Holiday Shopping Trends 2012 - The Buntin Group

OVERVIEW
Much has been written about predicted and continuing-to-evolve trends for the 2012
holiday retail shopping world. What is common across all is the fundamental
unpredictability of consumer behavior and the battle taking place among retailers to be
in the right place with the right message and deal to capture available dollars.
• Experts predicted higher consumer spending during the holidays, and retailers have
initiated innovative actions to lock down retail sales from tech-savvy and post-
recession shoppers.
• Most evident is broader incorporation of technology into the shopping
experience — a two-way street between retailers and the ever-demanding consumer,
who is taking advantage of every opportunity, controlling where and how they buy.
• However, retailers are expected to compete on price first and foremost through
delivery of engaging deals and discounts if they want to capture the attention of the
modern-day thrifty shopper.
• As consumer priorities have shifted, loyalty to specific retailers has eroded.
Consumers want transparency, convenience and efficiency in every
interaction. And, they want to feel empowered by mobile technology, appreciated by
the stores they shop in and most of all, have access to great holiday deals.
• Critical for all retailers is providing an environment that enables a “consumer win.”
By giving shoppers more control and accessibility, retailers are renewing — and
feeding — consumer excitement about holiday shopping.

2 | 2012 Holiday Shopping Trends | December 2012

INCREASED SPENDING FUELED BY
DEALS & DISCOUNTS

Increased Holiday Spending
Holiday sales are expected to increase in 2012, but many post-
recession shoppers will still be “thrifting” — religiously seeking the
best deal/lowest price for top merchandise.
• Consumer confidence in November
was 73.7, the highest in 5 years, up
from 61.3 in August. 2012
• Lower unemployment (7.9% as of 2011
Oct. 2012 vs. 9.0% in Oct. 2011).
• Housing market improvement
(value and sales).

*Estimated
The Conference Board Consumer Confidence
Index, November 2012 Bureau of Labor Statistics, October National Retail Federation (NRF) Holiday Shopping 2012
2012


DEALS & DISCOUNTS
(continued)

Deep Discounting
According to a 2012 National Retail Federation (NRF)
study, the most important factor driving consumer store
choice will be the availability of sales and discounts.
• JCPenney, which has implemented a no-couponing, everyday low
pricing model, has seen decreasing sales and a drop in brand
preference.
• Target, which announced in early September that they were going
to avoid deep discounting, has already reversed this with new holiday
policies that include a price-matching program and an announcement
that they will be “exceptionally competitive on price” during the
holidays.
SOCIAL MEDIA DISCOUNTS
of consumers expect Facebook users are taking

73%
to find great deals advantage of special discounts, or
this holiday “flash deals,” by liking Facebook
season, up 18% pages such as Kohl’s and
from last year. 75% use Facebook Walmart.
to find discounts
Booz & Co. Holiday Retail Outlook 2012 LivePerson Holiday eCommerce Survey 2012


DEALS & DISCOUNTS
(continued)

Free/Discounted Shipping
Free shipping has become more of a
necessity for retailers to compete.
Deloitte’s 2012 Annual Holiday
Survey found that consumers are
56% more likely to buy from a store
that offers free shipping and free
returns.
• Walmart now offers a $10 flat rate for
same-day shipping, challenging
Amazon’s starting price of $8.99 + $0.99
per item for same day.
• Shop.org’s Pre-Holiday Merchant 2012 of retailers
30% will offer free
shipping
Survey says that 90% of retailers plan without
to offer some form of free 90% conditions

shipping, and 30% will offer free of retailers will offer
some type of free
shipping without conditions. shipping


CONSUMERS WIN WITH EVOLVED
SHOPPING POLICIES/TOOLS

Early Holiday Shopping
Holiday Shopping Before November
Holiday shopping starts earlier and
earlier every year, a combination of 42%
stated consumer intent, as well as 41.4%

retailers that continue to push the 41%
timing of deals earlier during the
shopping season. 40%

• Many stores like Walmart started Black 39%
38.9%

Friday deals on Thanksgiving, with hourly
deals and an in-stock guarantee on 38%
popular items.
• While some stores began offering Black 37%

Friday deals online, other stores such as 2011 2012

Kohl’s and Sears started Black Friday NRF Holiday Survey, 2012

sales 2-5 days in advance.
Holiday shoppers are continuing to
shop earlier and earlier every year.


