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Holiday spending to climb, but shoppers want deals

BY Deena M. Amato-McCoy

Consumers are feeling generous this holiday season, but they still want the biggest bang for their buck.

This was according to “The Conference Board Holiday Spending Survey, October 2018,” which revealed that holiday shoppers plan to spend about $627 on gifts this season. This is well above last year’s estimated $560.

However, these shoppers will also be doing some bargain hunting. Not only will they be looking for sales, more than a third of shoppers said they expect – at a minimum – to purchase half their gifts at a discount.

By seeking out better deals, customers may be willing to open their wallets more often this holiday season. For example, approximately 12% of consumers plan to spend more this year on holiday gifts. Sixty-five percent plan to spend about the same as last year, and the remaining 24% said they plan to spend less.

A greater number of consumers also will be shopping online, with more than 37% of consumers planning to make at least half of their purchases online.

“Consumers are excited about the holiday season and are ready to shop,” said Lynn Franco, director of economic indicators at The Conference Board.

“Consumer confidence is at an 18-year high. Unemployment is the lowest in decades. Given the strong economy and job growth – with expectations of more in the New Year – retailers should expect strong demand this season, with the potential to be one of the best shopping seasons in years,” Franco said. “However, they will still face a tough and discriminating consumer – one who is expecting bargains and willing to wait for a deal. Retailers will need to get creative and offer numerous deals and promotions, especially given the increased competition from online merchants.”

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Cardlytics: Spending trends for the holidays—and how to generate more revenue

BY Marianne Wilson

As more customers do their holiday shopping online, it’s critical for marketers to keep a pulse on where, when, and how shoppers will tackle their gift lists this year.

That’s according to a new report from purchase intelligence company Cardlytics, which analyzes actual purchase data on when, where and how much consumers spend both in-store and online. The company’s “2018 Holiday Spend Report” identified the following holiday spending trends — along with some tips on how to generate more revenue.

1. Brick & Mortar stores slow loss of share by driving sales online: Brick-and-mortar retailers’ share of spend decreased nearly 2% between 2016 and 2017, but spend at these same retailers’ online and mobile properties is on the rise.

“Help customers see the convenience of in-store purchases by playing up the value of a hands-on experience, verifiable quality, and easy gift returns,” the report recommends. “Also, strengthen online and mobile channels with convenience factors like price matching, gift guides, and free shipping to attract more digital customers.”

2. Black Friday and Cyber Monday are declining in significance: In the last few years, spend across the season has shifted to well before and after Black Friday and Cyber Monday. As a result, the mid-season spike in spend around the retail event was less significant than in years past. In fact, 30% of all holiday sales occurred the month before Black Friday last year. Online-only retailers experienced a drop in Black Friday sales year-over-year, while brick & mortar.coms saw the most dramatic Black Friday/Cyber Monday spike.

The report advises brick-and-mortar retailers with a strong online presence to take advantage of the holiday sales events by playing up their deals along with such online convenience factors as reliable shipping, no crowds, more family time, and more sleep.

And as customers head in-store for the final weeks of the holiday season, stores should promote in-store exclusive deals to help them purchase final gifts without the stress of anxiously monitoring their package tracking info, according to the report.

3. Holiday shoppers fall into four distinct timing segments: The most cohesive way to segment and understand holiday shoppers is to look at when people do the bulk of their holiday spending. Cardlytics identified four distinct timing segments, the most traditional being “early birds,” a group that spend before Black Friday, with 82% of their holiday spending done in-store.

Other groups include “Black Friday warriors,” the segment that spends around Black Friday, with 94% done in store; and “Procrastinators,” the group that spends after Black Friday and spends the greatest percentage online, particularly at brick & mortar.coms. The final group is called “Steady Shoppers,” who spend across the season and account for 40% of all holiday spend. This is also the most generous segment, with an average holiday spend of $2,015) compared to an annual average spend of nearly $2,000.

“Customize messaging during different phases of the season to capture each of the distinct shopper segments and avoid leaving money on the table,” recommended the report.

Here are some more takeaways on how to generate more holiday revenue for 2018 from the Cardlytics report:

• Extend holiday marketing before and after Black Friday/Cyber Monday. While Black Friday and Cyber Monday are still important, they are just one piece of the holiday pie. Avoid leaving money on the table by tailoring your marketing efforts to the four holiday shopper segments. This will help capture spend from customers at each point in the holiday season and drive repeat visits from those valuable Steady Shoppers.

• Emphasize convenience factors — both online and in-store. Customers increasingly value the convenience of online channels. Traditional retailers are starting to reduce their losses with stronger online properties. These Brick & Mortar stores should continue to play up their online channels while also emphasizing convenience for their physical locations: the hands on experience and peace of mind when receiving your holiday gifts on time and in one piece.

• Take advantage of holiday customers’ tendency to shop new retailers in the final weeks, but don’t forget about driving loyalty. For gifting categories, the customers you acquire during the holidays account for a significant portion of your total customers throughout the entire year. Target your marketing broadly to drive more purchases from new customers — particularly in those final weeks of the season when they’re scrambling to wrap up their lists.

For personal purchase categories, focus your marketing efforts on increasing spend and purchases among your loyal customers. This will help build consistent shopping habits for success going into 2019.

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Payment flexibility tops customers’ holiday wish lists

BY Deena M. Amato-McCoy

Customers want to buy now, and pay later this holiday season.

This was according to “The Square Capital Consumer Shopping Survey” from payment solution Square, which revealed that 61% of consumers said they would feel more comfortable spending more this holiday season if they knew they had the ability to pay for purchases over time.

According to data, shoppers plan to spend around $1,300 this holiday season, and almost half (45%) of consumers anticipate spending more than $250 on a single item. A majority of customers (72%) prefer to shop in person for purchases over $250.

However, companies that offer the option to pay for purchases over time could earn them more holiday sales. This also gives smaller retailers the potential of winning more wallet share this holiday season, as 68% of consumers said they would be more likely to consider a small or local business if they offered financing options.

Other findings include:

• The majority of consumers (84%) indicate they prefer to support small businesses whenever they can.

• Over half (56%) will begin shopping before Thanksgiving and of those, 23% started their shopping by August of this year.

“We know that consumers prefer to support small businesses whenever they can, and we want to make sure this holiday season is no exception,” said Jacqueline Reses, head of Square Capital. “We’re excited to see what a level playing field can do for small business sales now that more sellers have access to financing options that provide flexibility to their shoppers.”

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