Early holiday promotions might be for naught.
In a study by global strategy and management consulting firm A.T. Kearney, few shoppers intend to start shopping before Thanksgiving, even though holiday promotions are starting earlier and earlier each year.
According to the study, only 21 percent of shoppers said they plan to shop before Thanksgiving. Forty-nine percent said they plan to shop between Nov. 30 and Dec. 18. About 15 percent said they would shop at the last minute, from Dec. 18 to Dec. 25. Of those who said they will shop during Black Friday and on Cyber Monday — 11 percent and 4 percent, respectively — a third of these “sale seekers” also said they plan to spend more this year compared with last year.
Dan Farmer, a principal in the retail practice at A.T. Kearney, said the perception among consumers surveyed suggests that many believe there are better deals later in the shopping season.
“We found that younger teens and Millennials are more responsive to earlier promotions,” Farmer said. Sixty-seven percent of Gen Z and 50 percent of Millennials said in-store is their primary shopping channel, while 79 percent of Gen Z and 69 percent of Millennials said they are likely to shop earlier if promotions start earlier. The same two groups — 72 percent of Gen Z and 70 percent of Millennials — are also more likely to respond to mobile offers from their favorite retailers.
The study also showed that 47 percent of consumers plan to spend the same as last year, with two-thirds using more than one shopping channel, and online shopping creeping closer to in-store as the primary shopping channel. Further, only 36 percent of consumers cite low prices as one of their top three factors in driving purchasing decisions, and 28 percent citing the store, online and mobile experience as one of the top three reasons that determine a purchasing decision. Value-added offers such as loyalty programs and warranties also can influence a purchasing decision, the respondents said.
And while one might think lower gas prices leave more discretionary income on the table for spending, only 22 percent said gas prices would influence their holiday spending this year.
According to Farmer, “What we’re seeing is that consumers over the past four or five years are becoming more conservative.” He noted that when there is the opportunity to pay down debt, consumers have elected to improve their personal balance sheets.
In addition, the survey found that while consumers are open to personalized promotions from their favorite retailers, the merchants have been slow to use personalize mobile offers.
Farmer attributed the costs of investing in technology for the late-in-the-game approach of retailers. While there has been some integration of mobile with the brick-and-mortar experience via beacon technology and near field communication chips, personalization through smartphone apps have been done mostly on a piloted basis whenever there’s been any planned rollout. That could cost retailers hoping to move more aggressively on the omnichannel front.
“Mobile is the last piece of the puzzle for omnichannel. Integration online with brick-and-mortar is more prevalent, [but if retailers] can get better integration with mobile and brick-and-mortar, then a lot of the other initiatives for omnichannel will start to take care of themselves,” Farmer concluded.