Technology enhancements and economic uncertainty will both impact this holiday season, but, compared to the 2011 season, there is a dose of optimism as people shop with a value-seeking mind-set, according to Booz & Company's 2012 Holiday Outlook Survey. While holiday retail sales will remain flat or only slightly up from last year, emerging consumer buying trends -- in-store competitive browsing, heavy online shopping, and downloaded gifts -- will have significant implications for retailers. Overall, consumers will remain cautious with spending, and they expect to find many deals. Competitive pricing intelligence will be necessary to help retailers compete more effectively, and know whether to push price comparisons to drive up price perceptions.
Booz & Company conducted their informal survey of 1600 consumers, retail store staff, and retail executives, and more than 150 interviews in stores, malls and airports during August and September 2012, to determine buying habits and potential trends for this holiday season. Here's what they found:
Consumer Mind-Set For The 2012 Holiday Season:
* Want affordability in their shopping decisions. (52 percent of consumers)
* Expect to find great deals this season. (73 percent of consumers compared with 62 percent last year).
* Think economic survival is a great reason for celebrating this year. (51 percent of consumers)
* Intend to buy at least one luxury item, and the item is likely to be one the whole family can enjoy. (53 percent of consumers -- up from 41 percent last year),
* Consumers are looking forward to the holiday more than last year. (53 percent reported that they expect to host multiple gatherings, compared with 45 percent last year).
Consumer Buying-Plans For The 2012 Holiday Season:
* Tablets and smartphones top the list for those who want electronics this year, even though 62 percent of consumers do not have consumer electronics items at the top of their personal wish lists.
* Downloadable gifts will become a distinct and rapidly-growing category this year; 45 percent of consumers expect to give at least one downloadable gift such as an e-book, a music download or a movie.
* Apparel looks set to grow at a healthy rate this season (42 percent of consumers intend to buy apparel items as gifts, up from 37 percent last year).
* More than 80 million shoppers plan to purchase gift cards this season, about 4 percent more than last year.
What These Consumer Buying Behaviors Mean For Retail Strategy:
Multichannel shopping will be a core part of how consumers shop; most customers will be browsing in-stores and on their smartphones simultaneously i.e. browsing in-store before buying online (showrooming) -- described by 40 percent of surveyed consumers as their new shopping strategy.
To counter this, bricks-and-mortar retailers are advised to try to drive more than their fair share of ‘showcasing volume’ to their websites rather than to Amazon.com or another competitor.
Further winning strategy will be to develop seamless digital and physical experiences; use barcode-driven promotions to convert sales; consider free shipping (shipping was a major online sales driver last year); use loyalty points to drive conversion; and prepare online and mobile technology platforms for high volumes, as crashing apps will discourage consumers. In order to have the best, most-timely information on which to base pricing decisions, retailers should use competitive pricing intelligence to know what's going on in real-time with their competitors' pricing and assortment.
Consumers are becoming more innovative and cautious with regard to spending. They will shop this year with a value-seeking mind-set, and with different tactics for finding deals and achieving quality for the money they spend. Retailers who recognize these shifts in behavior, use competitive retail intelligence technology, and tailor their holiday strategies to meet consumers’ new needs are the ones most likely to succeed this holiday season.