The Holiday Trend Continues: Consumers Will Do More Shopping Online Vs. In-Store This Season

Accenture’s 11th Annual Holiday Shopping Survey has good news for etailers and bad news for stores: consumers say they’ll devote more time to searching for the best deals online and less time fighting the brick-and-mortar crowds on what traditionally have been the peak shopping days.

Across the board, consumer interest in the three major holiday shopping days is waning. According to the online survey, just more than half (52 percent) of respondents said they are less likely to shop on Black Friday this year, 50 percent are less likely to shop on Thanksgiving and 42 percent are less inclined to shop on Cyber Monday.

Why demand is down

So what’s keeping folks home? Nearly two-thirds (64 percent overall, and 70 percent of Gen Z) of those who said they don’t intend to shop on Black Friday pointed to crowds and competing for limited-inventory bargains as a key reason. What’s more, the ease of finding enticing deals year round is a significant factor here. Close to two-thirds (64 percent) of consumers said they conduct their holiday gift shopping across all 12 months, and with with advent of Amazon Prime Day as well as the emergence of deal-based shopping sites, it’s no wonder there’s less pent-up demand around the holidays.  Consider this: 44 percent of respondents say they can get Black Friday-quality deals at any and every other time of the year.

“Given the rise of constant discounts and promotions on sites such as Amazon, consumers are doing more of their holiday shopping year-round, and this is proving to be the biggest competitor to the traditional peak holiday shopping days,” said Jill Standish, senior managing director and head of Accenture’s Retail practice.

Rethinking the holiday season

With e-commerce sites offering a convenient shopping experience online, easy check-out and often mobile app-based purchasing, it’s not hard to see why respondents plan to do 54 percent of their shopping from home, the office or on the go with mobile this holiday season. However, a quarter of respondents did point to in-store convenience, including offerings such as curbside pickup, as positively impacting their planned holiday spending. 

When it comes to trying out a new store or shopping site, consumers of different generations trust different sources of influence. Baby Boomers overwhelmingly rely on word-of-mouth from family members (78 percent), while older Millennials (35 percent) say social media is extremely influential.

“Smart retailers are taking a longer-term view of the season,” said Standish. “Rather than just striving to win new sales through ever-lower discounts, they instead see the holidays as an opportunity to define their purpose, engage in a way that is memorable and be clear about the role they will play in shoppers’ lives both practically and emotionally.”  

Amid financial concerns, consumers plan their purchases carefully

Consumers’ uncertainty regarding their financial well-being seems to be holding back spending increases. Overall, consumers will spend $632 on average this holiday, according to the survey. Compared with 2016, 11 percent fewer consumers say they plan to spend more on holiday gifts this year, though older Millennials (ages 28 to 37 years old) were more likely (40 percent) to say they'll up their spending. Respondents also pointed to gas prices (37 percent) and rising food costs (31 percent) as considerations when thinking about holiday spending.

How much of a discount are consumers looking for? According to the survey results, an average of 37 percent off will persuade shoppers to buy.

Given the financial concerns, consumers will be doing more planning and research before they pull the trigger on holiday purchases. More than three quarters (76) plan to “webroom” and slightly more say they’ll “showroom” before buying. As always, a vast majority will make Amazon their starting place for product research; 84 percent say they’ll check the e-commerce giant before purchasing elsewhere. And to make their budgets stretch, respondents were nearly twice as likely to say they’ll purchase gifts at individual stores to get the lowest prices on each item rather than one-stop shopping in a single store (48 percent vs. 25 percent).

The survey shows that consumers will do whatever they need to get what they want and retailers must plan their holiday inventory carefully. If a product is out of stock in their size or color online, 44 percent say they'll buy it elsewhere (44 percent say the same for in store out-of-stocks), and just 15 percent of online shoppers say they'll purchase a similar product in a different size or color at the website they're shopping. Twelve percent would sign up for "back in stock" alerts in order to get the desired item at a future date.

