Gift cards will be a huge category again this holiday season. More than 80 million shoppers plan to purchase gift cards this year, about 4 percent more than last year.
Black Friday and Every Day
Bargain seeking will, unsurprisingly, dominate consumer behavior. Private-label goods (whether in electronics, apparel, or groceries) will see strong growth as consumers seek greater value for their holiday dollar.
Consumers are increasingly viewing Black Friday as irrelevant: They start looking earlier and buying later, and are moving online. As a result, retailers are discounting even earlier, seeking to convert these early shoppers. As always, some shoppers will wait to make their Christmas purchases at the last minute; in fact, we estimate that some 25 million shoppers will hit the stores on Christmas Eve, a 9 percent increase over last year. They will be expecting even better last-minute deals.
Showcasing — browsing in a store before buying online — will be a major challenge for bricks-and-mortar retailers this year. We found that 40 percent of consumers now describe showcasing as their shopping strategy. Multichannel shopping will also be increasingly popular. In this form of shopping, people use more than one medium for a single purchase or group of related purchases. They may research their products online but buy them in a store, buy them online for pickup in a store, or buy a product in a store but buy its accessories online. Among some consumer groups, multichannel shopping will be the dominant path to purchase this year.
Capturing the Sale
The good news for retailers is the willingness of shoppers to start buying again — albeit cautiously and with a relentless and technology-enabled quest for value. The biggest challenge this season for bricks-and-mortar retailers in particular is how to drive more than their fair share of showcasing activity to their own websites (rather than to Amazon or another competitor). Improved shopper confidence doesn’t do you much good if your stores are just a showroom and someone else ultimately captures the sale.
What can a retailer do to capture sales in the store or drive the consumer to its own website rather than a competitor’s site? This is a formidable challenge, and the retail industry as a whole is struggling to find answers. Here are some of the best practices we already see in place for this holiday season:
• Expect most or all of your customers to be simultaneously browsing in your store and on their smartphone. Develop seamless digital and physical experiences to exploit multichannel retailing, because shoppers will expect it. Make your digital experiences so compelling that your customer never feels the need to check out your competitors.
• Offer “buy-it-now” promotions at the shelf to turn browsers into buyers or to drive customers in your store to your website. Give them incentives to purchase immediately instead of going to a competitor. For example, QR codes — the little square codes on products that consumers can scan with their smartphones for further product information, comparisons, and reviews — can be used as promotions to convert a sale. Let consumers scan a code to, for instance, have items shipped to their home immediately at no charge.
• Capture information about your customers as they browse in-store (for example, through mobile apps linked to your loyalty program), then ping them a day or two later with a “too good to miss” promotion that will increase your chances of conversion.
• Use loyalty points (most retailers have proprietary loyalty schemes now) to drive conversion. For example, tell consumers “you can earn double points if you buy today in the store, triple points if you place an order online within 24 hours.”