Holiday Shopping

Holiday shopping behaviors: Black Friday is losing some of its luster.

Phillip Nones Marketing, Marketing Communications, Sales , , , , , , , , , , , ,

It’s the beginning of October – which means that the holiday shopping season will soon be upon us.

… If it isn’t already, based on the holiday displays we’re already seeing cropping up at some major retail chain stores.

Of course, U.S. retailing firms have been gearing up for the season for months now, in terms of building merchandise inventories and so forth. But what sort of consumer shopping dynamics will they be facing this year?

According to new research published by Euclid, Inc. in its 2017 Evolution of Retail report which covers holiday physical and digital retail trends, Cyber Monday has now overtaken all of the other holiday-season shopping days in terms of consumer excitement.

That finding is based on a survey of ~1,500 U.S. consumers age 18 and older. While majorities of respondents report that they are excited about each of the three biggest revenue days of the holidays, for the first time ever Cyber Monday heads the list in terms of consumer interest and excitement:

  • Cyber Monday: ~72% of consumers report being excited about this shopping day
  • Black Friday: ~62%
  • Day after Christmas: ~55%

Clearly, online shopping continues to build momentum year over year. But the Euclid research also reveals that physical stores continue to have a major role in the “buying journey.”  Even among consumers in the 18-34 age group, three out of four respondents report that they visit physical stores on a regular basis to see products “in the flesh” – even if they purchase them online later.

Not surprisingly, “price” remain the biggest driver in consumer shopping behaviors during the holiday season, but convenience is another factor as well. It isn’t simply a store’s location that matters, but also how quickly shoppers can get in and out of the store that affects their views of “convenience.”

Interestingly, when comparing just in-store shopping plans, more respondents in the Euclid survey expect to be shopping on the day after Christmas (63%) than on Black Friday (60%) this year.

Perhaps the decisions by some big retailers to curtail store hours on that traditional first day of the holiday shopping season are being driven by more than simply altruism …

The complete Euclid report for 2017 can be downloaded here.

Holiday online shopping dynamics: The 2016 season’s results are already coming in.

Phillip Nones Advertising, Business, Marketing, Sales, Social Commentary , , , , , , , , ,

ohsOne of the neat aspects of online shopping is the ability to learn about consumer behaviors almost in real-time. No waiting around for published reports that are released months after the fact.

Moreover, we can know quite a bit more than simply gross sales figures, including traffic stats.

In fact, we already have extensive information available about consumer online shopping activities in the 2016 holiday season, thanks to data released by firms such as Connexity’s Hitwise division, which measures consumer behaviors across desktop, tablet and smartphone devices.

From Hitwise, we know that its Top 500 retail websites received more than 335 million visits on Thanksgiving Day alone. That averages out to just under 14 million visits per hour … but the time period of 8 pm to 11 pm had more than 50% greater traffic compared to the hourly average for the day.

Amazon.com was among the retailers receiving extensive traffic volume from 8 pm onward – in its case ~25% of its total traffic on Thanksgiving came in those final four hours of the day.

One supposes that after the “big meal,” the “big game” and the “big cleanup,” consumers decided cap off the day by plunking down at their computers or smartphones for some heavy-duty online shopping.

Hitwise found that Black Friday online shopping dynamics were different, with the top retail sites being busiest in the late morning hours, when site visits were around half again larger than Black Friday’s daily hourly average.

As for Cyber Monday, Hitwise found that consumer online shopping dynamics weren’t very much different from any other typical Monday – except that the overall volume (nearly 330 million visits) was substantially higher than the typical Monday volume of ~200 million visits. That, and a slightly greater-than-average share of online shopping happening in the early morning hours of 6, 7 and 8 am.

hwlAs for the persistent belief that Cyber Monday has more people shopping online during their time in the office, Hitwise is not seeing that phenomenon any longer.

Again, not very surprising in that more consumers have 24/7 access to digital devices in 2016 than they did ten or even just five years ago.

The Hitwise report for 2016 includes extensive findings not just on hourly shopping patterns, but also on product searches and key traffic drivers for the major online shopping websites. More data can be found on the Connexity/Hitwise website.

Will consumer spending bring holiday cheer to businesses in 2016?

Phillip Nones Advertising, Business, Marketing, Marketing Communications, Marketing Research, Sales, Social Commentary , , , , , , , , ,

hdsThe holiday season isn’t yet upon us, and already there are a plethora of prognostications being made as to how holiday sales will stack up compared to prior years.

These predictions come courtesy of numerous forecasters including the National Retail Foundation, Deloitte, Kantar Media, eMarketer, the International Council of Shopping Centers, Market Track and others.

So what’s in store? On balance, forecasters predict that holiday sales in the United States will post an increase of approximately 3.5%.  That’s higher than the 10-year rolling average of 2.5% but down a tick from last year’s 3.7% increase.

Still, at more than $655 billion in total sales, holiday spending continues to be the biggest single driver of the U.S. consumer market.

