Compete Blog: Tracking Early Holiday Shoppers
By Debra Miller Arbesman
Through a special arrangement, presented here for
discussion is a summary of a current article from the Compete Blog.
Compete Inc. is a web analytics company that focuses on understanding how consumers
use the internet.
Slowly but surely, consumers are working their way through
their holiday shopping list. The newest Compete Holiday Insights survey finds
that as of Oct. 24, 54 percent of consumers surveyed had started their holiday
shopping for the year and 23 percent had completed more than a quarter of their
total shopping, up from 50 percent and 16 percent, respectively, two weeks
ago. Six percent indicated they had completed all their holiday shopping by
Oct. 24.
Along with the increased shopping activity came increased spending.
Offline spending on holiday items climbed 102 percent for an average of $258
from $128 in the two-weeks ended Oct. 24 prior. Online spending increased 39
percent to $142 on average versus $102 two-weeks prior.
Most categories saw
a lift in purchase activity relative to two-weeks prior. Asked what products
they bought as part of their holiday shopping during the week of Oct. 18-24,
46 percent of shoppers purchased clothing and shoes, up 11 percentage points
from the Oct. 3 to 10 period.
Toys and games ranked a close second with 44
percent, up nine percentage points. Gift cards have become a popular gift item,
with 36 percent of shoppers opting for these stocking stuffers, up from just
6 percent. In other categories, book purchases increased to 29 percent from
24 percent and movies/video games grew to 26 percent from 21 percent. Two categories
saw declines: electronics, 22 percent versus 24 percent; and jewelry/electronics,
14 percent to 19 percent.
Asked which retailers they purchased online from during
the period as part of their holiday shopping, Amazon was far and away the most
mentioned at 53 percent. That was followed by Ebay.com, 18 percent; Walmart.com
and Target.com, both at 12 percent; Overstock.com, nine percent; and Best Buy
and Sears, both at five percent; Macy’s, four percent; JCPenney.com and ToysRus.com,
both three percent; and Kohls.com and Homedepot.com, both at two percent.
Compete’s
findings come as numerous articles have come out showing that at least some
holiday sales are coming out well before Black Friday.
Discussion Questions: Should retailers be promoting holiday sales well before
the traditional Black Friday start of the holiday shopping period? Are retailers
doing enough to capitalize on early holiday shoppers?
More than one major retail chain ran a “Christmas in July” promotion this year, and Christmas decorations are routinely up in stores by mid-September. The age of early holiday promotions is already here, if anything retailers need to ensure they don’t over promote early and burn shoppers out. If current promotional and shopping trends continue, “Black Friday” may turn into the Friday after Columbus Day (in terms of the day retailers traditionally go into the black), with retailers making less money in the 4 weeks before Christmas.
Pre-black Friday sales are happening already since everyone’s trying to get a jump on what most analysts predict will be a “moderate” Christmas for retailers. The most upbeat estimate I’ve heard is 3% in sales. But most see 1-1.5% increase in holiday revenues.
I also think Black Monday–when the online shopping starts in earnest–is a better measure.
The problem with pre-Christmas sales is that consumers know prices will go lower as the holidays get closer.
As to starting holiday promotion early–why discount sales you’re getting anyway? There are lots of reasons people shop early–from wanting to make sure a particular item is available to their fear of Black Friday crowds–but price rarely fits into the VERY early shopping equation.
Of course, this begs the question, when does early shopping begin? I’m tired of Santa already and the Halloween candy just went on sale.
This entire scenario is flawed by the relentless training retailers have done over the years to condition shoppers to either hurry in early or wait until the last minute for the deal price. The industry is tracking patterns it has set all by itself. Yes the pattern will change if retailers move Black Friday to October.
I realize many shoppers must search for deals, and many do it “for sport,” but frankly, I hate to think this is the new “spirit” of giving. That said, I must admit I don’t miss even for one second the panic a parent feels when they realize they waited too long and the prized toy or game is not going to appear under the tree. Huge early blow-out sales on the season’s biggest items only accelerates the panic for scores of shoppers.
Christmas in July is pushing pre-planning to the limit. Hard to imagine those items, especially if they are electronics, staying in the box until December. Michael’s, COSTCO, Walgreens, Rite-Aid, and many others had holiday decorations and sales going on over the last 2 weeks.
Although analysts predict a moderate sales holiday, I am confident we will see a major bump in electronics sales as we approach Black Friday and December 25th. iPads and Android competitors will be a hot ticket this year, not to mention laptops, video games and TVs. Consumers have pent up spending fever and as we get closer to Thanksgiving and Black Friday, that fever is going to turn into actual spending at retail.
