Holiday Shopping To Decrease 7.5%

October 7, 2014

The 2014 holiday shopping season will be characterized by cautious spending, while economic realities create one of two American holiday shoppers – survivalists and selectionists – according to a new report released from PricewaterhouseCoopers U.S. and Strategy, titled “2014 Holiday Outlook: Top trends, consumer behaviors and implications for retailers.”

The report was based on a survey of more than 2,000 shoppers nationwide and was far different from the National Retail Federation’s bullish seasonal spending forecast.

“The upcoming holiday shopping season will look very similar to 2013 as shoppers remain cautious on the economy and are concerned about disposable income, the rising cost of living and insufficient salary, leading surveyed participants to project an average household spend of $684, down from $753 in 2013,” stated Steven Barr, PwC’s U.S. retail and consumer practice leader.  “The spending divide among shoppers is widening, creating two distinct groups that we are tracking – survivalists and selectionists – and retailers must cater to both segments.  And with shoppers coming to expect a seamless omnichannel experience, deals to woo them into stores and having no tolerance for another season of data privacy invasion, it’s a complex retail landscape that retailers need to master – or they risk losing loyal shoppers.”

10 trends are expected to drive the 2014 holiday shopping season:

1. Shoppers express strong overall concerns about holiday shopping, as they remain cautious on the economy with 72% believing a same or worse environment when compared to the year before.
2. The 2014 holiday shopper is segmenting into two distinct groups: survivalists – those making under $50,000 per year, representing 67% of American shoppers; and selectionists – those making more than $50,000 per year, representing 33% of American shoppers.
3. Spending drivers are clearer than ever this holiday season, with as many as 84% of shoppers citing best practices as the main reason for choosing a place to purchase gifts (up from 74% in 2013).
4. Expect more channel fragmentation as shoppers budget for not only dollars, but their time.
5. It will be important to understand the cash/credit position of shoppers during the entire season.
6. The 3 S’s of shopping – searching, showrooming and selection – have become permanent.
7. Shoppers are clear about what they will spend their holiday dollars on, making it critical for retailers to differentiate within those categories.
8. Shoppers recognize that experiences are beginning to count just as much, or more, than gifts.
9. Shoppers plan to shop at multiple stores as well as websites.
10. Retailers have significantly upped their game in planning for and investing in improved in-store and omnichannel experiences.

“With consumers having even higher demands for their shopping experience – no matter the channel – we conducted this survey to better understand how retailers can meet the needs of their shopping habits this holiday season,” Barr said.  “What we learned was that to compete effectively at retail this year, it demands a new level of organizational and operational excellence.”

Source: Retailing Today