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Wednesday, January 4, 2017

Double-digit growth in 2016 holiday spend

Incoming reports on the post-holiday season show double-digit growth in all areas of retail, from mom-and-pop merchants to the world's largest retail brands. Analysts attribute consumer confidence among key demographic groups and omnichannel marketing campaigns as key drivers of increased holiday spend. Consumers are increasingly using technology to augment, but not replace, the brick-and-mortar shopping experience, experts noted.

"Consumer confidence continued to improve into December, and we saw this optimism reflected in the holiday spending numbers," said Tom McGee, President and Chief Executive Officer of the International Council of Shopping Centers, a global trade association established in 1957. "The strong holiday shopping season suggests a positive environment for retail sales overall."

Chris Mason, CEO and co-founder of online menswear retailer Branding Brand Inc., said the mobile web attracts new customers, and mobile apps earn their loyalty. "Mobile is the primary growth channel, traffic channel and soon to be revenue channel for e-commerce," he added.

Consistent online, in-store growth

The ICSC's Post-Holiday Consumer Shopping Survey, published Jan. 3, 2016, was based on a survey of 1,030 adults. It was conducted by Opinion Research Corp. between Dec. 27 and 28, 2016. Respondents indicated they had spent an average of $711 on holiday-related gifts in 2016, a 16 percent increase in overall holiday spend above the $611 average spent during the same period in 2015.

Despite record numbers of ecommerce spending, consumers continued to shop in brick-and-mortar stores, which represented almost 70 percent of total holiday-related spending. This data reflects the predominant omnichannel trends across retail, as merchants strive to satisfy the shopping behaviors of all generations, McGee noted. "The convergence of physical and digital continues to be important, as consumers have come to expect an integrated experience allowing them to buy products through a variety of channels," he said.

Increased smartphone shopping

The Synchrony Financial Digital Study, released in October 2016, identified increasing use of smartphones among all key demographic groups. Researchers used survey data gathered from 1,294 adults between May and June 2016. Following are key metrics in the study:

  • Increased mobile usage: 67 percent of respondents completed a shopping-related task on a mobile phone, up from 45 percent in 2015. Activities included using a mobile phone to research a product, check in at a retailer, track reward points and complete purchases online.

  • Added revenue from in-store pickups: 61 percent of respondents who visited stores to pick up items ordered online made additional in-store purchases.

  • Shopping center visits: 81 percent of millennials, 62 percent of baby boomers and 73 percent of gen X shoppers visited a shopping center during the 2015 holiday season. Millennials surveyed used technology to enhance, not replace the physical shopping experience.

Online, in-store cross-selling

Retailers have benefitted from consumers who order online and pick up their orders in physical stores. These in-store visits create additional opportunities for adjacent retailers, researchers found. The ICSC study found 70 percent of adults who visited shopping centers during the holiday season engaged in ancillary activities, including the following:

  • Price comparison: 52 percent used connected devices to compare prices.

  • Inventory checking: 40 percent checked item availability.

  • Coupon presentment: 37 percent presented digital discounts or coupons at the POS.

  • Product reviews: 33 percent read or wrote product or service reviews.

  • Dining and entertainment: 45 percent dined at a restaurant; 26 percent saw a movie.

In-store, online mix

Post-holiday reports have shown mobile and ecommerce activities can benefit brick-and-mortar retailers. According to ICSC analysts, consumers who shop online for holiday gifts "routinely opt to shop with retailers that have a physical location." The association also stated it is confident shopping centers will remain "integral to the social fabric of their communities by providing a central place to congregate with friends and family, discuss community matters, and participate in and encourage philanthropic endeavors."

Synchrony Financial researchers concluded that digital shopping, social media influence and mobile payment schemes have permanently altered the retail landscape. "As the quality of digital retail experiences increases, consumers will continue to feel more comfortable using this media for their shopping transactions," they wrote. "To provide a better, more satisfying shopping experience, as well as to stay competitive and relevant, retailers must be constantly innovating and exploring new ways of leveraging today's digital technology and tools." end of article

Editor's Note:

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