Shopping lists and cash in hand, consumers are ready to shop this weekend
Last night, Saks Fifth Avenue wowed the audience with its Fifth Avenue holiday windows and bubble-snowflake 3-D exterior. As retailers around the country unveil their holiday decorations, this signals just one thing to me: Thanksgiving must be almost here. All kidding aside, the (serious) pressure is on for retailers to make their Q4 goals. As we saw in the eHoliday study results last month, half of retailers surveyed got their holiday marketing and promotion machines rolling by Halloween this year, and another third planned to do so by last week.
While the economic news this year has been on something of a roller coaster, retailers have good reason to “believe” for the upcoming season: comScore reported that online retail sales in Q3 increased 13% over the same period a year earlier, and Forrester is projecting a 15% year-over-year increase for online holiday sales. While I tend to focus primarily on online retail, the results of both the October and November Consumer Intentions & Actions Survey from BIGresearch underscore again that consumers are really cross-channel shoppers, primed to take advantage of retailers’ holiday deals across the Web, stores, smartphones and tablet devices – or where and when it suits them best.
Consumers are waiting for holiday marketing (read: offers) to kick in. Just under half of holiday shoppers said they haven’t started their shopping yet, in any channel. Not surprisingly, more women than men have started their shopping. Adults aged 25 to 34 years old appear the most organized among us, with 58 percent having already started their shopping. This year, shoppers are actively checking for deals before shopping this holiday weekend and, of course, on Cyber Monday.
Cash is king. More than four in 10 consumers say their debit cards will be their primary payment method for holiday purchases this year, representing a ten-year high for this payment type. Among all consumers, one-quarter expect to use cash most often; for online shoppers, that’s a tad lower (21.6%). For online retailers, the mandate is clear: offer and clearly market to customers multiple payment options, including debit cards and alternative payment options such as PayPal. The September 2010 Shop.org / Javelin Strategy & Research “Merchant Perspectives on Online Alternative Payments” study found that, at the time, 54% of consumers wanted to use alternative payment methods, but only one-third of retailers surveyed actually offered these, possibly stunting conversion and increasing cart abandonment.
Age foretells likelihood to spend more this year... Across all channels, approximately half of U.S. consumers plan to keep holiday shopping budgets largely in step with last year. The good news: 19% of online shoppers plan to spend more this year than last for the holiday shopping season, a slightly higher percentage than all holiday shoppers. Also likely to spend more this year are young adults: well over one-third of 18 to 24 year old consumers will spend more this year than last, along with 28 percent of 25 to 34 year olds who plan to spend more. By contrast, just 10% of 45 to 55 year olds expect to increase their budgets.
…As well as which gifts consumers are likely to buy. Among U.S. consumers aged 18 to 34, clothing and accessories top the list for two-thirds, while closer to half of consumers age 45 and older plan to buy this category. Three out of 5 consumers aged 18 to 44 will hone in on books and media (including CDs, DVDs, videos, and video games) – but that number drops significantly for older consumers. Consumer electronics top the list for four out of 10 shoppers ages 18 to 44.
Cash is king (again). Not only do U.S. holiday shoppers want to pay via cash-based options, two thirds of online consumers also want to receive cash themselves – that is, gift cards. Knowing this, well over half (57.3%) of all holiday shoppers this year have gift cards on their holiday shopping lists (and that’s closer to two-thirds for online shoppers). Just as we see gift cards strategically placed in stores at cash registers, retailers shouldn’t miss the chance to cross-sell their online customers with gift cards before or during the check out process – particularly if online gift cards offer personalization and/or other convenience features (e.g. adding a video greeting, instant delivery via Facebook wall, etc.) that a physical card doesn’t offer. And just think of the post-holiday marketing opportunities that all those gift cards out there afford retailers after December 25 has come and gone.