The Accenture Holiday Shopping Survey shows that consumers are expected to spend an average of $582 on holiday shopping this season, and 23% plan to spend more than $750. Moreover, 52% expect to increase their spending by $250 or more. However, only 5% say they expect to be “extravagant” in their holiday shopping, and only 8% said they would “splurge.”
This year’s survey also found that half (52%) of consumers would be willing to shop online on Thanksgiving Day if retailers offer discounts, and 53% plan to shop on Black Friday, which would reverse a three-year trend of declining interest in Black Friday shopping indicated by Accenture’s previous surveys. In 2011, the survey showed that only 44% of respondents were interested in shopping on Black Friday, down from 47% in 2010 and 52% in 2009.
“The U.S. consumer refuses to be counted out and is entering this holiday season better prepared and more willing to open his or her wallet,” said Chris Donnelly, managing director of Accenture’s retail practice. “Self-sacrificing will be down and spending will be slightly up, however, our research also shows that shoppers will remain disciplined in their spending. They will have a desire to maximize the value of their dollar and a hunger for discounts, which will put pressure on retailers’ profits and margins. Retailers need to focus on creating in-store excitement, providing standout products and services, and delivering a seamless experience regardless of which shopping channel the customer uses.”
More Room for 'Showrooming'
The majority of shoppers (56%) say they are likely to participate in “showrooming” this holiday season, which means that after seeing a product in a physical store, they would search online for the best price and then purchase online. And 27% of these same shoppers say they would likely make the purchase online, using their smartphone or tablet, while they are still out shopping.
“Showrooming is a very real phenomenon; however, retailers can compete with, and even beat, the online pure play retailers,” said Donnelly. “Consumers don’t just want to shop online; they want a simple and seamless shopping experience that offers them convenience and value. As recent announcements have shown, some traditional retailers are starting to tackle showrooming head-on this holiday season with tactics such as price matching against their online competitors but they must also strengthen their customer service and product availability in order to really fight back.”
Spending Pressure Eases
Accenture’s survey offers evidence that pressure on consumers’ finances may be easing as fewer people are planning to cut back on spending for themselves (40%, compared to 46% in 2011 and 52% in 2010).
Further, out of the 63% of consumers who expect to spend the same on their holiday shopping this year, the survey indicates a more positive outlook than last year. Nearly a quarter (24%) of those consumers say they are spending the same because living expenses have increased, compared to 34% in 2011. Also, fewer consumers have concerns about the economy (23%, compared to 30% in 2011), and fewer believe that they have less discretionary income this year (30%, compared to 34% in 2011).
At the same time, consumers still have concerns about higher bills hitting their wallets hard; 45% cite high gasoline prices, and 38% mention food prices, as factors that would negatively affect their holiday spending.
Shoppers Are Prepared
The survey shows that shoppers are better prepared for their spending this holiday season than they were in 2011. Half (51%) say they will be paying for their holiday shopping with cash put aside for that purpose, compared to 45% in 2011. And, fewer shoppers plan to use either a major credit card to pay for their holiday purchases this year; 33% in 2012 compared to 47% in 2011. However, 26% of respondents said that the desire not to increase their credit card debt would negatively impact their holiday spending this year.
“The research illustrates a shift in U.S. consumers’ approach to their holiday spending,” said Donnelly. “Many consumers are still struggling to balance their household budgets, at the same time that pay raises and bonuses remain in short supply, and they are realizing that this is not a short-term phenomenon. Consumers will remain resistant to the impulse purchase, and retailers will have to work harder to secure that extra spend by having a unique product, service or experience, and being clear on the value to the customer.”
As a result, discounts and promotions on holiday gift items remain a driver for the vast majority of shoppers, cited by 82% as important, a slight decrease to the 93% who said the same in 2011. Three quarters of respondents (78%) say that at least half of their holiday shopping purchases will be discounted items, and half (50%) will be looking for a discount between 20-40% off the original product price.
“The retail environment is still heavily promotional, and that is the default setting for most retailers,” said Donnelly. “However, the difference this year is how early, and how hard, some retailers have punched the promotion button. Discounts of 30% or more have been available since October 1, and that will set the tone for this season.”
Smartphone Shopping Gains
According to the survey, the use of tablet computers and smartphones to make holiday purchases is on the rise. In fact, 25% of consumers intend to use these devices to buy holiday gifts, compared to 17% in 2011. The top reason cited for using a tablet computer or smartphone for holiday shopping is to compare prices while in a store.
One third (34%) of respondents say that they are likely to shop on “Cyber Monday” – the first Monday after Thanksgiving, which is part of a campaign by retailers to encourage consumers to shop online. Free shipping offered by retailers that day is the key draw for 45% of shoppers, while 40% believe that this is the day to bag the best online deals. However, more than 37%of consumers planning to shop on Cyber Monday are doing so simply to avoid the crowds.
More than half (54%) of shoppers say they would choose to shop online if a retailer offered the same product both online and in a physical store. The desire to avoid crowds is the driver behind this preference for 30% of respondents.
Discount Retailers Are Popular
Discount retailers will remain the most popular destination for the vast majority of U.S. consumers this holiday season, according to the survey. Three quarters (75%) of shoppers say they will be buying gifts at discount retailers, up slightly from 73% in 2011. Online-only retailers are continuing to grow in popularity (44%, compared to 41% in 2011). Nearly 40% of consumers said they will be buying gifts at mainstream department stores, the same proportion as 2011.
One quarter planning to shop between Black Friday and the end of November
Nearly one quarter of U.S. consumers (23%) plan to shop during the period from Black Friday until the end of November, an increase from 19% who said they would shop in that time frame in the 2011 survey.
Almost half (47%) believe that the best discounts will be available on Black Friday or Cyber Monday, whereas 29% expect that they will need to hold out until the week leading up to Christmas in order to get the best holiday bargains.
Holiday shopping lists: gift cards and clothing still at the top, toys and tablets make gains
Apparel (51%) and gift cards (52%, down from 57% in 2011) will be at the top of holiday shopping lists again this year. Kids will also have something to cheer about as 38% of consumers plan to purchase toys. Accenture found that 16% of people will be looking to buy a smartphone or a tablet as a gift this year. Also, 11% of people said they will be giving charity donations as gifts this year.
One quarter of consumers (24%) expect to buy four to six gift cards this year for their friends and relatives. Gift cards from discount retailers were the top choice (36 percent), followed by gift cards from restaurants (25%). More than half (56%) say that they expect to buy a gift card from the retailer where it will be used, while 33 percent said they will also purchase gift cards from the supermarket.
The study also shows a change in how consumers intend to spend their gift cards, with more likely to use the cards to treat themselves to something they would not ordinarily buy (38% vs. 34% in 2011). Fewer consumers say that they are less likely to use gift cards for everyday items (19%, compared to 23% in 2011).
Accenture conducted the online survey in October, using a representative sample of 500 US consumers.