Timing is everything and retailers are going to need to time their best promotions carefully so they don’t lose sales to online retailers or their local competitors. Not being out of stock on the hottest items is also going to be key. I have already visited some retailers that are having that issue this early in the game. Not a good sign for how well prepared they will be for the holidays.
One final thought. For those individuals that said in the survey they competed 100% of their holiday shopping by Oct 24th, I find that hard to believe. What this tells me is they are now prepared for impulse shopping and great sale shopping. No one is ever done until the clock hits midnight on December 24th.
This is less a retailer-led shift in holiday shopping behaviors and more a consumer-led shift. Essentially, it’s retailers who are following the consumer’s lead.
E-commerce has long been changing the way consumers view Black Friday, most notably in helping extend what was once a day-long event into a weeks-long event–who needs to wait outside in the 4 AM cold for the store to open when deals can be nabbed online, amid the comforts of home and after dining on Thanksgiving turkey.
What hastened the change in Black Friday shopping behaviors was the recession. Consumers changed their general shopping behaviors by learning to be savvier shoppers. Those behaviors have carried over to gift purchases. It’s called practical gifting (i.e., consumers being more practical in how they spend gifting dollars and more practical in the types of gifts they select). One element of practical gifting is “Unseasonal Shopping,” i.e., shopping for gifts outside the normal November-December time frame. More consumers are doing it as a way to save money, reduce holiday stress and free up time to actually enjoy the holidays.
Holiday 2010 is the “Season of the Savvy Santa.” Consumers have been and are buying gifts as they find deals on the items they want under the tree–especially via online/email promos. The recession taught consumers to be smarter shoppers. Most will not forget those lessons.
Ryan has a good point. The percent of consumers shopping early is small. They obviously have a reason for shopping now and are going to do that whether or not items are on sale. So why create the sales and lose money? What percent of sales are retailers really capturing by starting Christmas sales now? They certainly are training consumers to buy on sale.
But for which holiday are they early…I saw a “Happy X-Mas 2015” display last week.
Seriously though, over promotion has destroyed much of the “specialness” of the season. I’m not sure there’s much left to lose.
Why promote anything? Especially price. For heaven’s sake, let them buy it at regular price! Besides, it looks like Amazon’s doing the most business, which means they’re already promoting whatever it is anyway, as they usually do.
Wouldn’t it be nice to have a profitable holiday season again? Just like the old days of say, 2007? I would say, promote your brand, DON’T promote your prices. Shoot for profit dollars vs. pure volume, see how it feels again. Go ahead, try it, now’s the time!
Consumers have moved from a state of panic last year to a new state of consideration with respect to spending this year. I for one, fully anticipated that consumers would begin shopping earlier in an effort to spread the spend out over more paychecks and also to capitalize on sale opportunities as they arose, instead of competing with the herd on Black Friday.
Consumers will respond to retail brands that express the ability and willingness to actually help them (responsibly) stretch their holiday dollars. Retailers who get out in front with a message of strong over-all value and no hassle returns will have an advantage. Best value doesn’t always mean the lowest absolute price.
Hello out there, Retailers. Hanukkah comes so early this year we will not even get a chance to digest the turkey before lighting the first candle. So surely shopping will begin early this year. We will get a sense of the success of the holiday shopping starting much earlier this year than in previous years.
It seems like the holiday rush begins just a bit earlier each year. That 54% of consumers had begun their holiday shopping as of October 24 is absolutely amazing. But the fact is, the economy has left many shoppers hitting stores earlier out of financial need… shopping early is just one way consumers will make it through this holiday season without going broke.
This article presents many great insights into holiday shopping 2010. To provide full transparency, I work for SymphonyIRI Group, one of the many companies that recently put out a 2010 holiday survey. Our research findings are very much in line with the trends highlighted in this article. There is little doubt that 2010 will go down in the books as a season of practicality. Consumers’ increased focus on items, such as clothes and books, certainly underscore this trend.
SymphonyIRI’s Holiday 2010 work reveals that 49 percent of shoppers plan to purchase functional items, such as clothes, books and items for the home this year. In fact, 24 percent of respondents intend to purchase more functional items this year versus what they purchased in 2009. And a full two-thirds of shoppers will give gift cards, which allow recipients freedom in how and when that money is spent.
For more great information on holiday shopping 2010, I would suggest checking out our blog and holiday survey slideshow.
Happy Holidays!