HOLIDAY SHOPPING BEST PRACTICES FOR RETAILERS

What do people shop for during the holidays?

On average, consumers plan to purchase about eight gifts or gift cards for the holiday season. This figure reflects a slight decrease from the previous year's average of nine gifts.

In terms of spending, the average amount allocated for gifts is approximately $620 out of an overall holiday budget of $875 per person for 2023.

 

Economic Influences

Despite economic challenges such as inflation and high interest rates, holiday spending is projected to increase. The National Retail Federation anticipates that total holiday spending will rise between 2.5% and 3.5% compared to the previous year, indicating a resilient consumer outlook.

.In summary, holiday shopping encompasses a variety of categories focused on gifts, decorations, food, and experiences. Trends indicate a strong preference for online shopping while also highlighting the importance of local businesses and innovative payment methods.

 

Consumer shopping behavior during the holidays

During the holiday season, consumer shopping behavior reflects a blend of traditional practices and modern trends, influenced by economic conditions and technological advancements. Here’s a breakdown of what people typically shop for during the holidays.

Key Holiday Shopping Categories

1. Gifts
   • Clothing: Shoppers plan to spend an average of $321 on clothing gifts, maintaining similar spending levels from previous years
   • Toys and Electronics: These categories remain popular, with many consumers prioritizing gifts for children and tech enthusiasts.
2. Decorations
   • Consumers are increasingly allocating budgets for holiday décor, with spending on non-gift items like decorations expected to rise significantly
3. Food and Beverages
   • Food purchases are a staple during the holidays, particularly for gatherings and celebrations. However, rising prices may affect overall spending in this category
4. Experiences
   • There is a growing trend towards spending on experiences such as travel, hosting gatherings, or attending events, reflecting a shift from material gifts to creating memories

Consumer holiday gifting habits

Gift categories that are particularly popular include gift cards, clothing, and personal care items.Overall, while the number of gifts purchased may vary by individual preferences and family traditions, eight gifts is a common benchmark for many shoppers during the holidays.

Men and Women gift buying trends

Men generally purchase more gifts than women during the holiday season. Here are some key points based on recent studies:

1. Spending Differences: Men tend to spend about 10% more on holiday purchases compared to women, averaging approximately $94 more per purchase. This trend indicates that while both genders are active in gift-giving, men often allocate a larger budget for their holiday shopping
2. Gift Buying Behavior: Surveys show that 73% of men report buying gifts for their spouses or partners, compared to 60% of women. Additionally, when it comes to buying gifts for children, 77% of mothers and 65% of fathers participate, showing that both parents are involved but with varying levels of spending and purchasing behavior
3. Gift Selection Quality: While men may buy more gifts, studies suggest that women are often perceived to make better gift selections. Women tend to start shopping earlier and spend more time selecting gifts, which may lead to a higher quality of gift-giving overall
4. Cultural Expectations: Societal norms often position women as primary gift-givers, particularly in family settings. This can influence perceptions about who buys more gifts, even if men may spend more overall.

 

During the holiday season, many consumers engage in self-gifting alongside purchasing gifts for others.

Self-Gifting Trends

1. Prevalence of Self-Gifting:
   • Approximately 61% of shoppers plan to buy items for themselves while holiday shopping. This trend is particularly strong among Millennials (73%) and Gen Z (68%) 
2. Intent to Purchase:
   • A survey indicates that 32% of U.S. adults intend to buy themselves a holiday gift. While this figure is slightly down from previous years, it still reflects a significant inclination towards self-gifting 
3. Shopping Behavior:
   • Many shoppers use holiday sales events, such as Black Friday and Cyber Monday, not just for gifts but also to purchase items for themselves. About 64% of people surveyed indicated they are likely to buy something for themselves during these sales 
4. Spending Patterns:
   • Self-gifters tend to spend more overall during the holiday season compared to those who do not buy gifts for themselves. They are also more likely to shop online, with nearly 47% indicating they will do most of their shopping online.

