Why digital dominates the retail sales story this holiday season
It’s that time of year again — the make-or-break, holiday shopping season, when retailers generate a disproportionate percentage of their annual sales.
Along with the holiday season comes the requisite slew of spending surveys, predictions, and trend forecasts.
According to the National Retail Federation, shoppers will be in a more generous and festive mood this holiday than they’ve been in over a decade: Consumers will spend an estimated $805.65 on food, decorations, gifts and more, the highest amount in the survey’s 14-year history, according to a poll of 7,276 shoppers this month conducted for the NRF by Prosper Insights & Analytics.
The seminal spending theme this year reflects what’s been reshaping the retail industry this decade: digitally driven commerce and convenience.
A mobile tipping point
With shoppers increasingly tethered to their smartphones, mobile shopping will reach unprecedented spending levels this holiday, the survey indicates: 21.4% of smartphone owners will use their device to buy holiday merchandise this year, the highest figure forecasted since the NRF introduced the question in 2011.
“The biggest growth will come in smartphone retail m-commerce sales as consumers become more comfortable buying on their phones — which, on average, have larger screens than those released just a few years ago,” according to eMarketer’s holiday report.
And nearly half of holiday shopping, (46%) — from browsing to buying — will occur online, up from 44% last year, the survey revealed.
A click-and-mortar Christmas
Among consumers who plan to shop online, 46.5% said they will make use of retailers’ buy online, pick up in store or ship-to-store, options.
That comes as little surprise, as more and more consumers expect a seamless shopping journey. According to Forrester Research, 70% of U.S. online consumers said they partake in buy online, pickup in-store options to some degree, Retailing Today reported.
For retailers, offering consumers click-and-mortar convenience can spur additional purchases, especially during the holiday season, when shoppers are already in buying mode. According to research from order management provider Shopatron, 40% of shoppers who buy online end up spending on extra, unplanned purchases once they pick up their order in store, according to Retailing Today.
‘Merry Christmas to me’: More self-gifting predicted
Survey results revealed that 55.8% of holiday shoppers plan to buy for themselves this season, shelling out an average of $131.59, up from $126.37 in 2014.
“People were more judicious last year about purchasing, so there’s some pent up demand that’ll be released during the holiday season,” Kit Yarrow, consumer psychologist and author of Decoding The New Consumer Mind, told Retail Dive.
Shoppers are also increasingly buying off-season purchases, she said. That stands to reason, as the Internet is a portal to the store that never closes, with an endless aisle of merchandise.
“Consumers literally have all the selection in the world and therefore enjoy buying when the need or craving hits them,” she said. “So for many, they plan purchases for themselves around the time of the year when they feel they’ll have the best price and selection, and that’s the holiday season,” Yarrow said. “Other reasons? They entertain more and want to fluff out their homes, plus they party more and want to prepare for a social time of the year.”
Gift cards remain top gift pick
For almost a decade now, gift cards have topped shoppers’ wish lists. Nearly six in 10 (58.8%) consumers said they’d like a gift card this holiday, marking the ninth year in a row that gift cards lead the list of most requested gift items.
Digital buying options have only enhanced gift cards’ convenience appeal. “Consumers not only continue to purchase gift cards at their favorite retailers, grocery stores, and other third-party locations, but now they’re also buying physical and digital cards online or on their phones,” according to an industry trend report from gift card distributor Blackhawk Network.
And this season, shoppers can even buy their loved ones company stock from brands such as Apple, Coca Cola and Facebook in the form of a gift card, the Wall Street Journal reported.