With Halloween behind us and the smell of fall in the air, the holiday season has officially begun. That means one thing for retailers: consumer spending. As much as 30 percent of retailers’ annual sales come from sales during the months of November and December, with the National Retail Federation predicting a 3.7 percent increase in holiday retail sales this year. Retailers are optimistic about the forecast but they should be prepared and understand the growing trends and changes in consumer holiday spending this year. Below are some key holiday trends that retailers should take into consideration:
Trend #1: Black Friday is a thing of the past
Shoppers are no longer waiting until the day after Thanksgiving to get their holiday deals, with nearly 25% starting their holiday shopping before Halloween.Consumers will complete more holiday shopping (29%) before the start of Black Friday week than during (26%) . The president of the National Retail Federation stated that this is occurring because “retailers began providing holiday discounts much earlier, both in stores and online, so consumers didn’t have to wait until Black Friday for really good deals on gifts and items they wanted.” As a result, people began shopping earlier to capitalize on the deals. However, despite a decline in Black Friday popularity, retail sales are not predicted to be affected. As long as retailers recognize the shift in consumer spending and offer deals early, a decline in Black Friday sales won’t affect overall holiday spending.
Trend #2: Millennials spend more and want it now
With millennials representing 75 million consumers and an estimated $63 billion dollars in holiday spend this year, they are predicted to outspend any other generation in online purchases this year! Not only are they spending a lot of money this holiday season, they are spending a lot of their own money on themselves and they crave diverse experiences: 52% of their holiday spending will go toward experience-related purchases such as travel and entertainment, versus 39% for older shoppers . Millennials are leading the way in the growing trend of experiential gifts. Lastly, the NRF’s latest survey found that 34% of millennials plan to take advantage of retailers’ same-day delivery options. They are willing to pay more for expedited delivery, far higher than other generational shoppers.
Trend #3: Shoppers want savvy deals and free shipping
The majority of holiday shoppers — 87% — say price is the number one driver of holiday spend choices, followed by deals and promotions. Additionally, 83% say standard free shipping would make them extremely likely to make a purchase. However, only 21% of retailers offer free shipping without a minimum purchase, meaning many are missing an opportunity to generate more sales. Another big factor in a shopper’s purchasing decision is the retailer’s return policy. Over two-thirds of shoppers want to return online purchases in-store, with over half saying free shipping on returns would increase the likelihood of a sight-unseen purchase; however, 43% of companies do not offer free return shipping .
Trend #4: Shoppers want enhanced in-store experience
The purchase may not happen in-store but almost 60% of consumers want to see, touch and feel the merchandise before they make the purchase . They may ultimately choose the convenience of expedited shipping but they want an in-store experience from the retailer. If they do choose to purchase in-store, shoppers said the number one thing retailers can do to improve their experience is an easier checkout. Creating a simple checkout for shoppers should be a priority for retailers this season.
Be ready for the trends…
Be ready for the trends and don’t miss out on holiday spending this year! With Gigwalk you can make sure your execution is shining bright this holiday season by checking on products and places that matter most, seeing gaps and non-compliance, then closing the loop with verifiable solutions. Here’s to flawless retail execution this holiday season!
1. Retail and Consumer 2015 Holiday Outlook: Beyond Black Friday…the long reach of the November shopping season, PWC, http://www.pwc.com/us/en/retail-consumer/2015-holiday-outlook/key-findings/black-friday.html (2015)
2. Retail and Consumer 2015 Holiday Outlook: Millennials matter, PWC, http://www.pwc.com/us/en/retail-consumer/2015-holiday-outlook/key-findings/millenials.html (2015)
3. Retail and Consumer 2015 Holiday Outlook: Savvy shopper choose discounts, promotions, PWC, http://www.pwc.com/us/en/retail-consumer/2015-holiday-outlook/key-findings/promotions-discounts-shipping.html (2015)
4. Retail and Consumer 2015 Holiday Outlook: It’s the interaction; not the transaction, PWC, http://www.pwc.com/us/en/retail-consumer/2015-holiday-outlook/key-findings/role-of-the-store.html (2015)
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