5 Key Consumer Trends in the 2017 Holiday Season

5 Key Consumer Trends in the 2017 Holiday Season

Last month, global market research firm NPD released its findings on consumer purchase intentions in the 2017 holiday season. Drawn from thousands of consumer surveys and detailed checkout tracking (both online and offline), the data reveals five key consumer trends retailers should take into account.

5 Key Consumer Trends in the 2017 Holiday Season

Shoppers Will Spend More AND Buy More Frequently Online

E-commerce continues to outpace traditional, brick-and-mortar retailers when it comes to holiday shopping. In the fourth quarter of 2016, the frequency of online purchases jumped 12 percent, while brick-and-mortar purchase frequency dropped 4 percent from the prior year. NPD expects the trend to continue in 2017.

Not only are Americans making a higher number of their holiday purchases online, but those who opt to buy online plan to dig deeper into their wallets than their in-store counterparts. Consumers who plan to shop online are prepared to spend an average of $793 this holiday season — almost 70 percent more than brick-and-mortar shoppers, who plan to be only $467 lighter at the end of the day.

However, not all traditional retailers are being eclipsed by digital competition. The NPD report points out the Beauty category, which includes makeup, fragrances, and skincare products, is one of few to experience growth in purchase frequency in 2017. Stores like Sephora and Ulta Beauty thrive through brand exclusivity, offering products shoppers can’t find elsewhere, while keeping an ear to emerging beauty trends on platforms like Instagram.

Online-Only Stores Have Become the First Stop for Holiday Shopping

In its early days, e-commerce was mostly regarded as a back-up plan for holiday shoppers — an alternative for when products were sold out or unavailable in brick-and-mortar stores. Not anymore.

In 2017, a majority of American consumers plan to start holiday shopping at e-commerce sites such as Amazon, ebay, and Etsy. Many consumers head straight to online stores, or scope out potential purchases at a brick-and-mortar store before going online to find the best price.

Shoppers across generations are increasingly drawn to e-commerce as a primary shopping destination. Generational difference in this regard is shrinking, reports NPD, though Millennial and Gen X shoppers are still most likely to shop online.

The Internet has given consumers more choice than ever, but as stated in the report, the increase in competition has generated more online ‘noise’ for shoppers to sort through. This creates an opportunity for retailers to emphasize value consumers can’t find online.

Experiential Gifting is On the Rise

Not all gifts fit neatly into a box. Many holiday shoppers are eschewing material items in favour of ‘experiential’ gifts, like a day at the spa, event tickets, or an upscale dinner for two. Experiential gifts are increasingly seen to have a greater impact than traditional gifts, and they’re growing in popularity with holiday shoppers.

A notable subgenre of the experiential gift is the subscription box. Subscription companies have grown substantially since 2014, particularly in the beauty, food, and apparel categories. According to NPD, 7 percent of holiday shoppers plan to give a subscription box as a gift this year, representing another win for e-commerce.

Black Friday is Losing Its Shine

Once the apex of holiday shopping, Black Friday has been on decline in the United States for the past several years. Black Friday sales and shopper traffic in brick-and-mortar stores declined in 2015 and again in 2016, and there are no signs backtracking on the trend in 2017.

It’s not that people are waiting until December to start their holiday shopping. Nearly 30 percent of consumers still plan to shop for gifts during the week of American Thanksgiving, but fewer consumers are choosing to ‘save’ their big purchases for Black Friday, instead choosing to shop online throughout the week.

But retailers aren’t finished with Black Friday yet. In response, many brick-and-mortar stores are turning Black Friday into a week-long event, advertising in-store exclusive offers through online channels.

Value Beats Price in Consumer Purchase Decisions

An overarching theme of this report, as NPD’s chief industry analyst Marshal Cohen points out, is the importance of value. Value comes out ahead of all other reasons for consumer purchases, including price, and it’s more significant than ever in the 2017 shopping season.

Today, consumers can instantly compare one seller’s price to that of another, and price matching is standard among the biggest retail players. Keeping pace on price is a losing battle. To stand from the competition, retailers have to promise (and deliver) additional value to consumers.

For e-commerce platforms, value often comes in the form of free shipping and bonus features, such as Amazon Prime. For brick-and-mortar stores, it can be exclusive products and brands, standout customer service, or an extraordinary shopping experience.

Image: tuthelens

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.