What did the 2012 holidays teach us about the current state of shoppers—and, of course, the places where they shop? Here are 10 notable trends.
The Expansion of Black Friday—and the Entire Season
Even though it has caused a backlash among certain consumers, retailers have concluded that the formula for increasing seasonal sales totals is mostly based on increasing holiday promotions, deals, and store hours—hours that now include Thanksgiving night. Not only is it standard for stores to open by 8 p.m. or 9 p.m. on Turkey Day, but the holiday season now basically overlaps with the back-to-school shopping period, with promos and Christmas displays popping up in early September.
Soaring Online Sales, So-So In-Store Sales
As projected, it’s been yet another very strong season for e-commerce. Online spending was up sharply on Thanksgiving, Black Friday, and Cyber Monday alike (increasing 17% or more compared to corresponding days in 2011), and consumers hardly tired of online shopping in the weeks that followed. During the week of “Green Monday” (second Monday in December), four separate days crossed the $1 billion mark for online sales, according to comScore, resulting in the highest-ever sales total over a five-day stretch.
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Meanwhile, spending in physical stores was down nearly 2% on Black Friday, and after several sluggish weeks of sales, some experts lowered projections for holiday spending during the 2012 season.
Brick-and-Mortar and Online (Try to) Become One
If there’s one dominant trend in retail lately, it’s the utter blurring of online and offline shopping. For quite a while, shoppers have viewed the two modes of transaction as basically interchangeable. Retailers with a presence on the web and in real stores seem to have finally embraced the idea that both segments must be partners sending the same message to shoppers. In the past, it was almost as if the people running a retailer’s website had no contact with the people running the actual stores. Prices varied frequently, and often, products sold online weren’t sold in stores, and vice versa, leading to confused, frustrated shoppers. Early on, a retailer’s presence in social media might have come as a result of a few ambitious young interns, if there was a presence at all. Today, on the other hand, retailers and analysts talk nonstop about the need to combine online and offline sales efforts, with phrases like “multiscreen shopper,” “omnichannel shopping,” and “cross-platform marketing” popping up regularly.
Retailers understand that “showrooming” is commonplace, and that it’s not necessarily a bad thing to encourage a combined online-offline shopping experience. In fact, according to one survey, 91% of consumers wound up in a store because of something they saw online, and 77% admit to researching products while inside stores. Retailers have no choice but to embrace the “omnichannel” shopper. While they’re actively trying to lure shoppers into physical stores with deals and promotions, they’re simultaneously ramping up efforts to draw consumers to their websites. The results have boosted online sales, but because of the challenges of creating a truly unified online-offline experience, there remain instances of consumer frustration due to confusion over what is sold where, canceled orders, price variations between the web and brick-and-mortar, and more. This remains a work in progress.
More Shipping Deals—Speedy, Free, You Name It
In the same way that 30% or 40% off has become the starting point for getting shoppers’ attention during the holidays, consumers now often demand free shipping in order to consider an online purchase. Accordingly, free shipping has become almost universal during the holidays, and throughout the year really.
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To meet the needs of shoppers, retailers provided free shipping as late as December 22 with guaranteed delivery by Christmas Eve. For procrastinators or the merely impatient, sites also increased the possibilities of same-day delivery. The message being sent to shoppers is this: Any way you want to make a purchase, we’re going to help you make that purchase.
More and More “Leaked” Black Friday Ads
In the past, retailers used to vigilantly protect their Black Friday prices and ads from making their way to the public eye too early. The thinking was that if consumers saw, say, a bigtime Black Friday deal on a laptop, they sure as heck wouldn’t buy that laptop the weekend before Black Friday, when it was double the price. Lately, though, retailers seem to be embracing the idea that there’s little downside to earlier publicity—and just plain more of it—for sales. While some stores are coy about how their ads get “leaked” well in advance, many large chains are deciding to simply publicize their Black Friday prices well before Black Friday to get shoppers excited and help draw them in during before, during, and after the biggest shopping days.
Price Matching Crosses the Digital Line
During the holidays, many retailers have gotten in the habit of promising to match the officially advertised prices listed by their competitors in weakly circulars. Walmart even matches prices year-round. But traditionally, the guarantees have come with a large caveat: They’re limited only to prices offered in brick-and-mortar stores, meaning they wouldn’t match online prices, including those of the company that’s arguably become the toughest competitor in the business, Amazon. This season, though, for the first time ever, Target and Best Buy offered to match online competitor prices. PayPal and certain credit cards offered expansive price-matching services as well, giving shoppers more options than ever to assure that they wouldn’t wind up paying too much.
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Layaway: Popular with Stores and Shoppers Alike
Not long ago, layaway had all but disappeared from the retail scene. Then the Great Recession hit, shoppers grew sick of credit cards (more specifically, credit card debt), and the idea of paying off holiday purchases in cash sounded terrific. It even sounded good to pay off gifts in cash with the help of layaway programs—fees, paperwork, extra trips to the store, and other hassles included. This year, retailers came to view layaway not as an administrative headache but as a marketing tool to draw in shoppers on especially tight budgets. Accordingly, they lowered their usual layaway fees, giving shoppers more reason than ever to pay off holiday purchases with programs that seemed outdated just 10 years ago.
The Discounts Just Keep on Coming
Many retailers had hoped to avoid deep discounting during the holidays. JCPenney has even continued with its reinvention plan featuring “fair and square” pricing and almost no sales. For the most part, however, the “everyday low price” concept comes up short during the holidays, when deals of 40% or more off are commonplace. Much less than that, and shoppers seem very reluctant to bite. Target, which was one of the major chains that announced it hoped to skip major markdowns over the holidays, especially for its premier exclusives like its Neiman Marcus line, felt compelled to discount the line by 50% or more weeks before Christmas.
Season of Giving—To Oneself
Because of a confluence of trends, the concept of “self-gifting” has never been more popular. While part of the rise in self-gifting is explained simply by an increase in the cultural acceptance of treating oneself—a.k.a., selfishness—buying stuff for yourself around Black Friday just makes rational sense. If you were going to purchase a new TV or suit, why not wait and do it in late November or early December, when you know everything will be on sale. What’s more, there’s some logic to leaving the most personalized shopping decisions up to the individual on the receiving end, rather than to any giver. After all, who knows what the recipient wants best?
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Here’s a Gift—So You Can Pick Out Your Own Gift
Very much in sync with the self-gifting trend is the continued popularity of gift cards. A National Retail Federation survey named the gift card as the season’s most requested gift—which is a bit odd considering that it’s the equivalent of receiving a gift you have to return. (Both usually require a trip to the store.) Then again, there’s nothing odd about it; people like gift cards because, a la self-gifting, they know their own preferences best and enjoy picking out things for themselves. Unfortunately, many gift cards come with fees paid by the giver, the recipient, or both. Regardless, even with the fees, gift cards are generally viewed as a better alternative to giving something the recipient doesn’t want and may feel pressured to keep. For some reason, society also generally feels that gift cards are more personalized than cash, even though both gifts end with the exact same results: The recipient winds up picking something out for himself.