2016 pre-Thanksgiving retail pulse survey: What will retailers be thankful for this year?

1. 2016 pre-Thanksgiving pulse survey An update on the holiday season

2. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 2 Executive Summary • Midway through the holiday season, most shoppers are bullish on spending. Eighty five percent forecast they will spend the same or more than they predicted at the outset of the season. • Four in 10 holiday shoppers have not yet started their holiday shopping, and most are not very far down their lists. Eighty percent of holiday gift spending is expected to happen over the remaining weeks of the season. • Three quarters plan to shop during the upcoming holiday weekend, with a fairly even mix of online versus offline shopping across the period. • Shoppers plan to spend more this holiday weekend than they intended last year, and average spend is estimated at $400. • Thanksgiving Day will be among the lightest shopping days of the holiday weekend. Still, roughly 1 in 5 plan to shop on Thanksgiving, with online shopping slightly outpacing in-store. • A significant portion of shoppers plan to be out on Black Friday, but online shopping almost rivals that in store, as most consumers are convinced they will find similar deals in both channels. • Activity between Saturday and Cyber Monday will remain relatively strong, particularly in-store shopping on Saturday, which will be driven in part by support for local businesses (42%). • Cyber Monday will mark the peak for online holiday shopping (74%).

3. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 3 Contents Holiday spending: A mid-season check up 4 Peak shopping days: Thanksgiving Day through Cyber Monday 7 Research: How holiday shoppers are gathering information 17

5. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 5 Midway through the holiday season, most shoppers are bullish on spending. Almost one-third (32%) plan to spend more than they originally planned, and this extra spending will most often be directed toward gifts. Expect to spend more, 32% Expect to spend less, 15% Expect to spend the same, 54% How do your holiday spending plans compare to just a month or two ago? On what will shoppers spend more? 83% 42% 41% 36% 27% 24% Gifts Entertaining at home Gift cards/gift certificates Socializing away from home Non-gift clothing for yourself or family Home/holiday furnishings [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] Saving more Paying down debt Personal household finances worse Due to values/beliefs Will take advantage of sales Why do they plan to spend less? (Among 15% who plan to spend less) “How do your overall holiday spending plans compare to just a month or two ago?” N=1223 “On which of the following holiday purchases do you believe you will spend more?” n= 385 “What are the reasons why you plan to spend less?” n= 179

6. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 6 Four in 10 holiday shoppers have not yet started their holiday shopping, and most are not very far down their lists. Eighty percent of holiday gift spending is expected to happen over the remaining weeks of the season. 35% 13% 14% 18% 21% 1-10% 11-20% 21-30% 31-50% >50% % of shopping completed (Among shoppers who have started) 80% of gift spending is yet to come 40% shoppers have not started their holiday shopping “How much of your holiday gift spending have you completed to date for the December holidays?”

8. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 8 Three quarters plan to shop during the upcoming holiday weekend, with a fairly even mix of online versus offline shopping. “Do you expect to do any shopping for the December holiday(s) either online or in stores over the Thanksgiving period – including Thanksgiving Thursday through the following Monday?” Plan to shop during Thanksgiving weekend (Thanksgiving Day through Cyber Monday) 76% YesNo 84% plan to shop in store 87% plan to shop online Among shoppers who plan to shop… (Thanksgiving Day through Cyber Monday)

9. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 9 Shoppers plan to spend more this holiday weekend than they intended last year, and average spend is estimated at $400. Online spending is expected to outpace in-store spending slightly over the course of the five day period. Online/offline spending during Thanksgiving weekend 51% 46% 3% Online In-Store Catalogue “Percentage of your spending during the Thanksgiving weekend - channel wise” n= 926 $400 (+31 vs 2015) Average planned spending (Thanksgiving Thursday through Cyber Monday) $205 $185 $10

10. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 10 “On what days do you expect to shop in stores?” n= 778; “On what days do you expect to shop online?” n= 808 Shopping participation across online and in-store channels will ebb and flow throughout the Thanksgiving weekend, peaking on Black Friday and rising to near Black Friday levels on Cyber Monday. 37% 79% 59% 42% 71% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Thanksgiving Black Friday Saturday Sunday Cyber Monday Plan to shop online or in store ‫‏‬(Among 76% shopping throughout Thanksgiving weekend)

11. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 11 69% 39% 32% 25% 21% Do not want to miss the best deals Enjoy shopping with family and friends Part of my Thanksgiving ritual After Thanksgiving celebration, it's something/somewhere to do/go To avoid the crowds or the experience of Black Friday Why shoppers plan to shop in store on Thanksgiving Thursday ‫‏‬(Among 22% shopping in stores on Thanksgiving Day) “On what days do you expect to shop in stores/Online?” n=778/807 “Why will you be shopping in stores on Thanksgiving Thursday?” n= 173 “Using a scale of 1 through 5, where 1 means you “Strongly disagree” and 5 means you “Strongly agree”, please state how much you agree with the following:” Thanksgiving Day will be among the lightest shopping days of the holiday weekend. Still, roughly 1 in 5 plan to shop on Thanksgiving, with online shopping slightly outpacing in-store. Thanksgiving Day shopping is largely driven by deals. Thanksgiving Day Shopping 22% In-Store Vs. 31% Online ‫‏‬(Among in-store weekend shoppers) ‫‏‬(Among online weekend shoppers)

12. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 12 “On what days do you expect to shop in stores/Online?” n=778/807 “Why will you be shopping in stores on Thanksgiving Thursday?” n= 173 “Using a scale of 1 through 5, where 1 means you “Strongly disagree” and 5 means you “Strongly agree”, please state how much you agree with the following:” ‫‏‬What time do you expect to go to the store? ‫‏‬(Among 22% shopping in stores on Thanksgiving Day) Sentiment around shopping on Thanksgiving Day is largely negative, with 7 in 10 disagreeing with stores being open. The majority of Thanksgiving Day shoppers plan to visit stores in the late afternoon and evening, with a spike at 6pm. ‫‏‬Attitudes toward shopping on Thanksgiving ‫‏‬(Among all shoppers) 69% 67% 42% 23% 14% I won’t be motivated to shop on Thanksgiving Day this year because it’s an important holiday to spend with family and friends I disagree with stores being open on Thanksgiving I will wait to shop with their preferred retailer(s) if they aren’t open I feel more loyal to retailers who close on Thanksgiving I feel loyal to retailers that are open on Thursday and allow them to shop Thanksgiving Day Shopping 22% In-Store Vs. 31% Online ‫‏‬(Among in-store weekend shoppers) ‫‏‬(Among online weekend shoppers) 9% 4% 21% 25% 24% 16% Unsure 11 PM or later 07:00 to 10 PM 06:00 PM 03:00 to 05:00 PM Before 3 PM Prime Time 70%

13. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 13 86% 28% 27% 25% 21% Take advantage of best sales or deals of the season Enjoy shopping with family and friends Overall excitement of the day Part of my Black Friday ritual Store shopping is preferred over online Why shoppers plan to shop in store on Black Friday ‫‏‬(Among 69% shopping in stores on Friday) “On what days do you expect to shop in stores/Online?” n=778/807 “Why will you be shopping in stores on Black Friday?” n= 535 “Using a scale of 1 through 5, where 1 means you “Strongly disagree” and 5 means you “Strongly agree”, please state how much you agree with the following:” A significant portion of shoppers plan to be out on Black Friday, but online shopping almost rivals that in store. The overwhelming majority of shoppers believe retailers offer comparable deals both online and in store. Black Friday Shopping 69% In-Store Vs. 55% Online ‫‏‬(Among in-store weekend shoppers) ‫‏‬(Among online weekend shoppers) 71% Often find retailers offer comparable deals online and in stores during the Thanksgiving weekend

14. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 14 16% 0% 19% 24% 12% 15% 14% Unsure 10 AM or later 07:00 to 09:00 AM 06:00 AM 01:00 to 05:00 AM Midnight “On what days do you expect to shop in stores/Online?” n=778/807 “Why will you be shopping in stores on Black Friday?” n= 535 “Using a scale of 1 through 5, where 1 means you “Strongly disagree” and 5 means you “Strongly agree”, please state how much you agree with the following:” When shoppers plan to shop on Black Friday ‫‏‬(Among 69% shopping in stores on Black Friday) Half of shoppers think they can find the best deals of the season on Black Friday. Those who go in store (versus shopping online) have a mix of strategies – some hit the stores at midnight while the majority head out first thing in the morning. Is this up/flat/down to last year? Black Friday Shopping 69% In-Store Vs. 55% Online ‫‏‬(Among in-store weekend shoppers) ‫‏‬(Among online weekend shoppers) ‫‏‬Attitudes toward shopping on Black Friday ‫‏‬(Among all shoppers) 56% 49% 37% 27% 25% I plan to take advantage of early Black Friday deals online The best deals of the season are on Black Friday The Black Friday deals are not as good as they used to be Black Friday deals are better than they used to be I expect retailers will offer better deals online than in the store on Black Friday 55%

15. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 15 “On what days do you expect to shop in stores/Online?” n=778/807 “Using a scale of 1 through 5, where 1 means you “Strongly disagree” and 5 means you “Strongly agree”, please state how much you agree with the following:” Activity between Saturday and Cyber Monday will remain relatively strong, particularly in-store shopping on Saturday, which will be driven in part by support for local businesses. Cyber Monday will mark the peak for online shopping. Saturday Shopping 53% In-Store Vs. 36% Online ‫‏‬(Among in-store weekend shoppers) ‫‏‬(Among online weekend shoppers) 42% plan to shop on Saturday in support of local businesses Sunday Shopping 32% In-Store Vs. 30% Online ‫‏‬(Among in-store weekend shoppers) ‫‏‬(Among online weekend shoppers) Cyber Monday Shopping 42% In-Store Vs. 74% Online ‫‏‬(Among in-store weekend shoppers) ‫‏‬(Among online weekend shoppers)

16. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 16 42% 32% 53% 69% 22% Cyber Monday Sunday Saturday Black Friday Thanksgiving Day 74% 30% 36% 55% 31% Cyber Monday Sunday Saturday Black Friday Thanksgiving Day 84% plan to shop in store 87% plan to shop online 29% like to connect to retailer’s Wi-Fi while shopping in store “On what days do you expect to shop in stores?” n= 778; “On what days do you expect to shop online?” n= 808 “Using a scale of 1 through 5, where 1 means you “Strongly disagree” and 5 means you “Strongly agree”, please state how much you agree with the following” Online and in-store shopping will vie for importance this holiday weekend. Cyber Monday is the only day when online shopping is expected to take a commanding lead over in-store shopping.

17. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 17 55% Plan to complete online holiday purchases early this year to avoid shipping delays 28% Will likely purchase earlier in the holiday season because of concerns that merchandise may run out 40% Are likely to purchase later in the holiday season because they anticipate better promotions “Using a scale of 1 through 5, where 1 means you “Strongly disagree” and 5 means you “Strongly agree”, please state how much you agree with the following:” Percent of respondents who agree/strongly agree Shoppers are mixed on the value of shopping earlier versus later in the season, with a small majority citing potential shipping delays as a compelling reason to shop early

19. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 19 Where shoppers expect to obtain information about Thanksgiving weekend 58% 57% 36% 34% 31% 26% 20% 18% 17% 11% Websites dedicated to featuring Black Friday deals Retailer websites Newspapers Mailers/flyers Email TV or radio commercials Social media sites In retailers' stores Mobile device Other websites Digital medium Traditional medium “Where do you expect to obtain information about Thanksgiving weekend?” n= 926 The Internet is the go-to source for information about Thanksgiving weekend shopping, but print media will still play a role in the season.

20. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 20 Time spent researching deals 3% 28% 51% 14% 5% 0 hours Less than 1 hour 1-2 hours 3-5 hours More than 5 hours +15 vs 2015 69% “How much time would you say you spend researching on these deals (before visiting retailer or retail website, or, before making a purchase)?” n= 926 “Do you expect to shop together with other family members or friends in stores over the Thanksgiving period?” n= 778 “How many different (physical) retail stores are you planning on visiting in person over the Thanksgiving period?” n=778 4.2 — average number of venues consumers expect to shop 62% — of in-store shoppers plan to go with their family or friends Shoppers will invest a significant amount of time into researching deals before the holiday weekend. Nearly 7 in 10 plan to spend an hour or more researching before making a purchase.

21. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 21 Webrooming is expected to be more popular than showrooming during the Thanksgiving shopping weekend. Showrooming … first go to a store to look for an item, then search online for the best price, and then purchase online 44% Webrooming … first look at items online, then go to a store to see the item, then make purchase at store 63% Omni-channel shopping behavior “I plan to research online before shopping in stores on the Thanksgiving weekend” n=926 “I plan to research products in the store before buying them online over the Thanksgiving weekend” n=926 Percent of respondents who agree/strongly agree

22. 2016 Pre-Thanksgiving pulse surveyCopyright © 2016 Deloitte Development LLC. All rights reserved. 22 About the survey This survey was commissioned by Deloitte and conducted online by an independent research company between November 9 – 14, 2016. It polled a national sample of 1,223 adults (age 18+) who plan to shop during the holiday season and has a margin of error for the entire sample of plus or minus three percentage points. As used in this document, “Deloitte” refers to Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.