Consumers may be wary this holiday season, but there are bright spots ahead. According to the National Retail Federation, overall holiday spending is projected to increase 4.1% this year, from $563 billion in 2011 to $586 billion in 2012. Technological advances have made it easy for consumers to shop from anywhere, at any time, and this year they are taking note; the NRF also projects that online holiday sales will grow 12% from 2011 to 2012, reaching $92 to $96 billion.
On average, holiday shoppers plan to spend approximately $568 on gifts this season, up 14% from $497 in 2011, according to the Cotton Incorporated Lifestyle Monitor™ Survey.
“What consumers give year to year doesn’t necessarily change much – but the way they’re making those purchases has changed tremendously over the last decade,” says Kim Kitchings, Vice President, Corporate Strategy and Program Metrics, Cotton Incorporated. “The rise of e-commerce and its ease of use, and now the increase in smartphone usage as a means to make purchases, have enabled consumers to shop wherever, whenever.” This is certainly a boon to the more than half (52%) of consumers who say they find holiday gift shopping to be stressful, according to Monitor data.
That stress may be due in part to procrastination; only about a third of consumers (32%) start holiday gift shopping in November, while an equal percentage (18%) start shopping in October and December. Just 14% of consumers say they buy holiday gifts throughout the year, Monitor data reveal.
Savvy shoppers plan to rely on a variety of mechanisms to ensure they get the best price; from doing more comparison shopping (45%), looking for deals on days like Black Friday (45%), to shopping around to find the best deals (43%), according to Monitor data.
“This is really the new normal,” Kitchings says. “I think these actions allow consumers to take the time to choose and spend their money wisely.” Devices like smartphones and tablets, too, enable consumers to take their time and comparison shop online. Among those planning on buying holiday gifts this year, 82% plan on using the Internet to shop for them, relatively flat from 84% in 2011. And among consumers planning on using their smart phones to shop for holiday gifts this year, 49% say they will use them to purchase items, up significantly from 28% in 2011. Sixty three percent say they will use them to comparison shop, while 52% will locate stores and 37% will read customer reviews.
In 2011, tablet users spent 20% more per order on average than desktop online shoppers and 50% more than smartphone users, according to Adobe Digital Marketing Insights. Using a tablet also allows consumers to extend shopping to earlier or later in the day, perhaps before work or after the kids have gone to bed.
“There is an absolute convenience in shopping online, but for apparel gift givers, there’s still something to be said for a trip in-store to touch and feel the item,” Kitchings says. And consumers are certainly planning on spending significantly more on clothing gifts this year ($226 compared to $169 in 2011). Planned expenditures on clothing gifts are up 50% among women, 13% among men, 40% among those ages 35-70; and 16% among those ages 13-34. “What’s interesting here is that planned clothing expenditures are up 33% among adults with or without children, indicating that clothing gifts will be a popular choice for non-parents this year too,” Kitchings says.
Meanwhile, retailers are pulling out all the stops for consumers. Big-box stores like Kmart and Walmart have streamlined their layaway programs, making it simpler for lower-income shoppers to use. Monitor data indicate that more than one fifth (21%) of gift-givers plan to use layaway to buy holiday gifts this year, up from 16% in 2010, and that percentage increases to 33% among shoppers making $25,000 or less.
But as retailers are also eager to reach those high-income shoppers, exclusive lines have become one lucrative way to drive sales. This year, EBay is partnering with designers like Chris Benz, Jonathan Adler, Tibi, and Steven Alan for its Holiday Collective this season. And recently, the industry was abuzz with news that Target and Neiman Marcus were teaming up to offer designer lines for the holidays.
“Given that it’s the biggest retail push of the year, the holiday season really underlines how important it is for the industry to stay on trend,” Kitchings says. “Whether it’s geometric prints or non-traditional colored denim, we need to give people a reason to update their wardrobes.”
Maintaining a holistic approach to retail is one aspect. “We can’t lose sight of in-store atmosphere, and creating that sense of wonder and awe,” Kitchings says. “Window shopping, whether browsing onlineor browsing in-store, is another piece of that.” Indeed, Monitor data bear this out; 42% of consumers say they get clothing ideas from store displays or window shopping, indicating it is still a viable means to woo consumers to the registers.
Ultimately, Kitchings says, what may move the needle for consumers this holiday season is ease and efficiency; when they have done their research and are ready to make the purchase, it must be a fast and seamless process. “In a sense, today’s consumer is always shopping, and it’s imperative that retailers are able to capitalize on that, and turn that browse into a buy.”
Emily Thompson is the Associate Director, Editorial at Cotton Incorporated, the research and marketing company representing upland cotton. For more information on the Lifestyle MonitorTM Survey, please contact her at email@example.com. The data found in this article, as well as additional relevant information, can be found at CottonLifestyleMonitor.com.