Retail Holiday Season 2011: Some Trends

by David Baker, Nov 7, 2011, 10:53 AM

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Well it’s official. lLast week began the 2011 retail holiday season.  An optimist would say the retail holiday season’s proverbial glass is half full, with an expected 2.8% growth over 2010.  A pessimist would say the glass is half empty, suggesting consumer confidence is pretty low and access to credit diminishing consumer optimism.     An optimist looks at the good, the pessimist looks at the bad -- and a marketer might say, rather, “Your glass needs resizing.”

This season will definitely be an interesting time for marketers.  Shop.org’s eHoliday Survey  indicated nearly seven out of 10 retailers expected their sales to be up 15%.  The National Retail Federation (NRF) followed this with a projection that 36% of holiday shopping will be done online (leveraging the Web for researching, comparison shopping before making a purchase) .   This is a pretty dramatic channel shift from 2010. It will put a lot of pressure on retailers to be highly relevant and timely when consumers are in-market. 

What you’ll realize in 2011 is that not every consumer is created equal.  Over one-third of your customers may require a Web experience (first- and third-party site-driven) to make a purchase decision about your product.  The vast majority will be doing so on their mobile device/app.   

Consider you have smarter shoppers, who are conditioned to look for the lowest prices and now they have an economic reason to motivate shopping comparisons.  Expect them to be less free-flowing with credit.   Charitable behaviors will be more pervasive, but with altruistic behaviors, come the self-indulgent (consumers will spend more on themselves this holiday season than past).   What a crazy economical and behavioral cycle we go through!

Economic conditions have always had an impact on impulse purchases, habitual purchases,  switch considerations (consider all the Credit Union switch behavior happening now). Consumers will rely more on “real-time” relevant communications, real-time reinforcement of purchase decisions, smarter search and comparison services,  more flexible payment options – and, most importantly, an uncanny ability to synchronize the experience from store to web.  The reality is, when the economy is slow, people don’t shop in fewer places, they shop in more, increasing traffic dramatically in virtually every category of retail with their quest for the “best deal.”

Several things that will be fun to watch this season:

1.   Watch the apps!   With over half of smartphone users using their devices for shopping this holiday season, it should be an interesting focus group to watch the shoppers in malls run into each other with half of the foot traffic playing on their smartphone.  If this wasn’t a priority for marketers, it will be the most prolific year for the app in our history.

2.  The store experience is great, but FREE shipping is better.   Will the free shipping bug be pervasive this year?  Will it be an unlimited promotional strategy? Or will it be used as promotion with conditions (spend thresholds or items or time conditions)?   How heavily this tactic will be used as the front-end to offers, given that everyone expects it, will be an interesting trend to watch.  The FREE Shipping subject line just doesn’t draw like it used to.

3.  Play on charity:  Are we going to see more altruistic marketing messaging this season?   With virtually all major brands spending on extending their voice through social networks, will the connection to charitable activities and brand promotional strategies align?   Expect more messaging to tie the two together.

Shop hard, optimize everything and make this holiday season a year of the connected experience. The consumers will pay it off.

 

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