Retailers are readying themselves for the biggest shopping days of the year, beginning this week—and they’re hoping for windfall gains.
That’s because 79 percent of consumers plan to do their shopping over the Thanksgiving period, according to Deloitte’s 2019 Pre-Thanksgiving Pulse Survey. From Thursday’s holiday through Cyber Monday, shoppers are projected to spend an average of $415 per household.
Not surprisingly, e-commerce beats out brick-and-mortar in popularity, but not by a huge margin. While 94 percent of consumers plan to shop online during the five-day period, 87 percent also said they would venture out to shop local retailers in person.
On Black Friday, 70 percent of consumers plan to shop in-store, while only about half (54 percent) plan to shop online. On Cyber Monday, however, those numbers shift dramatically. Nearly three quarters (72 percent) of consumers plan to shop online, while a little over one-third (36 percent) plan to patronize brick-and-mortar merchants.
Black Friday may prove to be the most fruitful in-person shopping day of the week, with 82 percent of respondents saying they’re actively planning to shop in some capacity. However, Deloitte analysts said Cyber Monday could prove to be the busiest overall shopping day, with 73 percent of consumers saying they would be shopping online or in stores. The shopping holiday is projected to account for 40 percent of overall online spend for the week.
Shoppers have been mostly consistent about how much cash they’ve been planning to part with over the Thanksgiving period, with 53 percent of survey respondents saying their spending plans have not changed over the past two months. More than one-third (38 percent), however, have revised their estimates, and now plan to spend more. (Among those respondents, 80 percent said they planned to augment their spending on gifts for others.) Just 9 percent of consumers have decided to tighten their purse strings.
Clothing, shoes and jewelry are at the top of shoppers’ lists this year, with 69 percent saying they’re on the hunt for these items. Over half of consumers (52 percent) have their hearts set on electronics, like computers, smartphones, gaming consoles and wearables, and about the same amount (51 percent) are hoping to score deals on toys and hobby-related products, like books, board games and movies.
Mass merchants stand to win big, with 64 percent of consumers saying they’d be visiting these retailers from Thanksgiving through Cyber Monday. A little over half (54 percent) of shoppers said they would be shopping online throughout the weekend, and nearly one-third (32 percent) said they would be dipping into traditional department stores. Off-price channels are projected to entice 22 percent of consumers, while warehouse membership clubs will bring in a comparable contingent (20 percent). Only 18 percent of shoppers expressed interest in visiting specialty clothing stores over the Thanksgiving holiday weekend and Cyber Monday.
While the overall holiday shopping season is six days shorter than usual this year, Mousumi Behari, digital strategy practice lead at online marketing firm Avionos, said that the time crunch “shouldn’t be an excuse for retailers to post lower earnings during the holidays.”
That’s because consumers are still shopping for others, she said, and “their Christmas lists haven’t gotten shorter because of the narrow shopping window.”
If anything, she said, time-conscious shoppers will now be looking for “effective and convenient methods to ease their shopping experiences.”
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Brick-and-mortar and online retailers should pull out all the stops when it comes to optimizing the consumer experience, she opined, especially during the busiest selling week of the year.
On Black Friday, retailers should ensure that their online deals reflect in-store offerings, she said. Consumers are looking for flexibility in the way they shop, and 71 percent said that brands and retailers are most successful when their online and in-store efforts are strong and streamlined. More than half (65 percent) of online shoppers also expect companies to translate the same information to their brick-and-mortar stores.
When it comes to Cyber Monday, Avionos analysts said retailers would be wise to invest in SEO to increase their exposure online. Roughly one in four shoppers (24 percent) begin their purchasing journeys with Google searches, they said. Meanwhile, more than half (58 percent) of Gen Z shoppers have made a purchase through a social platform in the past year, followed by 53 percent of millennials—a fact that retailers and brands should weigh heavily in their decisions around advertising over the Thanksgiving period.
Brands could stand to strike out if they fail to consider their shoppers’ device preferences, analysts said. The majority (69 percent) said they expect retailers to take their browsing habits into account, and meet them on the platforms where they spend the most time.
Despite retailers’ undoubtedly high sales goals and analysts’ largely favorable projections for shopper spending, consumer confidence has weathered a few dings in recent months.
The Conference Board by Nielsen’s monthly consumer confidence study revealed that consumers’ outlook on the key drivers of economic growth have weakened month over month since August.
The November Index currently stands at 125.5, down from 126.1 during the month of October, analysts reported. Consumer outlook for the current business and labor market conditions decreased from 173.5 to 166.9, but their expectations for the short-term future improved slightly, increasing from 94.5 last month to 97.9 this month.
“Consumer confidence declined for a fourth consecutive month, driven by a softening in consumers’ assessment of current business and employment conditions,” Lynn Franco, senior director of economic indicators at The Conference Board, explained.
While the decline in confidence suggests that economic growth in the final quarter of 2019 will remain weak, consumers’ short-term expectations for growth in 2020 have improved modestly, she said, and that small degree of optimism should reassure retailers.
“Overall, confidence levels are still high and should support solid spending during this holiday season,” Franco asserted.