A growing number of consumers are planning to hit the Web rather than the road this holiday season, according to a pair of surveys released Monday.
This story first appeared in the November 11, 2008 issue of WWD. Subscribe Today.
A record 71 percent of consumers will do at least some of their holiday shopping on the Internet, up from 66 percent in 2004, according to Deloitte.
The consultancy also said apparel was the second most popular gift-giving category, although the popularity of leaving fashions under the Christmas tree has waned over the past several years. Gift cards are the number-one gift category, with Wal-Mart, Amazon.com and Target the top venues for these cards.
Separately, an Accenture survey found 69 percent of shoppers would cut gas expenditures by making fewer trips to stores, doing more shopping online and visiting areas with more stores this holiday season.
Accenture also found that while 46 percent of shoppers usually brave the crowds on Black Friday, the day after Thanksgiving, only 42 percent are likely to do so this year. Thirty-eight percent of consumers plan to shop late in the season to take advantage of discounts.
Chris Donnelly, partner in Accenture’s retail practice, said the migration to online shopping would continue, even as gas prices fall, because shoppers are looking for deals and finding them online, with added benefits such as free shipping.
“People seem much more committed to staying on budget this year than they have in the past,” Donnelly said. “It’s going to be an interesting game of chicken potentially between the consumers and the retailers. A consumer might go out this year and spend their entire budget pre-Thanksgiving on some very good sales they see. If people really do stay true to their budget, there’s going to be a lot of competition to get those first sales.”
Retail shares fell Monday, giving back nearly all of Friday’s gains, as investors tried to gauge exactly how stores will fare over the next couple of months. The Standard & Poor’s Retail Index slid 2 percent, or 5.58 points, to 268.
Stocks overall rose Monday morning on news of China’s $586 billion stimulus plan, but ended down as investor jitters intensified after the U.S. said it would pump an additional $40 billion into insurer American International Group. The Dow Jones Industrial Average was off 0.8 percent, or 73.27 points for the day to 8,870.54.
Department stores with declining stock values included J.C. Penney Co. Inc., down 10.7 percent to $20.01; Nordstrom Inc., 9.4 percent to $14.04; Macy’s Inc., 9.3 percent to $9.94; Dillard’s Inc., 7.6 percent to $4.27, and Saks Inc., 5.5 percent to $4.67.
Losing out on the specialty store side were Charlotte Russe Holding Corp., off 14.9 percent to $6.45; AnnTaylor Stores Corp., 13.1 percent to $7.99; Aéropostale Inc., 10.7 percent to $17.60; Mothers Work Inc., 10.5 percent to $7.68; New York & Company Inc., 8.8 percent to $2.27, and Urban Outfitters Inc., 8.7 percent to $15.98.
Shares of vendors were also dragged down, with drops registered at Jones Apparel Group, down 8.9 percent to $8.07; the Warnaco Group Inc., 8.7 percent to $16.56; G-III Apparel Group Ltd., 6.9 percent to $11.55; Polo Ralph Lauren Corp., 6.7 percent to $42.75; Phillips-Van Heusen Corp., 5.1 percent to $19.12, and Liz Claiborne Inc., 4 percent to $6.46.
Of course, the online move by shoppers shouldn’t be a problem for retailers with vibrant Internet presences, but stores are finding that they need to take the same care of their customers in the virtual world as they do in their stores.
“Consumers want a seamless multichannel retail experience,” Stacy Janiak, Deloitte’s U.S. retail leader, said. “They want the option of touching and feeling a product in the store and then being able to order it at their convenience, and they don’t want to be told that a product purchased online can’t be returned to a local store.”
Cyberspace was the second most popular holiday shopping destination this year, ranking behind discount department stores, Deloitte said. Twenty-one percent of consumers plan to shop primarily or entirely online this holiday season, up from 19 percent a year ago, the consultancy said.
Research by Deloitte and Accenture found many shoppers to be more cautious and planning to cut back on their holiday budgets.
Accenture said 40 percent of the 537 consumers it surveyed in mid-October would spend less on the holidays. Deloitte found that 59 percent of the 13,276 shoppers it polled in late September and early October planned to reduce their spending. The primary reasons in both cases were higher food and energy prices.