(continued)

Price Matching
Retailers have embraced price matching and are even facilitating price
comparisons to combat consumer use of smartphones to find the best price.
Because of increased online retailer penetration in holiday shopping, many
brick-and-mortar retailers have established price-matching programs to
increase foot traffic.
• Best Buy changed its price-matching policy to include all
competitors, specifically targeting Amazon. In the
past, Best Buy excluded price matching of online retailers.
• Target stores will match online pricing for identical items
at competing sites such as
toysrus.com, walmart.com, and amazon.com. Customers
can show the item on a smartphone or simply ask
customer service to look it up.
• Ebay’s PayPal unit is offering cash back for any price
discrepancies discovered by consumers on products
purchased using PayPal.


(continued)

Layaways
Retailers made adjustments to their layaway programs to lock in customers
before their competitors and to eliminate negative opinions about hidden fees
that some customers have experienced in the past.
• Walmart offered early layaway access for those who “like” their Facebook page. They
also reduced the layaway fee from $15 to $5, which is then refunded with a Walmart
gift card.
• Fred’s Dollar Stores now offers a $1 layaway fee, which has resulted in a major
increase in layaway traffic for this retailer.

Shoppers Shoppers
Who Used 12% 43% Who Were
Layaway First-
Timers

NRF BIGInsight 2012 Black Friday Weekend Results


CONSUMERS & RETAILERS
EMBRACING TECHNOLOGY

Retailer Mobile Integration
The increase in consumer mobile phone shopping is old news.
However, retailers are increasingly using mobile devices to improve the
overall in-store experience.
• Macy’s sales reps are carrying tablets
to help answer questions and check
inventory to help capture a sale.
• Target has added in-store QR codes to
the top 20 toys, so that if an item is
sold out in stores, it can be instantly
purchased online.
• Walmart has upgraded its app, so
shoppers can more easily access
deals, items on their shopping list and
gift suggestions.


(continued)

Consumer Showrooming
Continuing from last year, consumers are using their smartphones to compare
pricing, read product reviews and research different products.

• 55% of shoppers plan to use a
smartphone or tablet to shop this year.
• 53% of shoppers expect to research
holiday purchases online more than in
37.9% 2011.
• Last year, Amazon sparked outrage
among retailers after offering its price
comparison smartphone app, Price
Check, which compares retail prices with
Amazon prices through barcode scans.

Prosper Mobile Insights Survey, 2012


(continued)

Consumer Social & Digital Usage
Social and online shopping, along with the use of multiple tech devices, is
giving consumers increased control and flexibility in how and where they buy.
• Holiday shoppers plan on shopping online 11% more than last year.
• Nearly 40% of Americans will use social media to interact with brands this holiday.
• 30% of traffic to apparel sites is coming from Pinterest.

64% 53%

Tablet owners plan to use their devices
73% use Pinterest 70% use Twitter to more than smartphone users to research &
to research ideas read reviews purchase gifts, décor & other holiday items.

LivePerson Holiday eCommerce Survey 2012 NRF Holiday Survey, 2012


BLACK FRIDAY/WEEKEND RESULTS
SHOWING SUCCESS

DISCOUNT WEEKEND DISCOUNT WEEKEND
ONLINE SALES MOBILE SHOPPING

30%
24.0%
25%

20%
14.2%
15%

10%
5.3%
5%

0%
 21% from 2011  30% from 2011
2010 2011 2012
IBM Digital Analytics NRF BIGInsight 2012 Black
Benchmark Friday Weekend Results

Online retail sales saw massive increases throughout the holiday discount
weekend. Mobile traffic increased 69% from last year, with the majority of
mobile shopping coming from iPads (41%) and iPhones (36%).


SHOWING SUCCESS
(continued)

% of Shoppers That Were in Stores by Midnight on Black Friday

2011 24.4%

2012 28.0%

BLACK FRIDAY SHOPPING Brick-and-Mortar

Almost 15% more shoppers
were at stores by midnight on
Black Friday than last year.

ShopperTrak Black Friday Sales 2012


SHOWING SUCCESS
(continued)

44%
of Americans shopped
during the holiday discount
weekend.

Black Friday foot
traffic was up 3.5%.
While total holiday 80%
spending is expected to of shoppers took advantage
increase, overall retail of retailers’ promotions by
sales were down 1.8%. purchasing non-gift items.

ShopperTrak Black Friday Sales 2012 NRF BIGInsight 2012 Black Friday Weekend Results


Holiday Shopping Trends 2012 - The Buntin Group

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