The Pandemic’s Impact on Festive Spending

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From mass job losses to not seeing family and friends for months on end, the COVID-19 pandemic has pushed people to their limits in 2020.

As an incredibly difficult year draws to a close, people are starting to accept that this festive season will be anything but typical. But while a portion of consumers have reined in their spending due to financial uncertainty, others are spreading Christmas cheer by indulging in gifts for their loved ones.

The graphic above from Raconteur explores how consumers’ festive spending in the U.S. and UK has changed as a result of the ongoing pandemic.

Will the shift trigger permanent changes in the retail industry?

Festive Budget Breakdown

According creative agency Kinetic, half of all UK adults surveyed believe this Christmas is more important than ever before, with that figure rising to three quarters for 18-34 year olds.

However, given consumers’ concerns over the future of the economy, they are expected to reduce spending during the festive season. In the U.S. for example, spending will decline by 7% to $1,387 per household.

When it comes to how consumers plan to spend their hard-earned cash, some interesting insights emerge. As many have saved significantly on socializing and travel—which is down 34% year-on-year—they plan to put this money towards items for themselves instead of gifts and gift cards for others. These items include clothes, at-home entertainment, and home furnishings.

It therefore comes as little surprise that the global online home decor market is estimated to grow at a compound annual growth rate (CAGR) of almost 13% between 2020-2024 with revenue of over $80 billion.

Dampening the Christmas Spirit?

Unsurprisingly, over half of all U.S. consumers are anxious about shopping in-store this holiday season. The vast majority have health and safety concerns, with 71% being the most worried about dealing with others who aren’t taking the virus seriously. This is closely followed by being around, or too close to others in stores.

Therefore, when it comes to physical shopping, people feel more comfortable in local stores or at outdoor markets and much less so in shopping malls.

Safety in Online Shopping

Considering this change in mindset, almost 60% of UK consumers said that they will be shopping online more this Christmas.

Here’s a closer look at how they plan to shop differently during the 2020 holiday season:

But while ecommerce sales are expected to spike over Christmas, delivery speeds and shipping delays are also major concerns for consumers. As a result, many of them started their shopping much earlier this year to avoid disappointment. In fact, over half of all UK shoppers had started their Christmas shopping before November had even arrived.

Bidding Adieu to 2020

The end to a painful year for many can’t come soon enough. But boarded-up storefronts, and “for sale” signs serve as a harsh reminder of the fragility of the retail sector and its reliance on consumer sentiment.

Even as we march forward guided by the hope of an effective vaccine, the future of retail remains uncertain. For consumers, their confidence will build once more, but how they choose to spend their money following the festive season will be more important for businesses and the economy than ever before.

The Biggest Tech Mergers and Acquisitions of 2020

For most businesses around the world, 2020 was a year of difficulties, lost business, and economic hardship. For Big Tech, it was a boon.

After COVID-19 hit hard in March, tech companies started to see their customer bases and revenues grow at an increased rate as people were stuck at home and utilizing their services.

Since down markets are the perfect time to consolidate, 2020 also saw big tech companies take the opportunity to grow their business with major mergers and acquisitions (M&A). After a quieter year in 2019 that saw tech investment activity dip, it was a resurgence to expected form.

In this graphic, we visualize the year’s biggest tech deals above $1 billion using data from Computerworld, which tracked the year’s biggest acquisitions.

Deal Activity from the Get-Go

Though 2020 was all about COVID-19 and its impact on the market, the tech sector had major deal flow even before the pandemic began.

By the end of February, six of the 19 biggest tech mergers and acquisitions of the year had already occurred—and the month of February alone saw the most major deals of any month with four.

The first deals of the year were also some of the biggest. Morgan Stanley’s purchase of online brokerage E*TRADE for $13 billion and Koch Industries’ $11 billion completed takeover of software company Infor were the 4th and 5th biggest tech acquisitions of 2020.

Other big moves included purchases from tech and payments firms Salesforce, Visa, and Intuit, as well as private equity firm Insight Partners.

The Biggest 2020 Deals Were Saved for Last

After a quiet March, only a few large deals occurred from April to the summer.

Nvidia’s $6.9 billion purchase of network chip producer Mellanox Technologies in May was more than a year in the making, and Uber’s $2.65 billion acquisition of food delivery rival Postmates in July significantly consolidated the U.S. food delivery scene.

As it turned out, the biggest deals of 2020 were back-loaded for the end of the year. Just under half of 2020’s billion-dollar tech M&As happened from September‒December, including the year’s three largest tech acquisitions:

Of the 19 deals over $1 billion tracked above, Salesforce and Nvidia were the only companies to make multiple major acquisitions. And although tech saw gains across the sector, most of the major M&A activity was centered around semiconductors.

As 2020 winds down, the market focus on tech is expected to last into 2021. However, the markets and the world at large continue to deal with COVID-19.

The rollout of vaccines has put the world on a timeline to reach a post-COVID era. How will the tech landscape be affected?