 

Challenge for shoppers during the holidays

Shoppers face several significant challenges during the holiday season, largely influenced by economic conditions, consumer behavior, and the retail landscape. Here are the primary obstacles:

Financial Strain

• Inflation Concerns: A substantial number of shoppers (28%) report stress about the costs associated with holiday shopping, with many feeling that their budgets will be strained this year. This marks an increase from previous years, as consumers grapple with ongoing inflation and rising prices across various categories
• Debt Anxiety: Approximately 27% of shoppers plan to incur debt for their holiday spending, reflecting a reliance on credit cards or "Buy Now, Pay Later" services to manage expenses

Decision Fatigue

• Overwhelming Choices: The vast array of products and promotions can lead to decision fatigue, making it difficult for consumers to make choices. This often results in impulsive buying or dissatisfaction with purchases made under pressure

Supply Chain Issues

• Product Availability: Consumers are increasingly concerned about the availability of products and timely shipping. Retailers are expected to manage their supply chains effectively to meet high consumer expectations regarding delivery times and stock levels

Competition and Market Dynamics

• Dominance of Major Retailers: Competition from large online platforms like Amazon poses a challenge for smaller retailers. Many consumers are expected to concentrate their shopping on these marketplaces, which can limit options for those seeking unique or local gifts
• Price Sensitivity: With many shoppers prioritizing better prices and promotions, retailers must navigate competitive pricing while maintaining profitability. This pressure can lead to challenges in marketing and inventory management

Changing Shopping Habits

• Early Shopping Trends: An increasing number of consumers are beginning their holiday shopping earlier in the season to avoid stock shortages. This shift complicates traditional retail strategies that rely on last-minute shopping spikes

In summary, holiday shoppers are navigating a complex landscape marked by financial pressures, decision fatigue, supply chain uncertainties, competitive dynamics, and evolving shopping behaviors. These challenges require both consumers and retailers to adapt strategically as they approach the holiday season.

 

I Don't Have Time!

Time management presents a significant challenge for shoppers during the holiday season. Here are the key aspects:

Time Constraints

• Busy Schedules: The holiday season is often filled with social events, family gatherings, and work commitments, making it difficult for shoppers to find time for shopping. Many feel overwhelmed by the number of activities they want to participate in, leading to a packed schedule that can cause stress and fatigue

Last-Minute Shopping Pressure

• Procrastination: Many shoppers wait until the last minute to purchase gifts, which can result in limited availability and higher prices. This rush can lead to poor purchasing decisions and increased anxiety as deadlines approach

Planning and Organization

• Need for Lists and Prioritization: Without a clear plan, shoppers may forget important gifts or overspend. Creating lists of recipients and prioritizing purchases is essential but often neglected, leading to chaos as the holidays draw near

Shopping Time Management

• Peak Shopping Hours: Navigating crowded stores during peak shopping times can be frustrating. Shoppers often struggle to find convenient times to shop, which can lead to long lines and wasted time

Balancing Online and In-Store Shopping

• Mixed Methods: While online shopping offers convenience, it also requires time for browsing and waiting for deliveries. Balancing between online and in-store shopping adds complexity to time management during the holidays.

 

How to help shoppers have a smooth holiday shopping experience

To ensure a smooth holiday shopping experience, shoppers can implement several effective strategies. Here are key tips to consider:

1. Create a Budget

• Set Spending Limits: Determine a total budget for gifts and stick to it. This helps avoid overspending and financial stress after the holidays
• Include All Expenses: Factor in costs for decorations, food, and any additional holiday-related expenses to get a complete picture of your financial commitments

2. Make a Shopping List

• List Recipients and Gifts: Write down everyone you plan to shop for and assign a budget for each person. This keeps you organized and focused
• Prioritize Purchases: Identify time-sensitive gifts (e.g., for teachers or service providers) to ensure you buy them early

3. Plan Shopping Trips

• Choose Optimal Times: Shop during off-peak hours, such as early mornings or weekdays, to avoid crowds and long lines
• Be Mindful of Store Traffic: Research when stores are busiest and plan your trips accordingly to maximize efficiency

4. Shop Early

• Avoid Last-Minute Rush: Start shopping as early as possible to take advantage of better selection and avoid the stress of last-minute purchases
• Watch for Deals Throughout the Season: Instead of focusing solely on Black Friday or Cyber Monday, look for deals throughout the holiday season

5. Utilize Online Shopping

• Take Advantage of Convenience: Online shopping can save time and often offers better deals. Use delivery services or curbside pickup to minimize time spent in store.
• Check Shipping Costs: Be aware of shipping fees that can add to your total costs. Look for free shipping promotions whenever possible

6. Stay Disciplined

• Stick to Your List: Avoid impulse buys by adhering strictly to your shopping list. If tempted, take a break or leave the store to refocus
• Monitor Spending: Keep track of your purchases and expenses as you shop to ensure you stay within budget

7. Consider Homemade Gifts

• Personal Touch: Homemade gifts can be meaningful and cost-effective alternatives to store-bought items. Consider crafts or baked goods for friends and family.

