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Winter Holiday Shopping - US - August 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Tempered forecast for 2016 holiday season; Should edge 2015 by $10 billion
Figure 1: Total US retail sales* in November and December, at current prices, 2006-16
All I want for the holidays is a good deal
Figure 2: Deal-seeking behaviors, May 2016
Online shopping will reach new heights
Figure 3: Online shopping intent, by generation, May 2016
The opportunities
Focus on low-hanging fruit to upsell
Figure 4: Spending versus self-gifting intent, by key demographics, May 2016
Lay out detailed messaging strategy
Figure 5: Attitudes related to preferred shopping time frames, May 2016
Check off shoppers’ wish lists
Figure 6: Holiday shopping improvements, May 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Winter holiday season should edge last year, but don’t count on it being a record breaker
Economic climate leads to uncertainty
A look back: Success or failure?
MARKET SIZE AND FORECAST
2016 holiday season expected to trump last year by $10 billion
Figure 7: Total US retail sales* in November and December, at current prices, 2006-16
Figure 8: Total US retail sales* in November and December as a share of total annual retail sales, 2006-16
2015 anticipated expenditures were expected to stay flat versus 2014
Figure 9: Anticipated winter holiday expenditures on gifts versus other items, in current dollars, 2010-15
MARKET PERSPECTIVE
Holiday sales were solid in 2015, but many say not solid enough
MARKET FACTORS 
Consumers are in wait-and-see mode regarding the economy
Figure 10: Outlook on personal financial situation vs. US economy in coming 12 months, February 2015-March 2016
Figure 11: Consumer confidence and unemployment, 2007-June 2016
Slight gains for GDP and DPI
Figure 12: GDP and PCE change from previous period, Q1 2007-Q1 2016
Figure 13: Disposable Personal Income change from previous period, January 2007-May 2016
Median household income on the decline
Gas prices remain low, but are starting to creep back up
Figure 14: US gasoline and diesel retail prices, January 2007-June 2016
More time to shop this year
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Leading with mobile
Stores without meaningful consumer relationships risk alienation
Tis the season for technology
WHAT’S WORKING?
Mobile shopping
Email marketing
Figure 15: Amazon email, November 2015
Figure 16: Nordstrom email, November 2015
Figure 17: REI email, November 2015
Search engine optimization and marketing
Customizable lists
WHAT’S STRUGGLING?
Is brick and mortar dead?
Figure 18: Target Wonderland pop-up shop in New York City, December 2015
Figure 19: Lush holiday movie screenings in London, December 2015
WHAT’S NEXT?
Social media integration
Shoppable marketing
Interactive video
Virtual and augmented reality
Connected devices will top wish lists
THE CONSUMER – WHAT YOU NEED TO KNOW 
Gift cards remain hot items
Three out of four plan to do at least half of shopping online
Shopping season gets longer
Right gift trumps the budget more often than not
Consumers want “free and fast” service for the holidays
THE MEANING OF THE HOLIDAYS
2015 WINTER HOLIDAY PURCHASES
Everyone’s still eating, drinking, and being merry
Figure 20: 2015 winter holiday purchases, May 2016
Categories purchased vary by holiday
Figure 21: 2015 winter holiday purchases, by holiday, May 2016
Men are shopping too
Figure 22: 2015 winter holiday purchases, by gender, May 2016
What’s on their shopping and personal wish lists?
Experiences over tangible items
PLANNED RETAIL CHANNELS 
Prepare for another year of Amazon domination
Figure 23: Planned retailer types, May 2016
Figure 24: Planned retailer types, by age and household income, May 2016
Local stores have a chance to shine
Local
National
No preference
ONLINE SHOPPING INTENT 
Three out of four plan to do at least half of shopping online
Figure 25: Online shopping intent, May 2016
Figure 26: Online shopping intent, by generation, May 2016
Online marketplaces grow
Video should be a vital part of communication strategies
Email marketing performance can be amplified with browse abandonment tactics
Mobile as the new storefront
Figure 27: Planned 2015 holiday shopping consumer activities on mobile devices, October 2015
HOLIDAY SHOPPING RESEARCH AND PLANNING 
Even if they’re not buying online, they’re probably shopping online
Figure 28: In-store versus online preferences, by gender and age, May 2016
Figure 29: Online shopping behavior, by generation, May 2016
Cashing in on coupons and loyalty points
Figure 30: Other deal-seeking behavior, by parental status, May 2016
In their words
SHOPPING TIME FRAME 
Season begins much earlier than Thanksgiving
Figure 31: Attitudes related to preferred shopping time frames, by gender, May 2016
The “power period” is changing
Figure 32: Attitudes related to shopping on key days, May 2016
In their words
I’m all in
I steer clear
Shopping process extends post-holiday
ATTITUDES TOWARD WINTER HOLIDAY SHOPPING 
Younger generations are primed to spend more
Figure 33: Anticipated spending, by key demographics, May 2016
Balancing the right gift with the budget
Figure 34: Importance of finding right gift versus staying within budget, by household income, May 2016
Tis the season to gift myself
Figure 35: Self-gifting tendency, May 2016
What are consumers willing to pay more for?
Credit cards most common form of payment
Figure 36: Preferred payment method for holiday purchases, by age and household income, May 2016
Explaining their preferred payment methods
Cash preferred
Credit cards preferred
HOLIDAY SHOPPING DESIRED IMPROVEMENTS 
Free goes a long way
Figure 37: Holiday shopping improvements, May 2016
Older generations appreciate being rewarded for their loyalty
Figure 38: Select holiday shopping improvements, by generation, May 2016
Don’t underestimate the small things
Figure 39: Select holiday shopping improvements, by race and Hispanic origin, May 2016
What about customization options?
Definitely a factor
Nice to have
Not a factor
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
APPENDIX – MARKET 
Figure 40: Total US retail sales* in November and December, at inflation-adjusted prices, 2006-16
Figure 41: Anticipated average expenditures for winter holidays, at current prices, 2010-15
Figure 42: Anticipated winter holiday expenditures on gifts versus other items, in current dollars, 2010-15
Figure 43: Median household income, in inflation-adjusted dollars, 2004-14
Figure 44: Population by race and Hispanic origin, 2011-21
Figure 45: Length of the holiday shopping season, 2005-16
APPENDIX – CONSUMER 
Figure 46: US retail sales during November and December 2015 combined, by device/platform
Figure 47: When last holiday gifts will be purchased, October 2015
Additional qualitative data
Before Thanksgiving
Around Thanksgiving or after

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