The 2014 holiday shopping season is just around the corner and the analysts at ShopperTrak have been busy identifying interesting data points and insights to help prepare retailers for their busiest time of the year. We’ve discovered a few actionable trends, highlighted below, for retailers looking to optimize their planning for the holidays.
Shoppers Starting Earlier in the Season
One of the major holiday shopping trends over the past 10 years has been an increased propensity for shoppers to spend money earlier in the season. In 2011, 58.7% of total GAFO spending occurred in the month of December (NRF Calendar), whereas in 2013, just 56% of all Holiday in-store spending took place in December. November spending, relative to the whole season, has increased in 9 out of the previous 13 years. Despite a consistent increase in spending in November, in-store shopper traffic has actually shifted the opposite direction, with an increasing percentage occurring during December over the past 3 years. Holiday shoppers, like Back-to-School shoppers, are spending more money per visit but visiting stores less frequently. Increasingly, early Holiday promotions are encouraging shoppers to spend more earlier in the season. While retailers can expect shoppers to continue visiting stores all the way through Christmas and beyond, an increasing amount of annual shopping budgets are being spent in November. Retailers looking to take advantage of the trend shouldn’t wait until the (very) late Black Friday this year, as 40%+ of consumer spending will likely have occurred by that date. Instead, retailers should begin promotions early and target high-value, early-season shoppers to maximize holiday revenue.
Expect More Traffic on Christmas Day
The traffic expectation for Christmas Day changes heavily year-to-year, based on the day of the week on which it falls. In 2011, when Christmas was on a Sunday, just 0.02% of seasonal traffic occurred on Christmas Day. Christmas occurred on Tuesday and Wednesday, respectively, in 2012 and 2013, and saw 0.63% and 1.16% of seasonal traffic. This year, Christmas will fall on a Thursday, which is historically the highest traffic day outside of Friday – Sunday, meaning that we expect a higher percentage of traffic to occur on Christmas Day. Retailers that plan to be open on Christmas should anticipate more in-store traffic than the previous 3 years and will need to prepare accordingly. Both of these trends, (1) Shoppers Visiting Stores Earlier in the Season and (2) More Shoppers Expected on Christmas Day are reflected in the data table below:
Percentage of Seasonal In-Store Traffic by Day (NRF Calendar, 2011 – 2013)
Average Spend Per Shopper Increasing Year-over-Year
According to ShopperTrak forecasts, total holiday in-store traffic is expected to decrease minimally, by 1.7% in 2014. Conversely, total retail sales are projected to increase 4.1% this year, following a 3.1% increase in 2013. With traffic expected to decrease slightly and total sales expected to improve, the big takeaway is that shoppers are spending more during each visit. As we saw with Back-to-School shoppers, Holiday shoppers have more research tools at their disposal, including consumer reviews and online shopping sites, reducing the amount of time spent in-store browsing products. Retailers looking to take advantage of this trend should try to maximize conversion rate by closely looking at in-store placements and having enough associates on the floor to minimize wait times, particularly during busy days and times. Increased staffing, mobile checkouts and extended hours are common among retailers working to maintain the ratio of employees to shoppers, as shoppers are more valuable on a per-visit basis and, increasingly have less patience for longer wait times.
The Holiday season is always of the utmost importance to retailers, accounting for 19.2% of all annual sales during the holidays in 2013. This importance of the holiday season proves the necessity for retailers to closely watch annual trends, as well as their own data, to make the best decisions possible with regards to managing store promotions, staffing, and forecasting. ShopperTrak expects that shoppers will start spending early in the season this year, and that they will visit stores slightly less than in 2013. We also expect Christmas Day to be busier than the previous few years, meaning that retailers should ensure they are staffed properly. We will continue to publish data and retailer insights throughout the holiday season, so continue to follow us on social networks and check the blog for periodic updates.