Never-ending early holiday deals are sure to cause deal fatigue this year, experts warn. It's like endlessly 'hearing Christmas music before Thanksgiving.'

Never-ending early holiday deals are sure to cause deal fatigue this year, experts warn. It's like endlessly 'hearing Christmas music before Thanksgiving.'
"Everyone is going to feel a little bit of fatigue," Bloomreach's Brian Walker told Business Insider.Crystal Cox/Business Insider
  • the 2020 holiday season so far has been characterized by retailers doubling down on e-commerce and offering discounts to contend with the coronavirus pandemic.
  • Business Insider spoke to seven retail industry experts about what brands can expect from the stretched out holiday shopping season.
  • Experts noted that retailers have witnessed major success so far, with shoppers jumping into a spending frenzy in mid-October.
  • However, they also warned about possible "deal fatigue" that could erode customers' loyalty to specific brands.

The 2020 holiday season is shaping up to be one for the history books, even as the coronavirus pandemic rages on around the globe.

Retailers this year have had to contend with a number of logistical concerns, such as fears over in-store safety. But the most successful companies have been able to pivot to e-commerce in order to match shoppers' evolving spending habits.

Major players like Amazon, Walmart, and Target all shifted their summertime online sales events to mid-October, ushering in an early start to the holiday season. The trio of retailers have each gone on to announce more deals over the final three months of the year, with other industry brands following suit.
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Business Insider spoke with seven experts about what retailers can expect from this year's busy holiday shopping season. Generally, they warned that the abundance of online deals available to consumers may prove to be a bit of a double-edged sword. On one hand, the spike of early e-commerce spending hitting in October has been excellent for national retailers. But markdowns may cause consumers to suffer from "deal fatigue," prompting them to disengage from brands that want to build up passionate customer bases via loyalty programs and exclusive perks over the long haul.

'A little exhausted'

Amazon's need to avoid logistical tangles over the summer led to the first mid-October Prime Day in its history. Target and Walmart predictably announced their own deals soon thereafter. But the move also indirectly began the holiday shopping period unusually early.

Tom Caporaso, CEO of loyalty program firm Clarus Commerce, said that in his 25 years working in retail, he's never seen such an early start to the holiday season. The shift has been gradual over the past few years, with customers trending away from late November holiday shopping and opting instead to buy earlier in the month. He said the move to October in 2020 has been "kind of amazing." In one recent study, Clarus Commerce found that 56% of millennial respondents admitted they would start their holiday purchasing before Halloween.
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This early explosion of deal promotions by retailers, however, will make customers increasingly numb to the industry's discounting strategy as Christmas approaches, Brian Walker, chief strategy officer at e-commerce experience firm Bloomreach, said.

"Everyone is going to feel a little bit of fatigue," he told Business Insider, adding that he expects customers to become "a little exhausted by the advertising," comparing it to "hearing Christmas music before Thanksgiving." Brand messaging has, as a result, become an all-important factor in combating deal fatigue, said Nikki Baird, vice president of retail innovation at retail tech provider Aptos. She pointed to national retailers like Best Buy that built up trust with consumers by stating up front that their October deals were "going to be the best offers" of the season.
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The danger for retailers is that by relying on discounts, companies will be stuck in what Rob Fagnani, the head of business development and operations at e-commerce solutions firm Formation, calls a "race to the bottom." Not only will retailers be forced to undercut competitors, the strategy is also unlikely to create brand devotion with customers.

"We want to get people in, but then personalize what's important to each customer along the way, so we can capture their loyalty," Fagnani said.

E-commerce is 'the new normal'

While the extent to which "deal fatigue" will affect customers long term shopping decisions remains unclear, one element of the holiday 2020 season that experts agree on is the growing importance of e-commerce.
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"I think e-commerce is going to continue to grow very rapidly, although probably not as strong as it's grown this year," Edward Jones analyst Brian Yarmough said. "The pandemic has pulled forward many years of penetration in a couple of months."

With the industry-wide push towards ecommerce also comes anticipated pain points in meeting higher expectations from customers. According to a new survey of 1,610 global executives by consumer credit reporting agency TransUnion, 85% of respondents believe that smooth digital transactions are essential to business survival.

"If you don't transform to be a technology provider almost, you're just going to see an increased abandonment rate of the shopping cart," Shai Cohen, vice president of TransUnion Fraud Solutions, said of retailers' online exploits.
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Mousumi Behari, the director of the digital strategy practice at Avionos, added that e-commerce "is the new normal."

"It's easy, it's efficient," he said. "You can order the new pair of shoes you need while you're sitting in the car at a red light. You can get it delivered right away to your home and if it doesn't fit, you can get it sent right back."

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