Marketing Matters
Consumers May Spend Less This Holiday Season
The holiday shopping season is upon us, and expectations are modest at best.
Available research about holiday spending holds lessons for all marketers because it gives insight into broader consumer behavior.
Look for a 2.8 percent increase in total holiday sales, says the National Retail Federation’s 2011 Holiday Consumer Intentions and Actions Survey – in part because of more consumers in the marketplace.
However, it also projects the average spending on gifts and seasonal merchandise to decline to $704 from last year’s $720.
Research firm NDP Group has data showing that only 9 percent of consumers plan to spend more this holiday season. Two-thirds said they would hold the line.
Accenture’s holiday forecast said 71 percent of consumers plan to be “careful” or “controlled” and 88 percent said they will spend no more than last year.
“Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season,” said Jack Kleinhenz, the retail federation’s chief economist.
“Mid- to upper-income shoppers will lead the falloff, and they have been supporting growth. But pain is now moving up market” said Frank Badillo, senior economist for Kantar, a worldwide business consultancy.
Who will be the winners and losers?
The National Retail Federation forecasts that department stores with unique private label offerings will see a 2.4 percent increase in traffic. It also projects more customers for clothing and accessory stores, drugstores, supermarkets, discount stores and craft and fabric stores.
Holiday volume should mean one-half million temporary jobs.
According to an Ipsos Public Affairs poll, women more than men (49 percent to 39 percent) plan to cut back on spending.
The 18- to 34-year-old crowd is likely to spend more than adults ages 35-plus, though, the same poll showed.
Retailers with a strong mobile presence will win. PayPal predicts 46 percent of U.S. smartphone and tablet computer owners will make a holiday purchase with their mobile devices.
According to ad network Mojiva’s Mobile Audience Guide, a majority of mobile users will seek product information, search for coupons, read product reviews or seek store information via their devices this season. Top purchases on mobile devices will be toys and games (52 percent), electronics, music and movies (51 percent) and clothing (40 percent), Mojiva says.
All the while, folks still want bargains. Whether online or in stores, coupons and savings via loyalty cards and in-store promotions are important to most shoppers, says several surveys.
Online retail activity is also predicted to increase. “Last year 60 percent of the shoppers we surveyed said they intended to do some holiday shopping at Walmart, 45 percent at Target and 40 percent at online-only sites,” said Mary Brett Whitfield, senior vice president and director of shopper insights at Kantar. “This year, that’s changed considerably, with just 52 percent saying they plan to shop at Walmart, 43 percent at Target and 45 percent at online-only sites.”
All of these details tell marketers that they must study their customers closely, anticipate their needs and understand their behaviors. Research leads to sales and, hopefully, to holiday cheer.
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