Are you ready for holiday shopping season yet? According to a new study by PwC and Strategy&, 2014 Holiday Outlook: Top trends, consumer behaviors and implications for retailers, the 2014 holiday shopping season will be characterized by cautious spending and a growing division among two types of shoppers. Here are 8 trends you need to know about.
- Shoppers will spend cautiously. The average projected spend is down from last year, with 84 percent spending the same or less as in 2013. Limited disposable income (64 percent); a rising cost of living (61 percent); and insufficient salary (37 percent) are the main factors driving customers to close their wallets. As a result, household spend levels are projected to slightly decrease in 2014.
- America’s economic conditions have divided holiday shoppers into two distinct categories: survivalists and selectionists. About two-thirds of U.S. consumers are “Survivalists,” typically making under $50,000 per year and focused on affordability. They’re spending an average of $377. In comparison, “Selectionists,” typically making more than $50,000 per year, will spend an average of $978.
- Customers at all levels are seeking value. ”Price” and “deals” are the top two factors in where customers shop. Seeking convenience plus low prices, more consumers are turning to online spending, which will account for 43 percent of purchases this year (up 2 percentage points from 2013). Hot categories? Clothing and gift cards are the most popular planned purchases.
- Not only money, but time, is at a premium. 2014 could be the turning point when online pre-planning becomes integral to holiday shopping. Forty-one percent of shoppers plan to spend more online than in 2013, and three distinct omnichannel shopper profiles will emerge: tradeoff shoppers (39 percent) will shop around and buy online if it’s cheaper; transitionalists (29 percent) will shop online a bit, but prefer brick-and-mortar stores; and digitalists (32 percent) make online their “go to” channel.
- A new Thanksgiving ritual of shoppers going online to prepare their “holiday shopping plan” may be the most significant shopping pattern this season. With affordability a major concern, consumers will do lots of planning as to where and what to buy and how much to spend over the Thanksgiving weekend. Forty-nine percent of shoppers will search, showroom and purchase on Thanksgiving morning; 50 percent of shoppers will shop during Thanksgiving/Black Friday to grab the best deals.
- Shoppers know what types of gifts they’ll be spending on. The five categories shoppers will spend the most on in 2014 are clothing, gift cards, toys, electronics and media/entertainment.
- Experiences matter, too. Holiday get-togethers and family occasions are growing in importance. More Americans are entertaining at home, and while Thanksgiving dinner is still the most important holiday eating occasion, in-home parties and spontaneous get-togethers are projected to increase among Millennials, in particular.
- Shoppers will hit multiple stores and websites in their search for savings. Seeking to stretch every dollar, 53 percent of survivalists will visit two to three stores or websites, while 47 percent plan of selectionists will visit two to three stores or websites.
Big retailers have upped their game this year, the study found, by investing in improved in-store and omnichannel shopping experiences and preparing in case of bad weather. How can your small business compete?
- If you own an e-commerce business, make sure online shopping is convenient and simple, that your cybersecurity is up to snuff and that you have multiple supply sources and shipping options in case of inclement weather.
- If you own a retail store, differentiate your store from competitors by making it an exciting experience with décor, music and entertainment.
- Focus attention on loyal shoppers with rewards just for them.
- Use promotions to drive traffic to your store or site.
- Train your employees to do their utmost this holiday season.
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Karen Axelton is Chief Content Officer of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her company’s blog at SmallBizDaily.com.