Creative Shopping Keeps Spirits Bright
Deloitte Insights video
The holidays are getting a little more personal this year, according to Deloitte’s 26th Annual Holiday Consumer Spending Survey. Respondents plan to spend more money on socializing away from home, and less on gifts and gift cards this season. Nearly one-third of respondents also said it’s important for retailers to have multiple channels and opportunities for consumers to shop – from online to in-store.
Tune into this episode of Deloitte Insights to learn more about the survey and what’s in store this holiday shopping season.
Alison Paul, Vice Chairman and U.S. Retail and Distribution Leader, Deloitte LLP
Joe Welter, Partner and Northeast Retail Industry Leader, Deloitte & Touche LLP
Sean O’Grady (Sean): Hello and welcome to the special holiday edition of Insights where we will be discussing the spending intentions and trends of this season’s shoppers. Now it should be noted upfront that the data for this conversation has been pulled directly from Deloitte’s 26th Annual Holiday Consumer Spending Survey. Now joining us here in New York for this discussion are Alison Paul, the vice chairman and U.S. Retail and Distribution leader for Deloitte LLP, and we also have Joe Welter, a partner and Northeast retail industry leader for Deloitte & Touche LLP. Now folks I understand that 5,000 respondents were polled for this year’s survey. Alison, how would you characterize their spending intensions?
Alison Paul (Alison): Consumers intensions were good, 59% said that they would spend the same or more than they spent last year. It is down slightly from the previous year but is really up versus 2009 and 2008, so we are pretty optimistic.
Sean: Joe, do you share that optimism?
Joe Welter (Joe): I share that optimism and so do the people. While respondents are spending a little less money this year, they still tend to get caught up in the holiday spirit. Consumers are intending to spend a little more money socializing with people away from home, and a little less on gifts. They are also planning to buy fewer numbers of gifts. Respondents are also being more intentional about what they buy and perhaps giving more personal gifts this holiday season.
Sean: Let’s talk a little bit more about spending. What does it look like survey respondents will be spending their dollars on this year?
Alison: As Joe said, people are likely to spend a little bit more on socializing away from home and we think that really signals the new normal. Consumers are spending less on gifts and stuff, if you will, and more on events with family and friends. We think that really speaks to a new consumer attitude.
Sean: So sort of a focus for this year?
Joe: Yes, consumers are definitely focusing on getting together and enjoying the holidays. They clearly get caught up in the holiday spirit and it is getting more personal. In fact, we’re seeing some interesting results around the popularity of gift cards and money (cash or check) declining as holiday gifts. These are the types of gifts that some may consider to be a little less personal. Gift cards and cash have declined 11 percentage points and 7 percentage points respectively from 2010, which may speak to consumers wanting to give something that the recipient will really appreciate.
Sean: That makes me feel warm and fuzzy. Jumping into the survey, I saw that 48% of respondents plan to shop either at discount/value department stores or online this holiday season. When I looked at your data from last year, it indicates that the Internet is up and discount/value department stores are down as popular shopping venues. That was interesting to me, was it interesting to you also?
Alison: It was. In fact, that was one of those “aha” moments that came out of this survey. The Internet increased 13 percentage points from 2010 and is neck-and-neck with discount/value department stores as the top shopping venue this holiday season. Of those consumers who indicated they will spend more online this year, they told us that convenience and the ability to find better prices are the top reasons why. The ability for consumers to browse many different retailers online from the comfort of their home is very appealing to them. This is very good news for those companies who have a website or are pure-play online retailers.
Sean: Joe, does that surprise you at all that the Internet has been growing?
Joe: It really doesn’t surprise me, especially when you look at the data on who is using the Internet. Many people have the impression that only the younger generations are using the Internet, but in reality you are seeing Internet use spread across all generations and all different age categories. A lot of people are also getting more comfortable with it, which I think is a really important point.
Alison: That is right. Nearly one-third (32 percent) of consumers surveyed told us it is important that retailers have multiple channels and opportunities for consumers to shop. Whether consumers are doing research online and then going to a store, or going to a store and looking at items and then going home and shopping for them online, it is really important to have a multichannel approach.
Sean: I am guessing this is changing the game a little bit for retailers. It appears there’s a desire for online educational shopping. Is that what you are hearing?
Alison: Research is a critical part of consumers’ holiday shopping process. But we also found that social media is becoming an important component. Forty-four percent of consumers surveyed told us they are going to use social media to look for promotions and research family and friends’ wish lists. So it is becoming an equally important communication device for retailers.
Sean: It sounds like social media is also tied to the smartphone revolution, what do you think? I’d like to hear your thoughts on what consumers are saying about the usage of smartphones during the holiday shopping process.
Joe: Social media is clearly tied, to some degree, to the smartphone revolution. The number of respondents who own a smartphone is 42 percent. An even larger percentage of smartphone owners are between 18 and 24 years of age. The savvy retailers are the ones that are going to recognize this and they are going to have Wi-Fi available not just in their stores, but they are going to have mobile sites and apps that people can use on the go. As Alison said, consumers are looking for reviews, they are looking for price, comparability, and they are looking for things like available products in different stores. So the really savvy retailers are going to take advantage of this.
Sean: Final thoughts to you Alison as we are talking about smartphones and smarter shoppers.
Alison: I think it is interesting that mobile has become a mainstream way of doing your holiday shopping, whether it is doing research or as Joe was saying looking up promotions, looking up prices, or finding the store nearest to you. You know consumers are concerned about higher gas costs, so mobile has become an integral part of shopping for the holidays.
Sean: So just like you said, the Internet is here to stay. Joe any final thoughts from you?
Joe: The thing that I think about is what does this mean for retailers and what does it mean for consumers? From a consumer standpoint, shopping isn’t about just the store, or just the smartphone or website, it is about the total experience. Consumers are doing research before they shop, but they still go to the store. They are still a social animal. They still often go to the store to buy it and to interact with the sales people. So it is really interesting that the shopping experience has expanded so much. The thing to think about from a retailer’s standpoint is how do you embrace that. The best retailers will think about the shopping experience as a total experience for current and potential customers.
Sean: Smartphones, smart retailers, smart consumers, very interesting this year folks. Happy holidays to you both.
Alison: Same to you.
Joe: Thank you, same to you.
Sean: Thank you very much. We have been speaking with Alison Paul and Joe Welter here in New York about the results of Deloitte’s 26th Annual Holiday Survey. If you would like to learn more about Alison, Joe, or the survey, you can find additional statistics, historical data, and a number of useful links on our website, it’s www.deloitte.com/us/2011Holidaysurvey. For all the good folks here at Insights, I am Sean O’Grady, we will see you next time.
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