It's go-time for retailers as they enter the all-important holiday shopping season. And despite waves of variable weather from coast to coast, and ongoing topsy-turvy political theater, Synchrony Financial's Holiday Consumer Survey reveals that 2017 looks to be a banner year for holiday spending. Ronda Slaven, VP of Research & Thought Leadership at Synchrony Financial, says that consumer confidence is near 20-year highs — but for unexpected reasons. "It isn't an outlook based on the economy, the political situation or even a broad macro view," she says. "It's actually a positive view of personal finances." She says the company's survey results suggest a positive uptick for retailers, with consumer spending increasing by 3.8 percent to 4.2 percent over last holiday season. "That forecast is above what we've seen in recent years, but where sales are coming from will be unique," she continues.
Here's a look at what those influences will be, as well other trends that will dominate this year's holiday shopping.
1. Online will surpass in-store
"If you're close to retail at all, you've seen it coming, and we've finally crossed the threshold," Slaven says. She refers, of course, to the tipping point when online overtakes in-store sales for the holiday season. Slaven says Synchrony Financial's survey suggests this is the year we'll cross over for the first time, with online gobbling up more than 50 percent of overall sales. Slaven says the number is only expected to increase as Boomers and Gen Xers become ever more comfortable transacting online — and especially interesting to watch will be purchases made over social networks. "It's a growing channel and I think retailers are getting more savvy about how to leverage it," she says. Interestingly, despite the ubiquity of smartphones and tablets and apps, Slaven says mobile devices are expected to account for just 20 percent of online sales, with the rest largely coming from the good old-fashioned desktop.
2. Consumers aren't in a hurry
We may not see the pre-Black Friday purchases of previous years, with the number of shoppers saying they don't plan to begin shopping until after Thanksgiving jumping from 30 percent to 37 percent. Slaven notes respondents also said the majority plan to be done with their holiday shopping by December 15, meaning the buying season will contract a bit this year. Slaven says that one factor may be that some retailers are backing away from intense one-day sales — Black Friday, Cyber Monday — in favor of a week-long period with the same sale prices. This is a savvy tactical move, according to Slaven. "Retailers are locking in sales earlier, because they know the later they wait the more likely it is customers will impulse buy online — when they're shopping at the last minute," she says.
3. Tech sells...
It's no terrific surprise that shoppers plan to make consumer electronics a big part of their buy, with more than half saying tech is playing an important role this holiday shopping season. But Slaven notes that there's category bleed here, as technology seeps beyond the borders of traditional consumer electronics. "In addition to tech-enabled clothing, there's a whole new world of toys out there, like robotics or how to code for kids," Slaven says. Besides being a reliable category for sales, the try-before-you-buy nature of tech goods might end up being a potential driver of in-store traffic for some retailers, Slaven says.
4. Gift cards are king
While shiny high-tech gadgets account for a hefty chunk of holiday spending, traditional categories are still expected to make up the lion's share, with apparel accounting for more than half of planned holiday purchases, and toys or games just under half at 48 percent. A more modern upstart is the overall winner, however: gift cards, which 59 percent of those surveyed said they planned on buying. Slaven says one particularly tricky segment of gift givers and receivers to target continues to be Millennials. "They are more interested in purchases around experiences," she says. "Like buying a trip, or contributing to one, or something like a massage."
5. Malls lose their luster
It wasn't so long ago that "social commerce" meant shoppers embarking on a pilgrimage to the mall for a days' long holiday spending frenzy. Those planning such an outing stand a good chance of getting a decent parking spot. Slaven says the hardest hit retail channel is expected to be malls, a factor she attributes to the influence of online shopping culture. "The convenience factor of online is trickling down to how customers are shopping in stores," she says. The result is that a whopping 62 percent of survey respondents said their in-store holiday purchases would come from non-mall-based brick and mortar retailers. However, decorations and entertainment at a mall will attract a still-sizeable 38 percent of shoppers. "People still like to go to get in the holiday spirit and take in the sights and sounds."
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