Hardly surprising, e-commerce sales are expected to continue their double-digit growth over last year’s holiday season, with various predictions ranging from 14% to 17% growth in this sector. Not only are consumers attracted by the convenience of online shopping, many of them believe they can find products at the cheapest price via online sources rather than taking a trip to the shopping mall.

Another factor that drives at least some people to shop on their online devices is their aversion to the crush of holiday shopping at the stores. A McKinsey study has found that nearly one-third of U.S. consumers basically hate Black Friday (the day after Thanksgiving), and make it a point to stay as far away from it as possible.

But there’s one drawback for businesses about online holiday shopper dynamics, however:  Those consumers tend to be less brand loyal than is typical. RJ Metrics calculates that the typical e-commerce business acquires nearly 25% of its new customers during just the months of November and December.  Tempering that healthy statistic is the lifetime value of those consumers, which RJ Metric has determined is about 13% lower than the lifetime value of customers acquired at other times of the year.

You might be wondering what amount of money the typical U.S. consumer will spend on his or her holiday shopping this year. Wait for it:  The 2015 per capita amount is expected to be $935.

That figure may seem quite rich … but it’s actually a little bit lower than 2015’s average spend-per-person, which at $953 happens to have been the all-time high ever recorded.

Does the new $935 forecast signify a reversal of a trend … or is it just a pause in an otherwise ever-increasing amount of money that consumers are willing to plunk down as part of their celebration of the holiday season?

Check back in about a year and we should have an answer.

Will there be holiday cheer in retail sales this season?

Phillip Nones Business, Economics, Uncategorized , , , , , , , , , , , ,

Holiday Shopping ForecastHere’s a statistic that surprises no one, probably:  As of November 1st, more than one in five U.S. consumers had already begun their holiday season shopping.

Considering that many merchants begin pushing online and in-store holiday sales in October, it’s hardly any wonder.

In fact, marketing firm IgnitionOne is predicting that American consumers will spend 11% more during Thanksgiving weekend than they did last year.

Some of the increase is undoubtedly due to the calendar; Thanksgiving weekend is nearly a full week later than it was in 2012.

And other forecasting data don’t presage a big jump in holiday sales this year.

According to the National Retail Federation, sales are expected to be “not too hot … not too cold” – up a tad from 2012 but not at the growth level witnessed in 2010 and 2011:

  • 2009:  0.5% sales increase over previous year
  • 2010:  5.3% increase
  • 2011:  5.1% increase
  • 2012:  3.5% increase
  • 2013 (forecast):  3.9% increase to $602 billion

Clues to the reasons behind the middling sales growth forecast can be found in Nielsen’s Holiday Spending Forecast report, in which American consumers describe their financial circumstances in these terms:

  • Two-thirds still feel like they’re in a recession.
  • Half are limited to spending funds on only the basics.
  • One in five has no spare cash at all.

How this translates to the amount of dollars consumers expect to spend on their holiday shopping breaks down as follows:

  • ~44% will spend less than $250 this season
  • ~30% will spend between $250 and $500
  • ~20% will spend between $500 and $1,000
  • ~6% will spend more than $1,000

As in years past, the most popular gift item promises to be … gift cards.  Technology products, toys, food and apparel round out the “top five” holiday gifts.  This is little changed from last year.

And here’s one other stat that retail establishments must be looking at:  Mobile commerce sales grew by ~16% during the holiday season between 2011 and 2012, and ~18% of shoppers checked out deals on their mobile devices.

Those percentages are bound to increase this year.

More findings from Nielsen’s 2013 Holiday Spending Forecast study can be found here.

Even with endless gift choices available online … gift cards reign supreme.

Phillip Nones Uncategorized , , , , , , , ,

Gift cards are bigger than ever in holiday season 2011
Gift cards are forecast to be bigger than ever in holiday season 2011.
The growth of online shopping has been well-documented, and this holiday season is no exception.

And why not? Online shopping so convenient and cost-effective.

Shopping online gives people the flexibility to shop from wherever they are, without having to spend money on transportation. They can shop at all hours of the day or night. Merchandise price comparisons between sites are easy to do. And in many cases, consumers won’t have to pay any sales taxes or shipping charges.

Tack on free gift notes and even free gift-wrapping at many sites, and you have to wonder why anyone would bother to shop for gifts any other way.

In an environment where shopping has become so easy, convenient and cost-effective – and with basically endless merchandise choices – you might figure that holiday shoppers would be finding and buying “just the right gift” for family members or friends.

And so what’s “just the right gift”? Gift cards – to the tune of $28 billion, according to the National Retail Federation’s Holiday Consumer Intentions & Actions Survey, which queried more than 8,500 consumers in early November.

It’s not just that gift cards are the easiest possible gift to buy, with basicaly zero thought going into the purchase. It turns out they’re also the most requested holiday gift on people’s wish lists. (Prior NRF surveys going back five years have found that to be the case, too.)

