Are we heading into the most competitive holiday shopping season ever?
We know last year was a little intense, beginning with a Black Friday/Cyber Monday full of deep discounts and winding up with a large percentage of consumers holding out for last second deals. The result was a bloodbath on price tags, as retailers had no choice but to cut prices to keep up.
Deloitte predicts 2014 holiday shopping will increase by 13% over last year, up to around $1300 per household. That’s a good sign for everyone – namely, more money to go around for every business, right? No more deep discounts or fire sales, right?
Not really. According to a USA Today article on the National Retail Federation’s 2014 holiday spending research:
Deals continue to be the driving motivation for holiday shoppers. Sales and discounts were listed as the most important factor influencing their decision to shop at a particular retailer during the holidays by 74.7% of shoppers.
We’ve talked about it before, but more money no longer equals loose purse strings. Frugality is habit now, and much of the population – namely millennials and a large portion of Gen X – has never even seen a robust, free wheelin’ economy.
Deals and discounts will win the next two months. Not branding or even product quality (though that’s the second most-often cited factor, according to the NRF).
Besides offering deep deals, connecting with people at the right time, right place will be retailers’ major opportunity to stand out over the next couple months.
72% of consumers will be using their smartphones in some form or fashion this holiday season. $345 billion is at stake based on these interactions, and the majority of that will be spent in-store.
This means a huge opportunity to make an impact in real-time. Every business has a lot of real estate to influence customer purchasing decisions, from the time a person first searches for a product (PPC ads and mobile-ready landing pages) to when they walk into a physical location (beacon alerts) and even after they complete a purchase (special offers after joining a loyalty program).
We know people are pretty savvy about the brands they do business with 10 months out of the year, weighing in factors like social media recommendations and corporate social responsibility. During holiday season though, all bets are off. People want deals, they know those deals will come at some point, and they’ll act swiftly to grab what they see as a steal.
Don’t doubt for a second that the end winners of the 2014 holidays are the costumers themselves. They’re going to get what they want.
Those who stand to profit the most are the companies that can provide relevant value at the right time and place. That largely means retailers (if they’re smart), but the holidays are also an opportunity for every company out there looking to connect with customers.
These are all recent examples from Access clients:
Also in great position are those with loyalty programs, or a similar method of capturing customers who’ve just completed a transaction and are open to a deeper relationship with a brand.
The bottom line is holiday season is survival of the smartest – there will be winners, and there will be losers. It’s a certainty that customers will win by saving, and the companies who put them in position to save as much as possible – retailers or not – will be the ones who reap the most benefits.