Here are 10 major consumer themes that were on display over the past few months:
Relentless expansion of the holiday season. Despite gripes about “Christmas creep,” holiday displays and promotions were launched earlier than ever this year. Kmart started airing its first holiday commercial in early September, and many other retailers rolled out holiday promotions before summer was officially over. The reason stores are pushing Christmas earlier and earlier is quite simple: The competition for sales is fierce, and retailers want to beat their rivals to the punch to get those consumer dollars first. Retailers wanted to get the final holiday shopping dollars spent by consumers as well, and they employed 100+ consecutive hour shopping marathons to woo insomniacs and other harried customers interested in completing their gift-buying lists in the middle of the night.
“Black Friday” up, Black Friday down. Heading into the holiday season, analysts stressed that the importance of traditional, in-person Black Friday shopping was on the decline, and perhaps even facing extinction. Sure enough, most declared Black Friday a flop, with the weekend experiencing the first year-over-year spending decline since 2009. Even so, retailers continued to rely on the term “Black Friday,” applying it to sales that surfaced a week or more before Black Friday. And of course, tons of retailers launched their official Black Friday sales on Thanksgiving Day, rather than bothering to wait for Friday. All of which factored in to a fairly calm Black Friday 2013, when shoppers enjoyed a little extra elbow room, yet when stores wished for larger, more spend-happy crowds.
No true “it” toy. Despite the proliferation of “hot” holiday toy lists, no single toy emerged as a must-have gift for kids. Among the reasons this was so: Increasingly, kids want electronics rather than traditional toys.
Speaking of electronics—let’s hope you bought early. Over the years, many shopping experts have questioned the wisdom of purchasing on Black Friday or Cyber Monday. In many cases, the arguments (and much data) claim, the best prices for hot gift items aren’t to be had on these big shopping days. Adding fuel to the argument is a study by Adgooroo, which shows that the average asking prices for many hot gadgets were significantly cheaper in early November than they were on Black Friday or Cyber Monday. Apple‘s iPad Mini, for instance, was being advertised for an average of $284 around November 7, compared to $302 on Black Friday and $340 on Cyber Monday.
Price-matching: better for retailers than shoppers. The expansion of price-matching policies by Target, Best Buy, Toys R Us, Staples, and Walmart (even on some Black Friday specials) would seem to be a terrific development for consumers. And to some degree, the existence of such policies must force competitors to keep prices somewhat in line. But due to the typically long list of exceptions for price matches, and the extra steps required to get the lower price, only a small portion (perhaps 5%) of shoppers ever bother with price matching. “Most people think of it as a waste of time,” Edgar Dworsky, founder of ConsumerWorld.org, told the Minneapolis StarTribune. “It’s just for inveterate bargain hunters.” As a result, retailers get to appear like their prices are as low as anyone’s, which encourages shoppers to make purchases without worry of a better price elsewhere, while the reality may be otherwise.
40% off? Meh. More so than ever, the idea of paying full price for anything seemed absurd this holiday season. “The deal is not so special anymore,” Alison Jatlow Levy, a retail strategist at consulting firm Kurt Salmon, explained to USA Today. “The deal has become the norm. And if the deal is the norm … it actually just trains the consumer to never buy at full price.” With more than a couple weeks before Christmas, nearly half of all shoppers said they were waiting until the arrival of 70% off sales before they’d buy.
More cyber spending. The decline in shopping at the mall was counterbalanced with the continued rise of e-retail purchases. Online sales got off to a great start for the holidays, with a 17% increase on Thanksgiving and Black Friday compared to the year before. But things slowed down toward the end of the season, which, according to comScore, saw an overall 10% increase in online sales over the 2012 season.
Late-season shipping fail. While there was some disappointment that the increase in holiday e-retail sales may not have met expectations, the 2013 holidays will be remembered for a different e-retail fail: Delays at UPS due to a surge in purchases, bad weather, and other factors meant that many online purchases that were guaranteed to arrive by Christmas didn’t make it on time. Retailers whose customers were affected, including Amazon and Kohl’s, offered gift cards and refunds of shipping and other costs, but plenty of shoppers were bitter that Christmas morning was spoiled. The feelings could affect shopper behavior—and the shipping contracts negotiated by e-retailers—for years to come.
The other big e-retail issue. In the quest for ever-increasing online sales, retailers pushed fast, free shipping, competitive pricing, and easy return policies throughout the holidays. But the latter especially seems to be coming at a costly price for retailers’ bottom line. The Wall Street Journal reported that as many as one-third of online purchases were returned, and that returns were expected to increase 15% for the 2013 holiday season.
Gift cards: because we don’t know what else to buy. Yet again, for the 2013 holiday season gift cards were the most requested gift item (wanted by 60% of consumers, per the National Retail Federation), and the most popular holiday gift to buy (the top choice in a Nielsen survey). Gift card sales were expected to hit an all-time high for the 2013 holiday season. And yet, as an All Things D post pointed out, gift cards often go unspent — or half-spent, with a nominal balance left on them for all of retail eternity.” Hence the existence of gift card exchange and resale sites, which promise to transform unused gift cards into cash. The only problem is that users inevitably get less cash than the value of the gift card. Perhaps one of these years consumers might reexamine the buying of gift cards and consider that it just might be more sensible—and thoughtful—to just give cash in the first place.