Editor’s note: Lance B. Eliot is global vice president of information technology at market research firm Interactions, San Diego.
This year, an estimated $630.5 billion holiday shopping bonanza is projected to occur during the holidays, according to the National Retail Federation.
When you consider nearly 80 percent of holiday shoppers we surveyed stated they plan to get gifts both in-store and online, spending will be plentiful this season. But a key question for retailers remains: How will they capitalize on the spending pie? The results will depend on the retailers’ response to the top trends Interactions identified this holiday season:
Trend #1: Great customer service gives way to smaller discounts
More and more retailers are doing away with the heavy discounting seen during the recession and are offering improved customer service and experiences to obtain sales. These retailers are banking on the customer experience to get the consumer to spend even when the discount is less. A lousy experience in a store – almost no matter what the discount – will have shoppers going elsewhere.
To enhance the shopping experience that results in sales, retailers won’t have to look far. Interactions’ Retail Perceptions survey, The Holiday Shopper: Trends to Expect This Season, found that when buying gifts this season, 48 percent of holiday shoppers said they will use pre-determined shopping lists. However, 86 percent of those are open to purchasing gifts not on their lists. This means that retailers that can create experiences that engage consumers will have an opportunity to influence shoppers.
Trend #2: More store stay closed on Thanksgiving
Retailers are finding that the strain to be open on Thanksgiving is not the best strategy. More retailers are opting to follow the example set by Costco, Nordstrom, Dillards, TJX Stores, Pier 1, Home Depot, Lowes, Staples, GameStop, all of which have said “no” to being open on Thanksgiving. In the past couple of years, retailers have noticed Thanksgiving Day sales are eroding the Black Friday sales. The pushback to stay closed on Thanksgiving could also have to do with consumer sentiment where some consumers dislike the practice of having Thanksgiving Day sales.
Trend #3: Trusted, reliable brands will attract the most shoppers
Consumers are worried about where holiday products come from and how they were made. Brands that are trusted by shoppers will get the lion’s share of the holiday dollars. Providing a trustworthy experience also means providing protection from security breaches. As Interactions’ Retail Perception survey points out, 10 percent of holiday shoppers say they will only make purchases from retailers they trust. Consumers trust retailers that they know prioritize the security of their personal information. By valuing the security of customers while continuing to connect with them through in-store experiences, retailers foster customer relationships that build both their trust and their business.
Trend #4: Mobile shopping will be more prevalent
Mobile shopping keeps growing and growing. This holiday season, 49 percent of holiday shoppers surveyed by Interactions said they will use a mobile device to make purchases, it is expected to reach new heights. Retailers looking to draw in as many customers this season should be m-commerce or e-commerce ready.
Notwithstanding, keeping consumers safe is paramount at all times – particularly during the high spending season when hackers are ready to attack. Interactions found that 10 percent of holiday shoppers say they will only make purchases from retailers they trust. Consumers trust retailers that they know prioritize the security of their personal information. For retailers, staying relevant in the minds of shoppers means giving them what they want, when they want it and providing a seamless shopper experience in the process. Retailers gearing for a happy holiday season filled with shoppers will be smart to keep mobile payments top of mind.
Trend #5: Post-holiday shopping will ensue
December 26 has been predicted to be the second busiest shopping day of the year. Shoppers that didn’t get what they wanted will head out in droves and make that final purchase.
Overall, sales for this holiday will be a boon. The National Retail Federation (NRF) is expecting November and December sales to rise 3.7 percent over 2014 levels, which is significantly higher than the 2.5 percent year-over-year average seen over the last decade.
Complacent retailers that think the cash register is going to ring simply because they have their doors open are blindly wishing for a good holiday season.
Smart retailers that will be getting the biggest piece of the holiday pie are those that offer high-quality merchandise, have splendid customer service and engage shoppers in being seasonally delighted as they open their wallets during the shopping experience.