Holiday shopping trends: Making a list and checking-in twice
With the holiday season underway, retailers are experimenting with new ways to capture the imagination and attention of consumers.
- December 2012
- By Nora Aufreiter and Brian Gregg
With the holiday shopping season in full swing, we’re on the look out for a potent array of shopping innovations that shoppers are demanding. The National Retail Federation predicts that 16 percent of this year’s $586 billion holiday purchases will be made via web or mobile devices. And this is growing rapidly. PayPal recently reported that global mobile shopping over the Thanksgiving period more than doubled. Shopping behaviors are changing, and retailers are reacting. Quickly.
We’re already seeing brick-and-mortar retailers rolling out technology-enabled offers to lure discretionary spenders to their stores. With so much at stake, retailers are seizing this four-week shopping season to unveil new approaches and evaluate their effectiveness. Remember last year when Amazon introduced its price check app? The app allowed users to scan barcodes to compare pricing and then offered a 5 percent discount on the product if the user bought it, and helped make “showrooming” a bona fide retail reality.
What will this year’s shopping season have in store? Here are some of the things we’re anticipating:
- Showrooming, the sequel”: Brick-and-mortar strikes back. Showrooming – the practice of visiting a store to research products and prices, but then buying the product online from another seller – was the big story last year. This year, we expect retailers will strike back. Best Buy and many other retailers are battling head-on by matching Amazon and other online retailers’ prices to capture more in-store sales. Even non-retailers like PayPal are getting into the game. If consumers use their PayPal account to pay for a product and then they find it at a lower price within 30 days, the difference will be refunded up to $250 on a single item.
- Mobile shopping goes local. Mobile apps have become the proverbial Swiss Army Knife of shopping, helping consumers shop a dozen times a day rather than 2-3 times per week. Whether it’s to find deals, use rewards programs, calculate discounts, organize gift lists, or manage holiday budgets, mobile is a full-fledged reality. According to PriceGrabber, 82% of consumers plan to use mobile apps to save money when purchasing holiday gifts this year. Expect to see a barrage of new retail apps, mobile-only deals, and locally-inspired offers that pop-up on your device when you pass a favorite store. As just one example, eBay developed a geo-fence for hundreds of Macy’s stores, creating a virtual perimeter around real-world stores. The app can sense when a customer enters a store, and send a deal every five minutes while they remain in the store.
- In-store digital shopping. Some brick-and-mortars are looking to retain in-store sales by enhancing – and simplifying – in-store shopping. Many more retailers will be augmenting service and offering the flexibility of checkout in the aisles by providing iphones or ipads to their sales associates. Lowe’s has given iPhones to all 42,000 employees, and other retailers are using these tools to efficiently handle price checks, manage repricing, and enable on-the-spot transactions. At Walmart, QR codes next to 3D toy graphics allow holiday shoppers to scan and make a purchase directly and receive free shipping. Many brick & mortar stores are enhancing their service offering with “click and collect” pick-up counters in stores exclusively for purchases made online. Toys R Us is experimenting with this format, allowing shoppers who buy online to bypass lines when retrieving their item at dedicated pick-up kiosks. UK retailer, New Look, has launched a concept store featuring specialized window displays for the Kelly Brook cosmetic range. Customers download an app that allows them scan displays to virtually try various nail varnish colors, share it with friends, and have their photo taken with Kelly.
- Social shopping, the next generation. A few new retail approaches could take off this December in the social space; some allowing for givers and receivers to collaborate to ensure they given the gift most wanted. Facebook recently introduced Facebook Gifts, which hits all the hot buttons of simple gift giving: it’s fast, easy, and customizable. The twist is that the recipients are notified of the gift before it ships, and they can then specify preferences like size and color, or even select a different item. With 900+ million active users, Facebook may use social gift giving as a way to carve out a niche among online retail giants. Other social commerce tools also enable retailers to target users’ gift lists for friends and family through wish lists. Pinterest, for example, is looking to become a major holiday shopping hub this season, by allowing users to create pin-board wish lists for Christmas. Could this be the beginning of an era with a perfect match of wants and gets? That could please recipients and retailers alike.
- Flash sales turn the heat up. With the uncertain economy still weighing heavily on the minds of shoppers, time-based flash sales offer steep discounts for both online and offline shoppers. But don’t assume this deep-discount format will remain in the hands of its early pioneers, such as Gilt Groupe, and One Kings Lane This time-based approach has moved into mainstream retailers and retail items. Amazon recently announced a series of flash sales for its “2012 Holiday Toy List,” offering short-term sales on a limited number of popular toys in November. Not to be outdone, brick-and-mortar retailers are hosting flash sales of their own. Neiman Marcus calls its sale “Midday Dash” and offers two-hour discounts of up to 50 percent off select merchandise. We also expect to see retailers offer the online equivalent of “door-buster sales,” which involve steep discounts on select items, intended to draw shoppers to their sites and keep them from migrating elsewhere.
- Pop-ups go viral. Holiday pop-up shops have typically had a prominent place in the seasonal marketing mix. For retailers, pop ups shops combine traditional marketing with the excitement of a live event, enticing customers to interact with the brand and experience new products. This year, pop-ups are more mainstream than ever, touching some unexpected players. Microsoft is set to open 30 holiday pop-up stores to showcase the new Surface tablet and Windows 8. GameStop is launching 80 GameStop Kids holiday pop-up stores, providing ideas for quick stocking stuffers. Walmart and Mattel joined forces to create a pop-up virtual holiday toy store in a high traffic area of Toronto. The king of holiday retailing, Toys R Us, is partnering with Macy’s to operate 24 in-store pop-up stores, which will quietly disappear right after the holidays.
- Time for digital wallets to pay. This holiday season is likely to usher in an expansion of so-called “digital wallet” offers, developing long-promised mobile payment capabilities. Starbucks, for example, has announced that customers will be able to pay for their purchases using the “wallet” offered by Square. Google and PayPal are also in the mobile payment space, as are a number of national wireless carriers, retailers, and financial institutions. Thus far, mobile payments appear to be gaining more traction in news headlines than in physical stores, but this holiday season could offer a “big bang,” with consumers given new incentives (read: rewards) to pay with their phones.
Obviously there is no guarantee that any of these experimentation will succeed. But inculcating this spirit of innovation – and learning from it – is critical for retailers looking to harness the next era of growth.
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