Consumers demand free shipping — and increase purchasing “experiences”

Free shipping remains a top consumer expectation around the holidays and shoppers will choose “free” over “fast” more times than not. In fact, survey respondents were more than 10 times as likely to say they’re willing to wait longer for their items to be delivered for no charge than to pay a fee for immediate delivery (53 percent vs. 5 percent) — which very well could be tied to consumers planning out their purchases ahead of time. What's more, 21 percent of surveyed consumers say they expect retailers to provide free next-day delivery, another indication of the Amazon effect. 

We’ve all heard about how the consumer thirst for experiences is overtaking demand for products, and this holiday will continue to fuel that trend. According to the survey, more than a third (34 percent) of respondents plan to spend on experience-based gift such as cooking classes, restaurants, travel and event tickets — and 36 percent say intend to spend more on such gifts this year.

“With the rising popularity of ‘experience’ gifts, competition for wallet-share is shifting from rivals in the retail industry to new competitors in other industries, such as travel,” said Standish. “This makes it even more imperative for retailers who want to grow — or even just maintain — their share of wallet to enhance and improve their customers’ shopping experience, whether through improved technology or the addition of new services.”

How retailers can help shoppers

Nearly three quarters  (71 percent) of respondents intend to purchase gift cards this holiday, spending an average of $42 per gift card. Still, there’s a significant opportunity for retailers to benefit by providing shopping ideas for busy consumers or those who have trouble buying for others.  “Winning over the consumer will require providing active, rather than passive, shopping inspiration,” said Standish. “For instance, by proactively offering gift recommendations for that special person, retailers can influence purchasing before consumers check out Amazon or other e-tailers. And while technology has altered the retail experience for consumers and retailers alike, retailers must not lose the human touch. Those that succeed will balance human understanding and sensibility alongside digital prowess.”

How new technologies factor in

Consumers are increasingly familiar with new technologies — and increasingly are willing to try them out. Overwhelmingly, survey respondents say they know smartphones can be used to pay in store, and while just 17 percent currently do so, another 49 percent would definitely do so or would at least try it out. More than three quarters (77 percent) are interested in scanning an item to see color options not available in store, 55 percent would use chatbots for faster, smarter online customer service, and 61 percent expressed interest in virtual try-on capabilities.

"Today’s retailers need to recognize the growing importance of AI and the innovative ways it has been adopted by their online rivals and look to incorporate it into their own customer experience," said Standish. 

"It is really about streamlining search and curating the experience to help customers choose what to purchase. That means offering these services for two distinct purposes: first, helping customers find what they are looking for; second, helping customers find things they don’t yet know they’re looking for. The more that consumers use streaming platforms like Spotify and Netflix, which use AI to curate content for subscribers, the more they will expect retailers to do the same.

"In the coming years, the most innovative retailers will incorporate all of these aspects of AI and make it the face of a company’s digital brand and its key differentiator, moving beyond a one-off tool to the essence of a business," Standish continued.

Personalization is influencing consumer expectations at the holiday. Though BOPIS leads all offerings (52 percent) that survey respondents say they’ll take advantage of this season, consumers cited loyalty programs with exclusive deals (51 percent) and special offers via email (50 percent) as the two other most attractive benefits. Another 45 percent expect competitor price matching on the spot. 

What’s more, 76 percent of older Millennials say they’re somewhat or very likely to purchase additional products when they pick up a BOPIS order.

Privacy and security concerns on the rise

When holiday shopping online, Gen Z consumers are very concerned about their information security (70 percent), outpacing the 62 percent of overall respondents sharing the same concern. To protect themselves and their data, 64 percent of respondents say they’ll only shop from reputable online websites, 59 percent take precautions such as using a complex password or installing the latest security updates and nearly a third (30 percent) plan to avoid brands that have recently reported security breaches. Nearly a quarter (23 percent) indicate they’ll avoid shopping on their smartphones and just 7 percent will not shop online.

Retailers that listen to and serve their customers throughout the year can lay the groundwork for a successful holiday shopping season. “Experiences that are distinct, memorable and worth sharing with others can be the foundation for a more-profitable, enduring and year-round relationship,” added Standish.