By Marshal Cohen, Chief Industry Analyst
It’s shaping up to be a healthy but heavily promotional holiday, which means that retail revenue growth will be harder to come by. Retailers are trying to drive store momentum earlier and they will need to be very savvy when it comes to managing their promotions.
They also need to step back and determine how to use the Internet as a tool and not as a replacement for the in-store experience. It’s necessary to have consumers walk through the doors, and the advantages of store displays and merchandising are incomparable. Impulse shopping is a clear example of the influence this experience has on consumers. The percentage of impulse shopping purchases is nearly twice as high for in-store versus online. Retailers need traffic in their stores, and they need to master how online can work in harmony with in-store.
Top Retail Expectations
Here are my top retail expectations for this holiday season:
- “Black November” and a Front-loaded Holiday – With holiday promotions starting earlier this year, consumers will aim to take advantage of savings before and around Black Friday.
- It’s All About the Deal – Consumers don’t mind comparison shopping and will look to score big on deals and value-driven products, with special sale price (59%) and overall value (55%) serving as their top purchase drivers.*
- What’s New? – No fresh items will lead to lackluster excitement around holiday 2014, similar to holiday 2013.
- Keep an Eye on Online and E-Commerce – Online is expected to get aggressive with pricing early this holiday season, as it moves to the number one channel where consumers intend to shop. With nearly 60 percent of consumers stating they will make online purchases, this channel is projected to account for 50 percent of holiday shopping among online shoppers. Its holiday popularity, though only slightly greater among consumers aged 25-34, is quite balanced across all ages, further demonstrating its significant appeal.*
- Family, Food, Football, and… – Thanksgiving Day shopping is expected to gain even more momentum as more stores open and more consumers get in on the action.
- Cyber Monday Changes Position – Cyber Monday is expected to move up from after Thanksgiving to before.
- Opportunities for Key Categories – Consumers plan to spend more on clothing and accessories, footwear, toys, fragrance, and home décor.
- Gift Cards for Gift-Giving – With fewer consumers on the fence about gift card or gift certificate purchase intentions*, these will likely be big winners again this holiday as consumers struggle to find the perfect gift and items they have not previously purchased.
- Paper or Plastic? – The credit card breach last holiday season is all but forgotten by consumers as credit spending for this holiday is expected to grow. The percentage of consumers who plan to do more of their shopping with credit is up 10% compared to last season.*
- Do Your Homework – More online research is expected for this holiday season, as consumers look to do their homework to find the right item at the right place and price. Sixty-one percent of consumers plan to do some degree of pre-shopping research, with two-thirds of those citing online research as their method of choice to learn more about products.*
- The Economy’s Impact – Consumers are more optimistic this holiday season, with less reporting that the economy will have an impact on their holiday spending plans.*
- Revenue Comes at a Price – The majority of consumers plan to spend about the same as last year.* This smells like growth, but at a price for retailers.
*Source: The NPD Group, Inc. / Holiday Purchase Intentions Survey 201
About The NPD Group, Inc.
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