Holiday shopping trends: the lessons for 2006
The first two weeks of December is the most popular holiday shopping time, according to Kurt Salmon Associates' (KSA) recent Holiday Shopping Survey. While retailers hoped to get a jump on shoppers' dollars with early promotions, 81% of respondents said the first two weeks of December are the most popular holiday shopping days for them.
The company examined consumer shopping motivations and plans, and found a number of trends that dominate the holiday shopping season in particular, including:
- Price and budgets at forefront of shopping plans More than half (54%) of all respondents indicated price as the primary factor driving purchase decisions, up from 43% in the 2004 survey. Further, consumers are shopping on a budget this year, with almost half (48%) responding they are "setting price limits on gifts" when asked how their holiday spending will change this season compared to last year. Shoppers are going into the holiday season with a much more focused perspective on what they want to buy, how much they want to spend, and which retailers will best to meet their needs. Shoppers ages 35 to 44 are most likely to set price limits on gifts (63%) and 52% of respondents earning between US$50,000 and US$75,000 said they will set limits.
Not surprisingly, therefore, 71% of respondents said they will shop Wal-Mart for their holiday gifts this year; followed by national chain stores (58%); Target (50%); and the Internet (44%). Recognizing shoppers' desire for affordable pricing and responding to consumers' desire for a more individualised shopping experience, many retailers are offering Friends & Family coupons and targeted discounts for loyal consumers rather than featuring more public blanket discounts.
Despite consumers' best laid plans, however, KSA retail strategist Amy Klaris noted: "Early shopping appeals to the rational side of consumers. The emotional side kicks in closer to the holiday season, when budgets loosen and Americans do what they have always done: charge it and think about it later."
- Toys, games, and apparel are in this year's plans While 55% of respondents plan to purchase toys and games this year, half said they plan to purchase apparel - that's 15% more than last year's 35% response. KSA suggests there are two reasons for renewed emphasis on apparel: First, the apparel specialty stores' sophisticated offerings and better fabrications are more attractive gift items this year, and second, mass merchants and national chains are promoting unique specialty apparel and designer labels.
According to Michelle Bogan, retail strategist for KSA, "Apparel merchants across the spectrum of stores are offering something more 'special.' Target broke the first ground, now followed by Wal-Mart. National chains are also pursuing more exclusive designer relationships. Daisy Fuentes apparel is front and centre at Kohl's."
- Luxury shoppers want apparel and experiences - online Luxury shoppers are more likely than overall respondents to purchase apparel (61% vs. 50%) and almost twice as likely to purchase experience-oriented gifts, such as restaurant or spa gift certificates or family vacations, than are overall respondents (17% vs. 9%). Perhaps this is due to the "Wow" factor of experienced-based items; they enable the luxury shopper to purchase more unique items for the person who has everything.
Furthermore, luxury shoppers are increasingly shopping online: 58% indicate they will shop over the Internet for holiday gifts this year (vs. 44% of overall shopper respondents). This is of particular interest for luxury shoppers who are time-starved or do not have access to a wide selection of high end retailers in their area.
- Fancy gift cards leap into the mainstream Forty-two percent of respondents plan to purchase store gift cards this year vs. only 19% last year. Klaris said, "Gift cards, now common in the marketplace, are proving to be well-received. Merchants are redeeming gift cards through their catalogue and online businesses as well as at their brick and mortar stores."
Retailers are putting greater emphasis on the design and excitement that goes into gift card giving. According to Klaris, "Target, Best Buy, and the Gap have all created fun, unique designs and packaging for their gift cards this year. Target has 10 styles to choose from, Best Buy does great packaging in CD covers and other electronics-oriented themes, and the Gap lets you put a picture of your own in the gift card."
- Out of stock, out of mind? Consumers shopping for a specific gift indicated they'd leave the store without purchasing if their item was out-of-stock. Forty-two percent of survey respondents indicated that when shopping with a specific gift in mind, they will go to a different store entirely if the item is out of stock, and only 15% of respondents will purchase an alternate item at the same store.
According to Bogan, "Limited quantities work well in the luxury shopper segment that is conditioned to exclusive product. However, retailers can quickly irritate the consumer who has waited in line only to find the item out of stock. Angry consumers usually don't purchase at the store that annoyed them, and many times they won't come back in the future either."
- Men shop high-end to avoid mistakes Surprisingly, of those respondents who indicated they will shop at a high-end department store for the holidays (i.e. Neiman Marcus, Nordstrom, Barneys, and so on), the men are more likely than women to do so (11% of male respondents against only 7% of female respondents). Klaris said, "Gift giving is emotional, and men don't want to make a mistake in their purchasing. Upscale department stores offer more focused assortments, which means a man's chance of a gift-giving disappointment is less likely. The right gift box alone is half the insurance a man needs for a successful gift-giving season."
The survey was conducted online in the contiguous United States in four rounds, with a minimum of 1,000 completions per round. The sample consisted of adults aged at least 18 years, selected from the online segment of Synovate's Consumer Opinion Panel.