Holiday spend to increase 4% in 2017
A robust stock market and high levels of consumer confidence have coalesced to double the increase in anticipated 2017 holiday spending over 2016.
According to the 11,625 shoppers who participated in the 2017 Brand Keys holiday shopping survey, consumers are making decisions and plan to shop even earlier than in previous years.
Generally good economic news has consumers signaling a 4% increase in their holiday spend this year to an average of $936 per household, said Robert Passikoff, founder and president of Brand Keys, the New York City-based brand loyalty and customer engagement research consultancy that conducts the annual survey. "Retailers have recognized shifts in the consumer shopping paradigm, and will again try to capitalize on them by kicking off Black Friday-like sales even earlier than in previous years."
Despite larger spends, consumers have adopted new shopping patterns when it comes to the holidays and calendar events, particularly the winter holidays.
This is an incredibly important shift, said Passikoff. It means that a season that represents nearly 25% of the retail industrys total sales, is spread out conservatively speaking over a four month-plus period even though the Winter Holidays have traditionally been defined as the 61 days of November and December. It may work that way on the calendar, but not in successful retailers marketing strategies!
Consumers have begun holiday shopping earlier and earlier. Last year 41% of consumers reported shopping before Black Friday. This year that number has increased significantly, with just over half the consumers (51%) reporting they had already shopped or intended to do so before Black Friday, a shopping period known as Black November. Super Saturday has overtaken Black Friday in actual sales, noted Passikoff. So while Black Friday represents a retail raison dêtre, it is fast becoming a relic of twentieth century retailing.
As a result, a smaller percentage of consumers (20%, down 5% YOY) have indicated they are actually shopping on Black Friday. Twenty-nine percent (29%) of respondents indicated that they will holiday shop in December, the largest specific shopping period identified by consumers in the 2017 Brand Keys survey.
Deals notwithstanding, shopping on Black Friday and in December itself has become more of a traditional, seasonal thing families can do together, noted Passikoff. Its a habituated behavior that grabs consumers when Jack Frost nips at their noses and Santa Claus is coming to town, despite the fact that 71% of their shipping has already been completed!
Virtually all consumers interviewed (98%) are buying online again this year. Its no secret that brick-and-mortar retailers have had more difficult times engaging customers over the past five years, said Passikoff. Theyve been trying to forestall the online assault with better reward programs and low-lower-lowest pricing schemes, but consumers are on to that. Online has become the default venue for browsing, promotions, price checking and, ultimately, buying holiday gifts. Consumers again intend to use multiple venues to shop this year:
Consumers indicated the following categories where money is going to be spent. Changes from last year appear in parentheses:
- Clothing and Accessories 85% (+5%)
- Personal Care Products/Spa 55% (+5%)
- Electronics/Phones/Computer 48% (- 2%)
- Kitchen/Cookware 45% (+3%)
- Toys 30% (+10%)
- Food and Wine 26% (+6%)
- Jewelry 25% (+5%)
- Books 15% (+ 5%)
- Sporting Goods 10% (- 2%)
- Home Décor 10% (+ 5%)
- Tools 10% (-----)
Just as in holiday seasons past, value is paramount for all platforms. Consumer expectations regarding outreach and convenience are up again. Expectations for the shopping experience for brick-and-mortar retail are also up again, Passikoff said. Retailers that can provide a sense of consumer comfort, confidence and shopping ease will see better bottom lines. Free shipping and returns, order online-pickup-in-store or ship-to-store options will have holiday shoppers attention again this year.