Nearly Half of Holiday Spending Led by Loyalty
When it comes to retail purchase decisions in the 2014 holiday shopping season, loyalty has continued to play a critical role with 66% of consumers planning to shop at their favourite retailers, 44% giving gifts purchased from brands they are loyal to and - to help stretch their budgets even further - 42% planning to use loyalty points to help fund their holiday shopping.
The study, which surveyed 1,000 American consumers, found holiday gift budgets are up over 2013 at US$770, with generosity being lowest for pets and bosses at US$10 each. With only 50% of consumers planning to stick to their budget, there's lots of opportunity for brands to influence customers and to increase share of wallet.
"Less than one-third of consumers think customer service is better during the holidays," said Rob Daniel, EVP for Bond Brand Loyalty. "This represents a great opportunity for brands to invest in unique differentiators such as VIP shopping events, gift wrapping, valet parking and loyalty member privileges."
Among the study's main findings:
- Brand loyalty plays an important role in shopping decisions:
- 66% of consumers will shop at their favourite retailers;
- 44% buy their favourite brands as gifts for others;
- 42% use loyalty points to fund their shopping;
- 41% choose retailers and brands where they can earn points.
- Holiday shopping is not necessarily a social event, as almost 60% of Americans do not view holiday shopping as a time to connect and bond with friends or family.
- How much are they spending and when?
- 68% of consumers will shop on Black Friday and/or Cyber Monday, and will spend 45% of their holiday budget during these two days;
- US$770 is the average gift budget, with men spending US$815 and women US$735; Men will spend US$78 on themselves and women US$50;
- Pets and bosses are not the beneficiaries of holiday generosity - they are at the bottom of people's holiday budgets, at US$10 each;
- 17% of consumers will re-gift this year, the highest being millennials at 27%;
- Only 50% of Americans stick to their holiday budget;
- 24% shop all year for gifts, 38% shop in the last month, and 7% in the last week.
- The impact of the online channel is significant:
- 53% of holiday shopping is done in-store, 29% shop online (desktop/laptop), and 7% shop on mobile or tablet;
- Research on purchases is being conducted almost equally in-store (57%) and online (54%);
- Advice from friends and family ties with Google searches at 44%. Research using flyers is next at 27%, followed by television at 26%, social media at 25% and magazines at 18%.
"This study highlights the importance of building meaningful engagement and experiences with digitally empowered customers", concluded Bob Macdonald, president and CEO for Bond Brand Loyalty. "Brands that deliver a differentiated and consistent shopping experience across all channels will not only come out on top this season, they will build trust, advocacy and long-lasting brand loyalty for months and years to come."