While the holidays may still be a month away, the holiday shopping season is already well underway for millions of Americans. Few weeks back, an article on CNBC reported that, tons of customers started holiday shopping before Labour Day. According to a recent survey by CreditCards.com over the Labor Day weekend, about 32 million Americans said that they had already begun their holiday shopping. And about 23% of holiday shoppers expect to finish shopping by the end of November. Not surprising, given how ‘Holiday creep’ has been pushing Christmas displays and promotions into stores earlier and earlier every year.
While all those numbers sound very exciting, it is critical for retailers to factors in customer expectations as well when they plan for the holiday season. Consumers today expect their favourite brands to deliver instant information and services, based on their contextual needs, across all channels of interaction (both offline and online). So what can retailers do to make sure they’re on top of the latest consumer holiday shopping trends? Fret not, we’ve got you covered.
In this blog we will take a look at some seasonal highlights from last year and identify a few key customer shopping trends for the upcoming holiday season. We will also talk about a few tips that will help retailers with their game plan for the year’s busiest retail season.
Key findings from 2014 holiday shopping season
1.Mobile took centre stage
2014 saw holiday shoppers increasingly tuned in to mobile for everything right from research to purchase. In fact, traffic on mobile exceeded that on desktop for the first time on 2014 Thanksgiving, reaching 52.1%. This trend then continued throughout the following weekends, all the way till Christmas. All in all, with an increase of 25.5% year-on-year, mobile accounted for 45% of online traffic during the 2014 holiday season.
However, mobile transactions did not quite mirror the mobile traffic levels. According to a report by Custora, 2014 saw mobile account for about 26% of all online transactions. Looking at the last year’s usage, there’s little doubt that smartphones have become almost as addictive as eggnog.
2. Retail stores beat ecommerce giants in total holiday sales
A study by the National Retail Federation shows that shoppers spent more both in store and online during the 2014 holiday season (which includes November and December sales). And while, the overall online spend amounted to just one-sixth of in-store spend, its increasing faster year-over year: total holiday retail sales in 2014 increased by 4% to $616.1 billion, while online and e-commerce sales, grew by 6.8 percent to $101.9 billion.
3. Shoppers came early and stayed late for holiday deals
Last year, holiday shopping buzz started early (like, Halloween early). According to a report by RetailMeNot, a steady number of early-bird shoppers were active in the days before Thanksgiving 2014. Holiday spending kicked off on November 1, with consumer interest in holiday deals trending up more than 20 percent compared to the October search average.
However, NRF recently reported that the split between the number of consumers who shop early and late into the season is relatively even. The average holiday shopper was reported to have completed 53% of their shopping as of Dec. 10, according to the Holiday Consumer Spending Survey, conducted by Prosper Insights & Analytics.
Adding on to that, approximately 47% of shoppers waited until later in December to complete their holiday shopping, for a variety of reasons, including procrastination. And 23% said they were waiting for the best deals to surface.
Three consumer shopping trends to watch out for in the 2015 holiday season
1. Consumers to rush to stores for an enhanced shopping experience
Almost 60% of consumers are expected to shop in-store this holiday season because they want to see, touch, and try the merchandise. In fact, this trend has already pushed some previously online-only retailers to establish a physical store presence.
Adding on to that, new advancements in in-store technology such as iBeacon are fast blurring the lines between online and physical shopping. Retailers can now use these to their advantage by offering perks right from ‘buy online, pickup in-store’ capabilities, to contextual messages on product information, in-store navigation, and in-store mobile payments to in-store shoppers. All in all, 2015 will see retailers leverage these technologies more than ever before, in their efforts to drive more targeted messages and promotions to their customers.
2. Personalized offers and services will do better than generic offers
While mobile is the primary device for a significant number of consumers, satisfaction with the mobile retail experience is found to be relatively low. According to a recent research by Adobe, only 45 percent of shoppers are satisfied with retail applications. This points towards the need for true personalization and location-based services in retail. With about 71 percent of consumers ranking convenience as the most important aspect of a retail mobile experience, Adobe believes that a well-executed personalized experience can be an important way to drive convenience.
Adding on to that, many U.S. retailers entering the holiday season are also vowing to control discounting that has wreaked havoc on their results in the past. For example, high-end retailer Nordstrom said it planned 20 percent fewer clearance days this year than a couple of years ago, as it will be focusing on service and “differentiated” products. Similarly, teen apparel retailers such as Abercrombie and Fitch and Aeropostale also said that they will be concentrating on offering more items at full price and minimizing promotions. All in all experts predict that, retailers who can distinguish themselves with distinct or personalized products and services have a better chance of boosting margins than broad discounters.
3. Brand loyalty is up for grabs
At its best, brand loyalty is a reward that business owners have to win over and over again, with each customer transaction, and that goes for holiday shoppers too. Last year, 41 percent of holiday shoppers purchased from a new retailer; a number that was up significantly over the previous year. Therefore, it is highly critical for retailers to focus their efforts on getting their product, price and customer service right, because that’s what customer retention is built on in 2015.
Tips for the upcoming holiday season
1. Keep it personal. Keep it consistent
According to a recent survey by Accenture, nearly 60% of U.S consumers agreed that they want a more personalized shopping experience with real-time promotions and offers. And this number continues to rise. So much so that, it has now become increasingly critical for retailers and brands be able to meet today’s hyper-connected consumers on their terms, across all channels of interaction, by serving their ever changing needs, preferences and in-store behaviour. And no technology does it better than iBeacon. These devices with their proximity detection capabilities can help retailers with everything, right from activating purchases to pushing shoppers forward the buying path.
2. Leverage shopper and store analytics
Stores that enable data collection and analytics will be able to gather a goldmine of consumer information during the holiday shopping season—ranging from demographics to peak shopping times and store traffic flow feedback. Applying these learnings to year-round shopping experiences can produce significant conversion opportunities. This is exactly where beacons come into the picture.
For example, heat maps, another beacon-enabled feature, can help retailers identify customer movements within the store, take note of the hotspots and bottlenecks in store and use that data to make informed product placement decisions. Beacons can also help retailers gain a good understanding of which types of customers responded to which products and how well they responded to placement of items within a physical or online store.
Adding on to that these proximity detection devices also help retailers make more informed marketing decisions with stats such as whether they tend to attract repeat or new customers, and whether customers responded to certain types of promotions—and from which channels.
If you are just getting started with your beacon pilot or are already in the process of planning one, our recent webinar on ‘Your Guide to Planning a Successful Beacon Pilot’ will help you understand the nuances of setting up a beacon pilot from scratch and set you up for success.
Are there any other tips or insights that you think will help retailers set up their business for success this holiday season? Let us know in the comments below.
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