This holiday season, the juxtaposition between digital and physical sales continue to converge. Retailers and brands are thinking outside of traditional sales conventions and consumers are valuing experiences and wellness over other products. Fast growing digital natives are joining forces with mass market retailers and they are leveraging each other’s strengths. Retailers are rethinking how they strategize physical spaces (order-ahead, curbside, etc.) and digital natives are using their loyal online communities to drive in-store traffic.

Here are some categories and trends we are watching for the 2018 holiday season.

Earlier this year, Amazon made waves when it purchased Whole Foods and it continues to leverage its physical footprint as a channel to distribute its Amazon holiday toy catalogues, as well as other in-store collaborations. With a multi-store pilot, Birchbox has joined forces with Walgreens to open 400- to 1,000-square-foot Birchbox shops within select stores in Chicago, Dallas, Los Angeles, Miami, Minneapolis and New York.  And Build-A-Bear launched shop-in-shops inside targeted Walmart locations in California, Texas, Florida and Arizona.

Pick-up lockers are the growing rage

As a means to drive in-store traffic, retailers are dedicating floor space to pick-up lockers and they are helping boost sales as customers are motivated to make an additional purchase in-store while picking up their online order. Home Depot reported 46 percent of its online orders were picked up in their stores . Whole Foods outlets that provide electronic lockers saw pick up visits increase 11 percent, compared to 7 percent in stores that did not have lockers. Kohl’s experienced a boost in foot traffic thanks to electronic parcel lockers and reporting seeing a 12 percent increase in foot traffic after installing return centers.

Holiday Shopping Crowds walk along Broadway in Manhattan two days before the Christmas holiday in New York City, Dec. 23, 2018. With a continued strong economy and a low unemployment rate, millions around the country are flocking to malls and making last minute online purchases during one of the busiest weeks for retail stores in the season. Photo: Spencer Platt/Getty Images

Millennials prioritizing experiences over products

In today’s Instagram-worthy world, experiences are currency and millennials and Gen Z consumers are prioritizing experiences. Nearly one in three plan to give meaningful experiences as gifts, followed by the prioritization of craft-related gifts. We expect luggage to see a lift again this year as travel-related experiences are a key are of focus for this demographic group. Retailers are also picking up on significant shift to the importance of health and wellness trend by expanding their assortment in the category, and partnering with popular health and wellness tastemakers for curated gift guides, and at-home fitness equipment brands such as Peloton and WaterRower.

Toys are seeing the love

With retailers fiercely competing to pick up Toys R Us’ share in the market, the toys segment continue to be a category to really watch this holiday season. Retailers like Walmart and Target aren’t just allocating shelf-space to toys, they are investing in social media campaigns with kid and mommy influencers, investing in more creative and elaborately designed “Meet Santa” activities and planning integrated in-store calendar of events.

It is not your average holiday season, and retailers and brands are thinking differently. Mobile will see traction and have a stronger presence within the shopper experience this holiday season, with up to 68 percent of all the traffic for the season expected to be sourced by the phone, even while brands invest more to make their physical experiences more special and unique.

Melissa Gonzalez is CEO of the Lionesque Group and author of “The Pop Up Paradigm: How Brands Can Build Human Connections in a Digital Age”.