They say there are two sides to every story and when we’re trying to predict what consumers will do it’s oh, so very true.
Last week, the National Retail Federation predicted a 4.1% increase in holiday buying this year. I’d call that cautiously optimistic. This week, PwC and Strategy& released their holiday predictions and it’s not nearly as rosy.
According to the “2014 Holiday Outlook: Top trends, consumer behaviors and implications for retailers” report, average household spend will drop from $735 in 2013 to $684 in 2014.
The problem is that darned, old economy. 72% believe that the economy is the same or worse than it was a year ago so conversely, they plan to spend the same or less than last year. That doesn’t mean they plan to buy fewer items, it just means they need to find better deals on the items they need.
In order to stretch the budget, more shoppers than ever will be using the omnichannel approach to create a shopping plan.
It all begins in early November as shoppers start searching, showrooming and making notes before all heck breaks loose on November 27. Black Friday used to be the day the flood gates opened but in 2014, 49% of consumers said they plan to head out Thanksgiving morning to begin their holiday shopping odyssey.
21% of all holiday spending will happen between now and Cyber Monday. Of course, buying will continue through December with dollars rising as we get closer to Christmas. PcW says we can expect the largest wave of spending between the 15th and the 25th. Families making under $50,000 a year will spend an average $184 during this period. Those with incomes over $50,000 will drop $489 in those same ten days.
Breaking the In-Store Habit
Since more shoppers are looking for the best value, more than ever are willing to give up old shopping habits in favor of shopping online.
PwC says there are three types of omnichannel shoppers:
- Tradeoff shoppers (39 percent) will shop around extensively and buy online if it’s cheaper
- Transitionalists (29 percent) will shop online a bit, but generally prefer traditional stores
- Digitalists (32 percent) will make online the “go to” channel for most discretionary and planned shopping
41% of those who will shop online, will be spending more than last year so we can expect online revenues to rise while brick and mortar stores take a hit.
One of the best things about shopping online is that it’s almost completely weatherproof. It might be snowing like crazy outside but it’s warm and cozy by the fire with your tablet in your lap. As long as the mailman can make it through with his deliveries, it will be a very merry, and less stressful Christmas.
Once the gifts are open and the excitement is gone, shoppers will head out for the last wave of the holiday season – the after Christmas sales. PwC says shoppers will spend an average of $23 to $83 dollars per person on highly marked down gifts and goodies