcoming holidays in December, while 36% will also use special promotional days such as Cyber Monday for their purchases.

Even in times of crisis, German consumers are looking forward to the festive season and do not want to miss out on buying presents. Even the threat of a second wave of infection does not seem to be dampening this anticipation: German consumers are not planning to reduce their household budget for the upcoming Christmas holidays - even if nationwide restrictions come into force again. A total of 85% are leaving their budget at the same level as last year (53%) or are even planning to increase their budget for this purpose (32%).

Consumer First: Local retailers need to realign their strategies

This presents a great opportunity for local retailers to play at the top in the long term: SMEs can use the attention that customers are now paying to local retail to retain consumers in the long term during the holiday season and generate sales despite the prevailing pandemic.

To do this, small and medium-sized companies must adapt their marketing strategies and online offerings to the trends that will dominate the second half of the year. In addition, 26% of German consumers stated that they would prefer to buy from national retailers. Aspects relating to shipping, such as shipping costs, customs duties and delivery times, are still the main reasons for not wanting to make purchases on international markets.

International retailers can offer their customers incentives to counteract their concerns. For example, they can ensure that their stocks are always up to date and full. Immediate availability speeds up lengthy processing procedures and consequently reduces shipping times. In addition, in the event of a return, for example, they can waive shipping costs that would otherwise be imposed on consumers in order to make shopping in their store more attractive for international customers.

Savings are still being made

Even if the majority of German consumers are not planning to reduce their budget, they still love to save money: Around a third of consumers said that sales promotions and other offers would influence them in their Christmas shopping. Free shipping (26%), discounts, coupons and vouchers (22%) and special deals such as "2-for-1" (21%) are the most convincing special offers.

The Christmas season could open up additional target groups and therefore additional sales markets, even for local retailers in Germany: The majority of French and Chinese consumers (46% each) stated that they plan to expand their gift shopping to the European market at the end of this year and the beginning of next year respectively.

Finding the right strategy

"During the COVID-19 restrictions, consumers supported the local retailer next door out of solidarity so that they would not have to close their business for good due to crisis-related losses. These retailers must now use this new awareness for the Christmas business," says Stefan Bernauer, Country Manager DACH at Rakuten Advertising, commenting on the commitment of German consumers. "The trend towards increased online shopping, which has picked up speed during the restriction periods, will continue in the second half of the year through to the holidays. Local businesses can also take advantage of this development by optimizing their online customer experience and targeting consumers and their plans for the coming months."

Another way to attract German shoppers in the coming months is the use of deals and discount campaigns: A well-placed special offer in the online store that is individually tailored to (potential) customers can be a good argument for choosing a product from the small company next door.