Will Christmas this year be different for business owners?

woman wrapping gift

Many are saying that ‘the worst is over’ and that customers are adapting to the ‘new normal’ as the festive season approaches. For businesses, both ecommerce and retail, the last three months of the year are generally responsible for a majority of sales and profits. 


But how will this important sales period look this year? Will COVID-19 have an impact on how your business will run? Are we going to see the bulk of business taking place over the holidays normal, or are peoples’ spending habits tightening up? It’s still possible that your business, no matter its size, can take advantage of this unique holiday season and get ready to grasp the upcoming opportunities.

1. Will the pandemic impact Christmas 2020 sales?

COVID-19 and its associated lockdowns around the world have had huge impacts on spending patterns across almost all industries. As a result, business has diverged remarkably throughout the year.

However, there is some good news for the end of this year. Roy Morgan’s annual Christmas sales forecasts, conducted in partnership with The Australian Retailers Association (ARA), indicate Australians will spend over $54.3 billion during the Christmas trading period. This 2.8% increase from the $52.9 billion of retail expenditure during the 2019 Christmas trading period is a better than many would have thought possible during the year.

Unexpectedly, the category with the largest spending is predicted to be food, with pre-Christmas spending forecast to rise by 10% compared to last year’s. On the contrary, due to the continuing impact of COVID-19 and related restrictions, hospitality spending is projected to be 18.7% down on a year ago.


Predicted Spending by Category (2019 cf. 2020) Source: Australian Retailers Association/ Roy Morgan.

2. How businesses plan on advertising this holiday season

Australian’s advertising spending is reported to have grown for a third consecutive month, reflecting global improvements and Australian advertisers returning confidence.

According to a recent report by CMO, Australia’s ad spend continues to rebound, with August figures showing total spend to be only 17.2% short of pre-COVID stats. This is a big leap compared to the 43.5% drop reported in May.

So, how will business owners allocate resources to maximize this holiday shopping season’s potential?

Social media will be the winner of this holiday season’s ad spend.

Social media has transformed how people connect with one another and engage with their favourite brands, as well as playing a vital role in forging long-lasting customer relationships.

As a result of the ongoing pandemic, more consumers are now likely to engage with social media ads, with almost half of consumers stating the pandemic has made them more open to engage with social media ads.

Moreover, creating and running campaigns on social media channels has been made significantly easier, which adds to the growing popularity of this trend.


Digital ads will get the upper hand over traditional ones.

Along with social media advertising, digital ads will be the center of the season’s marketing scene. A large margin of holiday spend businesses will likely go toward digital channels such as search engine marketing and digital display ads.

3. Australian consumer insights

There’s some more amazing news for business owners: Australians are likely to spend up this Christmas. It seems like Australians are planning to return to a ‘normal’ Christmas after the uncertainties of this year, as an indicator of consumer confidence hits a seven-year high.

The Westpac-Melbourne Institute consumer sentiment survey, which measures consumer confidence about their finance, as well as the broader economy, has risen by 2.5% in November, marking its third consecutive monthly rise. 

In a report conducted by Finder, Australians are projected to be planning to spend around $17.3 billion, which is equivalent to $893 per person. Residents in New South Wales are expected to be this year’s biggest spenders, with a spending of $1,010 on average. Furthermore, gifts stay on top of this year’s festivities, with Aussies set to spend $391 per loved one.

A consistent consumer trend during the holiday season is “Starting earlier, buying less.” According to a recent Australian Consumer and Retail Studies (ACRS) research, most shoppers usually start their holiday shipping within the last 3 months of the year, with the majority doing their shopping a month before Christmas. However, 20% of people have started earlier than usual this year due to the belief that the stock levels will be lower than usual considering COVID restrictions.

Preparing for Christmas: 5 speedy tips for small and medium businesses

  1. It’s not all about Christmas Day, prepare for Boxing Day too.
  2. Make sure your online store is up to date and optimised.
  3. Plan your expenses ahead.
  4. Spread the Christmas spirit via email marketing and newsletters.
  5. And finally, enjoy some holiday time for yourself!

Have a merry and well-prepared Christmas season!