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The National Retail Federation (NRF) noted the official start of Christmas buying season 2011 with its list of "Top 10 Holiday Trends" to help retailers with their selling strategy. The NRF looked at some of the overarching trends underway based off their recent survey findings, economic analysis and plenty of conversations with retailers. Shoppers are obviously focused on prices and retailers are expected to be offering strong promotions even earlier.
No. 1: Slow and steady wins the race. NRF puts a total Christmas retail sales increases at 2.8 percent year on year to about $466 billion, but the increase comes from greater number of spenders not an increase in the average purse per consumer. Consumer confidence isn’t where it needs to be and the housing market is making access to credit difficult for some people who are under water on their homes.
No. 2: All shoppers are not created equal. Shop.org’s eHoliday survey found nearly seven in 10 retailers expect online sales to grow at least 15 percent this Christmas. The average person plans to do 36 percent of their holiday shopping online – up from 33 percent in 2010-- meaning that more than one-third of the time, people will be leveraging the web to research products, find gift ideas and compare prices before making a purchase – either online or in a store. The multichannel shopper presents the biggest opportunity for retailers. Holiday shoppers who shop in multiple channels will spend 22 percent more this year than people who are only shopping in a store. All this to say: Retailers, make sure your websites are speedy, accurate and information-filled.
No. 3: And..? What will you do for me now? Think "value add" and service. Consumers have high expectations – they already assume retailers will be offering low prices or strong promotions, and they want to know what they’re going to get on top of that. This “price plus” shopping mentality is all part of the value equation, which incorporates price with other elements like quality, convenience and service. In fact, according to our survey, people were more inclined to say these elements are important factors in their decision on where to purchase – possibly because they already assume low prices are a given.
No. 4: Now you see it, now you don’t. Inventory levels are still very lean this year, which may impact availability of top products. This means an even greater opportunity to sell popular products at a profit. For shoppers, it means that merchandise may be easier to find…as long as it’s not “THE” must-have item this holiday season.
No. 5: You better shop around. In a sluggish economy, consumers do not shop in fewer places, says the NRF. During periods of consumer uncertainty, people dedicate themselves maniacally to finding the “best” deal – and they shop all over the place. NRF found that the majority of shoppers will visit discount retailers, but they’ll also be shopping at department stores, clothing stores, electronics stores, craft stores, and grocery stores and shoppers aren’t discriminating on product. People won’t hesitate to buy toys at a grocery store or stocking stuffers at a wholesale club – and this trend offers opportunities to retailers in all categories.
No. 6: Thank you, sir, may I have another? Six in 10 consumers have set aside money to make additional “non-gift” purchases for themselves this Christmas. The average person will spend $130 on these purchases, an all-time high and a 16 percent jump from 2010. The NRF congratulated retailers for this perk, because consumers have become accustomed to Christmas season "best prices" and now shoppers are planning more personal shopping needs around these deals. Look at J.Crew's website - they are already promoting the idea to buy for self.
No. 7: Gift-giving theme: Everyday appropriate. In 2008 and 2009, both years when Christmas retail sales declined, shoppers were practical. While the trend remains, this year there is more wiggle room as practical doesn't necessarily mean cheap, but consumers will buy a product appropriate to wear or use on a regular basis. Sell the idea of a $200 Keurig or the $400 watch, because the evening clutch might be a tougher sell, said the NRF. The challenge for retailers, of course, is to present each gift option in a way that people will think it’s versatile and applicable for a variety of occasions. Even that pair of diamond earrings.
No. 8: The Early Bird catches the worm, but the Night Owl catches the sales – on Black Friday, at least. Black Friday has morphed from a leisurely mid-morning venture 10 years ago to a fierce, free-for-all bargain spree that lasts around the clock. Twenty-four percent of shoppers hit the stores before 4 a.m. in 2010 that day after Thanksgiving. Already this year, Macy's, Kohl's and Target will open their doors about the time turkey leftovers get put away. There is no reason to set that early morning alarm anymore, since consumers simply stay awake and go shopping at midnight.
No. 9: Free shipping isn’t free…but it works. Consumers have tunnel vision when it comes to retailers paying for shipping. Shoppers expect it, even with low prices. Shop.org found that a record 92.5 percent of online retailers will offer free shipping this Christmas season and 56 percent of retailers say their budgets for free shipping are higher this holiday season than last and one-third say free shipping offers will start earlier. NRF noted that retailers must weigh the “conditions” surrounding free shipping. What’s the minimum purchase required for shipping to be free? Which items are included (or excluded)? Currently, it seems like retailers will be promoting free shipping with conditions most often but a handful are planning some “no minimum” promotions on key spending days.
No. 10: Yes, Virginia, there is an app for that. In the past year, consumers are using their mobile devices in very different ways while nearly half of U.S. consumers with smartphones will use their devices for Christmas shopping this year, according to the NRF, the primary reason will be to research products or compare prices and find retailers’ information. Consumers will also use phones while shopping in stores to read reviews or redeem coupons – while a smaller number (16 percent) will actually use their phone to make purchases. But tablets are a different beast entirely. While there aren’t too many people whipping out their iPad at retail stores, they are using the devices to shop and 70 percent of tablet owners will use their devices for shopping and they are twice as likely to use tablets to purchase merchandise as smartphone owners, says the NRF. When you think tablets, think of someone sitting at home on their couch in front of the TV.
Read more at blog.nrf.com