The 2011 holiday intentions survey found that gift cards are on track to eclipse last year’s performance:

More people plan to purchase gift cards this season (~80% versus ~77% in 2010)

 The average gift card amount will be higher (~$43 vs. ~$41)

The average total spend on all gift cards is predicted to be ~$155 per purchaser. The survey also found that men tend to spend more on gift cards than women.

Speaking for myself, I’m not at all surprised by that last finding. I think I fit the profile pretty well: After “one too many” gift returns made by my wife and daughters, I resorted to gift cards a few years ago and have never looked back.

Holiday Consumer Spending Forecast Tracks the Economy: Just Muddling Along

Phillip Nones Uncategorized , , , , , , , , ,

The holiday shopping forecast for 2011 is pretty blah.If anyone was hoping for good news at the end of the year, it’s not coming in the form of increased holiday spending by consumers.

The National Retail Federation’s annual Holiday Consumer Intentions & Actions Survey concludes that holiday shoppers plan to spend an average of just over $700 on holiday gifts and seasonal merchandise.

That’s down slightly from last year’s holiday spending plans, which were closer to $720.

The chart below shows how average holiday spending has mirrored general economic conditions in the country over the past eight years:

 2004: ~$700
 2005: ~$735
 2006: ~$751
 2007: ~$755
 2008: ~$694
 2009: ~$681
 2010: ~$719
 2011: ~$704

After having grown to more than $750 in the 2006/07 period, a significant drop-off was seen in 2008 and 2009. With the recession bottoming out, this was followed by a tidy little jump in holiday spending 2010.

But just like the rest of the economic picture, things have stalled since then – or pulled slightly back.

In another recent survey, Ipsos Public Affairs has found that women are more likely than men to be planning to cut back on their holiday shopping outlays … as are people over age 35 compared to younger adults.

With consumers continuing to watch their wallets, it’s no surprise that many are taking advantage of savings opportunities. In the Ipsos survey, half of all respondents reported that they had used magazine coupons within the previous 30 days, and there was significant usage of online savings vehicles as well:

 Magazine or newspaper coupons: ~50% have used in the past 30 days
 Loyalty cards or in-store promos: ~47% have used
 Printable coupons from the web: ~28% have used
 Online “daily deal” coupons: ~27% have used
 Online coupon codes: ~25% have used

Despite the slightly lower figures for intended holiday spending in 2011, the National Retail Federation’s survey finds that nearly 40% of consumers will have already started their holiday shopping in October. A similar 40% plan to start shopping in November, while the remaining 20% won’t begin their shopping activities until September.

[A slim ~4% represent those procrastinators who don’t plan to start any of their shopping until the last two weeks of December; I think most of us all know at least one person who falls into this rarified category.]

And if you’re wondering how the average shopper plans to allocate his or her holiday spending this year, it comes as little surprise that shopping for gifts for children and other family members represents well over half of the value of planned purchases:

 Gifts for children, parents and other family members: ~$403
 Gifts for friends, co-workers and others: ~$112
 Holiday-related food items: ~$97
 Holiday decorations: ~$47
 Greeting cards: ~$27
 Flowers: ~$18

What about you? Do your holiday shopping plans for 2011 mirror what the NRF survey found?

The “Skinny” on 2010 Holiday Spending

Phillip Nones Uncategorized , , , , , , , , , , , , , , , , , , , , , , , , ,

Consumer Holiday Spending
Holiday spending on the rise? Yes, but ...
The “early returns” from this year’s Black Friday retail sales are quite encouraging. Online retail sales are experiencing an even bigger bump in activity. The question is, do these positive early results foreshadow a strong holiday season overall?

Each year, Gallup attempts to answer that question in advance by conducting a poll every November in which it asks U.S. consumers for a prediction of the total amount of money they plan to spend on holiday gifts. This year’s poll findings were published this past week.

And the results? The good news from the consumer economy’s standpoint is that the average personal spending expectation has risen to $714 for 2010, which is ~12% higher than last year’s $638.

The not-so-good news is that we’re still in the doldrums when measured against most of the previous decade. In fact, only in the years of 2009, 2008 and 2002 has expected personal spending been lower than it is this year.

If we take an average of the ten years covering 2000-2009, the expected personal spending found by Gallup’s survey is $747, which means that 2010’s dollar amount doesn’t even come up to the average of the past decade.

Here’s another interesting finding from the survey: Evidently, the increase in expected holiday spending compared to last year is being driven by only a small percentage of consumers. Half of the Gallup respondents reported they would be spending “about the same” this year, whereas one third reported they would actually be spending less.

The remainder – fewer than 15% — reported they would be spending more.

And all of that activity on the Internet? We can be sure a goodly amount of it is driven by the desire to find the very best price available. And to prove that out, the latest online holiday shopping report survey from rich media firm Unicast finds that more than half of consumers are using the Web to research and compare deals between online stores and retail outlets.

The bottom line on all this: It’s a mixed picture with a slight lean on the scale in favor of optimism. Which is a darn sight more positive than what we saw in 2008 and 2009.

Happy Chris-kwanz-ukah, everyone.