As the 2013 holiday shopping season commences, it is forecasted that consumers will spend less than ever. The National Retail Federation revealed that shoppers are planning to cut holiday spending by 2% from last season. Still, NRF notes that overall holiday spending will increase 3.9% to $602 billion this year. For many retailers holiday shopping accounts for a majority of their annual revenue, so it is important to understand this declining statistic.
Why Are Consumers Spending Less?
This year, self-gifting is on the decline. Forbes notes that shoppers will cut back on impulse buys for themselves this holiday season. Consumers are creating tight budgets and sticking to them. Although businesses are presenting deals that seem too good to pass up, consumers are displaying considerable self-control. Additionally, Accenture’s annual shopping survey reveals that even those planning to spend more this year will be hunting for deals. 62% of respondents said it would take a 30% discount or more to encourage them to make a purchase—that is up 10% from last year.
With 39% of survey responders admitting they will return and repurchase an item if they find it at a lower price, it is important that businesses offer competitive prices. Likewise, 45% of survey-takers said they plan to use competitor price-matching—making this holiday season one of friendly competition! Consumers’ pocketbooks are tight, and it will be harder than ever to win their sales in 2013.
How Should Businesses Respond?
ShopperTrak founder Bill Martin stated, “Although the economy continues to recover slowly, consumers remain cautious about spending and are not ready to splurge. Even though online buying increases each year, brick-and-mortar sales remain retail’s largest profit opportunity.”
With the gap between Black Friday and Christmas only being 25 days this year, it will shorten the holiday shopping season to four weekends opposed to the usual five. It is more important than ever for retailers to impress buyers immediately. Although brick-and-mortar stores account for the majority of holiday sales, it is still crucial that retailers offer online shopping opportunities to capitalize on that market. InternetRetailer.com notes that e-commerce spending in the United States will increase about 15.1% in November and December from 2012, for a total of $61.8 billion. Furthermore, eMarketer projects that mobile commerce will account for nearly 16% of online sales this year—so businesses should be ready to accommodate this new buying trend.
Although retail store shopper traffic is predicted to decrease 1.4 % this holiday season, businesses can still prosper—they just have to be prepared to compete. With shoppers being more responsive to deals, it is important to offer aggressive bargains this season. With Christmas quickly approaching, it is critical that businesses have their holiday marketing operations ready to go in November!
Is your business ready for holiday sales?
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