We count down to the holiday season with a 12-week series focused on the data, trends and observations surrounding the end-of-year peak. In the second week of the series, we discuss the festivalization of holiday retail and its implications, including the benefits for US retailers.     Coresight Research is spearheading the inaugural 10.10 Shopping Festival in partnership with Shopkick and Fashwire on October 9–12, 2020. The festival was inspired by the success of Singles’ Day and 6.18, China’s two biggest shopping festivals. Coresight Research began planning the 10.10 Shopping Festival in June, after large retailers started voicing concerns about shipping capacity constraints this holiday season. As part of its efforts to bring the retail industry together, Coresight Research cohosted a webinar on September 16 with David Fisch, CEO of Shopkick, and Shay Gipson, Head of Strategic Partnerships at Fashwire, to discuss how retailers and brands could participate in 10.10. Shopkick outlined more details in a September 25 press release, prior to Amazon’s announcement of Prime Day 2020. On September 28, Amazon confirmed that Prime Day 2020 would run on October 13–14 for shoppers in Australia, Austria, Belgium, Canada, China, France, Germany, Italy, Japan, Luxembourg, Mexico, the Netherlands, Singapore, Spain, the UAE, the UK, the US and (new for 2020) Turkey. Amid the coronavirus crisis, the event was postponed from July.

Why It Matters

The shape and scale of consumer demand during the holiday peak is less certain than ever. Our holiday coverage aims to offer directional guidance. In addition, as supply chains are strained and many retailers canceled orders earlier in 2020, the dynamics of this holiday season will be unlike any before. We believe that it could be unexpectedly strong as consumers have pent up demand and, due to the limited options for spending on services in recent months and over the holiday season, more discretionary income is available to be spent on gifts for others and for “selving” (self-gifting).

Festivalizing Holiday Retail: In Detail

10.10 Shopping Festival The 10.10 Shopping Festival will run on October 9–12, including the event’s namesake day of October 10 (or 10.10). The event will offer a gamified retail experience as well as deals to consumers, while driving traffic and pulling forward holiday shopping for retailers. During the 10.10 Shopping Festival, which will span Shopkick’s Shopper Appreciation Weekend (October 9–11), shoppers will earn major rewards in the form of “kicks” (Shopkick’s rewards currency), for visiting and purchasing from participating retailers and brands, both online and offline. “Kicks” can be redeemed for gift cards or donated to participating charitable organizations.  In addition, Fashwire’s participating designers will be presented in a curated global shop available in store, online and via the Fashwire mobile app. All participating designers will donate a portion of their proceeds to charitable causes. Philanthropy is a core component of the 10.10 Shopping Festival, which encourages retailers and consumers to give back. Shopkick members will have the opportunity to redeem their “kicks” in the form of a charitable donation, and Shopkick will donate 5% of the monetary value of all “kicks” earned throughout the weekend to a charity. The festival is partnering with charities including St. Jude Children’s Research Hospital, a cornerstone partner; Pink Aid, helping to celebrate Breast Cancer Awareness Month with a 10.10 Gala; Soles4Souls, which turns unwanted shoes and clothing into livelihoods for those in underdeveloped countries; and The Mayor’s Fund to Advance New York City, which supports people with disabilities (PWD). Supporting partners for the festival include innovators such as Newmine, Position Imaging, Science Inc. and Trove; REITs, landlords and shopping centers such as American Dream; supply chain companies such as Blue Yonder; and the Manhattan Chamber of Commerce. Prime Day Prime Day will be held on October 13–14 in most countries this year. It remains a 48-hour event, like last year, but between September 28 and Prime Day, Amazon.com will offer daily offers for Prime members. Here’s what’s new:

• During Prime Day, the company’s livestreaming platform, Amazon Live, will spotlight deals from small businesses selling on Amazon.com.
• In its daily deals leading up to the event, Amazon is promising discounts of up to 30% on premium fashion brands; up to 40% off Amazon brands including in fashion, pet, food, and health and wellness; and $15 off shoppers’ first order of $50 or more on Amazon Fresh.
• Greater prominence for small businesses includes a “Spend $10, Get $10” promotion from September 28 to October 12, curated collections of products from small businesses, and Amazon claiming to spend more than $100 million on promotional activities to help small firms grow sales.

The Impacts and Implications The 10.10 Shopping Festival will herald the start of the holiday season for US retail, in place of the more traditional Thanksgiving and Black Friday. This event will help to pull forward holiday shopping, to help alleviate supply-chain pressures—especially in the fulfillment of online orders—against the backdrop of the Covid-19 crisis. Already, three in 10 US consumers expect to start shopping earlier for the holidays, compared to last year. This compares to just one in 10 that expects to start later. Among those expecting to shop early, the earlier availability of discounts is a prompt for 35% of respondents (highlighted in Figure 1). Many shoppers appear to be attuned to the pressures on shipping capacity, with almost half (47.8%) of early shoppers concerned about online orders being delivered in time.   [caption id="attachment_117090" align="aligncenter" width="700"] Base: 339 US respondents aged 18+ who expect to start holiday shopping earlier than last year
Source: Coresight Research [/caption]   Retailers must not miss this opportunity to:

• Capture early holiday sales.
• Spread demand over a longer period and so alleviate pressures in fulfillment.
• Piggyback on consumer interest in shopping festivals such as Prime Day.

And, of course, they must minimize any loss of sales to Amazon. On September 29, the day after Amazon confirmed the dates of Prime Day, Target said that it will hold its Deal Days promotional event on the same two days—October 13 and 14. Target will also expand “Black Friday pricing” through the whole of November, and promises to offer almost 1 million more deals than last year. Soon after, Walmart announced a Big Save Event, running October 11–15. In 2019, we saw rival US retailers and marketplaces run promotions against Prime Day:

• Target Deal Days ran from July 15 through July 16, the same days as Amazon Prime Day.
• Online marketplace eBay’s “Crash Sale” on July 25, 2019 saw a wave of deals, from electronics and home items to fashion and accessories. So far this year, the retailer has not announced plans for the event.
• Walmart launched a “Google Week” from July 8 to July 16 in 2019.

What We Think

October shopping events will help pull forward holiday demand, extending the season to three months. Coresight Research has heard concerns about shipping capacity constraints this holiday season from a number of retailers. Major logistics providers have indicated that their already strained networks will be severely tested in the months ahead, as e-commerce captures a bigger share of holiday sales. Other advantages of festivalizing holiday retail include the following:

• Shopping festivals give brands an opportunity to clear inventory that may have accumulated during the Covid-19 crisis and lockdowns. Globally, Amazon sold over 175 million items—ranging from groceries to devices—on Prime Day in 2019.
• Shopping holidays’ limited-time offers create a sense of urgency for shoppers by generating a fear of missing out.
• Festivals can serve as a springboard for new products. Each year, Amazon highlights new products from curated brands, which are launched during the event. This year, Prime Day in India saw over 300 products launched. In China, Singles’ Day is a major event for new products.

Implications for Brands/Retailers

• Retailers can jump on board existing festivals, launch their own events or extend traditional holidays such as Black Friday to much longer periods. Retailers must not miss the opportunity to capture the expanding demand for early holiday shopping. They should seek to spread demand over a longer period and so alleviate supply-chain pressures. They can also piggyback on shopper interest in festivals such as Prime Day. Furthermore, retailers should seek to minimize any loss of sales to Amazon.