Retailers will have to provide even greater value this holiday season if they want their share of the small projected increase in holiday spending, according to Brand Keys’ annual Holiday Spending Survey of 16,000 consumers.
In the face of a much slower economic recovery (70% indicated that the economy is still impacting holiday spending plans) and a much expanded holiday sales period (this year’s started right after Back-to-School sales ended), on average, consumers indicated that they were planning to spend about $824.00, pretty much matching last year’s increase of about 3%. This paltry increase is likely just anticipating and accounting for cost-of-living increases – even in light of expectations for heavy discounting.
But no matter how much consumers spend, the time-honored ‘price-value’ equation retailers have relied on for decades has been transformed by the economy, in-market experience, and consumer expectations into a ‘value-for-dollar’ doctrine. The retail brand, and what it stands for, has become a surrogate for added-value. If retailers understand consumer expectations and actually address them they’ll see higher profits. Unfortunately, most don’t.
Retailers are expected to focus on inventory control, discounting, sales, and promotions. But as discounting has become price-of-entry, shoppers are looking for deals before they are looking at brands. Sixty-five percent of shoppers indicated that they’ve already begun looking for sales. Sixty percent indicated they were using on-line shopping and price comparison applications. More than half (56%) indicated that they were going to rely on coupons and promotions to save money
Over the past decade retailers have taught, and consumers have learned, that there are always lower prices available someplace. Smart retailers that want a larger piece of a smaller holiday pie will have to leverage their own retail brands and the shopping experience if they expect to receive more this year.
Of course, it’s worth remembering that – other than to retailers – it doesn’t matter how much you spend for the holidays. There’s a Russian proverb that goes, “If you have much, give of your wealth. If you have little, give of your heart,” a sentiment worth keeping in mind, particularly this time of the year.