News

Brand Keys survey predicts 5% decrease in holiday retail sales

November 8, 2013

Increased use of mobile outreach and planning, coupled with an increased number of retail-developed mobile apps, means traditional retailers will have to truly work to engage consumers if they want their share of a projected $825 for the average 2013 holiday spend. That figure, five percent lower than 2012, was identified in the annual national survey by Brand Keys Inc., a New York City-based brand loyalty and customer engagement research consultancy.

Methodology

Brand Keys annually conducts interviews with 15,200 consumers in the nine U.S. census regions during the last week of October and first week of November in regard to anticipated holiday spending attitudes and activities.

Planning For the Holidays Before Spending For the Holidays

Sixty-five percent of the consumers interviewed indicated that they used, or planned to use, their mobile devices to research shopping options for the upcoming holiday season.

"This kind of planning used to take the form of making lists, on and off-line coupon clipping and price checks," said Brand Keys president Robert Passikoff. "But mobile is allowing consumers to plan more effectively to find best values in a shorter period of time. Combine that with more sophisticated retailer-apps, and the need-to-shop time window has decreased for consumers."

Few Shopped in October

Only 19 percent of shoppers surveyed indicated that they started shopping for the holidays in October, 5 percent fewer than 2012.

"There’s a different 'feel' to the holiday marketplace this year," Passikoff said. "It's calmer. Retailers didn’t start advertising for the holidays right after back-to-school like last year, and consumers don’t feel the pressure they once did. We're not seeing the 'Buy Now!' or 'Lay-It-Away' advertising we saw in recent years."

Half will Shop November, One-Third Wait Till December

Forty-five percent of perspective shoppers indicated they would begin shopping in November, with most consumers (35 percent) indicating they intended to wait for the traditional Thanksgiving Black Friday and Cyber Monday sales.

"Coincidently, those shopping events time out right to the period that most consumers feel comfortable gearing up to shop," Passikoff said. Another 35 percent of shoppers indicated they will wait until December to shop. "There's a sense that pricing for virtually everything has steadied and gained some market equilibrium, while mobile devices make it that much easier for the consumer."

Where Will Consumers Shop?

Virtually all consumers interviewed indicated they’d buy some holiday gift online (98 percent). And, even in light of the mobile movement, bricks-and-mortar retailers are still high on consumers' list of places they intend to visit:

The only traditional outlet that dipped significantly was catalogs (50 percent), down 18 percent from last year. "If you can pull it up on a mobile device," said Passikoff, "you don’t need the hard-copy, so maybe online is taking up the slack for those retailers."

Mobile Shifts the Shopping Paradigm

As it has changed other areas of communication and commerce, mobile has changed the shopping paradigm, all too visible in the change in the four leading shopping engagement drivers.

"A category once driven by 'Location and Value' is now more accurately described as 'Connection and Value,'" said Passikoff, “but other category engagement drivers remain unaltered and still very important. 'Shopping Experience' still leads the way in creating engagement and generating sales, followed by 'Store Reputation' and 'Range of Merchandise.'"

On What Will This Money Be Spent?

Gift cards have become as universal as greetings cards, with nearly everyone indicating they'll buy at least one this year (95 percent).

All other categories — with the exception of Electronics, Phones, and Computers, which are being purchased as new models appear in the marketplace, and CDs, DVDs and video games, which have been swapped for downloads and apps — remain relatively unchanged from 2012.

"Consumer expectations regarding outreach and convenience, particularly for mobile, and shopping experience for bricks-and-mortar retail, are all up again this year," said Passikoff. "If you can integrate the store experience with your mobile outreach, it's likely to be a winning combination for a retailer."

Read more about consumer behavior.