 

What about Personal Shoppers?

Personal shoppers can significantly assist families and busy professionals in finding gifts such as clothing and jewelry during the holiday season. Here’s how they can help:

Benefits of Using Personal Shoppers

1. Time-Saving
   • Personal shoppers take the burden of searching for gifts off your shoulders, allowing you to focus on other holiday preparations or enjoy your time with family. They handle everything from researching products to making purchases.
2. Expert Recommendations
   • With their knowledge of current trends and local offerings, personal shoppers can suggest thoughtful and unique gifts tailored to the recipient's preferences. They often have access to exclusive items that may not be widely available.
3. Local Shopping Support
   • Many personal shoppers are well-connected with local stores and artisans, enabling them to find unique, locally-made gifts that add a personal touch. This is particularly beneficial for those looking to support small businesses during the holidays.
4. Stress Reduction
   • The holiday shopping process can be overwhelming, especially with long lists and crowded stores. Personal shoppers alleviate this stress by managing the logistics, including gift wrapping and delivery.
5. Customized Services
   • Services like Simplified offer personalized shopping experiences where concierges curate gift ideas based on your specifications, ensuring that each gift is meaningful and appropriate for the recipient.
6. Convenient Delivery Options
   • Many personal shopping services provide delivery options, including same-day delivery, which is ideal for last-minute purchases or busy schedules.

 

Pros and cons of online and local shopping for the holidays

For retailers it's important to understand what consumers face and the options they have and design programs and services which are difficult for online pureplays to match.  Taking advantage of your strengths instead of trying to fight to your opponent's strengths is key to success.

Online Shopping

Pros:

• Convenience: Shop 24/7 from anywhere, avoiding crowds and lines
• Wider selection of products
• Easy price comparison across retailers
• Home delivery
• Potential for better deals, especially on Cyber Monday

Cons:

• Shipping costs
• Potential delivery delays
• Risk of missing, broken, or stolen items
• Lack of ability to physically inspect products before purchase
• Possible difficulties with returns

Local In-Store Shopping

Pros:

• Immediate gratification - take purchases home right away
• Ability to see, touch, and try products before buying
• Personal assistance from staff
• Supports local economy and jobs
• No shipping costs or delivery concerns
• Easier returns and exchanges

Cons:

• Limited to store hours
• Dealing with crowds, especially during peak holiday season
• Potentially more limited selection than online
• Time spent traveling to stores and waiting in lines
• May be more difficult to compare prices across retailers

Key Considerations:

• 62% of shoppers intend to complete over half their holiday gift purchases online
• Local shopping provides a more tactile experience and immediate possession of items
• Online shopping offers more convenience and potentially better deals, especially later in the season
• A combination of both methods may provide the best overall holiday shopping experience.

 

HOW LOCAL RETAIL STORES CAN SELL MORE TO CUSTOMERS DURING THE HOLIDAYS

Local retail stores can enhance their holiday sales by implementing several effective strategies. Here’s a comprehensive overview of approaches to attract customers and boost sales during the holiday season:

1. Seasonal Promotions and Discounts

• Plan Special Sales: Organize holiday-themed promotions, such as “12 Days of Christmas” or “New Year’s Countdown,” offering daily deals to entice shoppers. This can create urgency and encourage repeat visits
• Bundle Offers: Create special bundle deals or buy-one-get-one offers to increase average transaction values. Tailoring these promotions to your target audience can maximize their effectiveness

2. Enhance Customer Experience

• Festive Atmosphere: Decorate the store to create a welcoming holiday environment. Consider hosting events like workshops or local artist pop-ups to draw in customers and enhance their shopping experience
• Personalized Customer Service: Train staff to provide exceptional service, helping customers find the perfect gifts and offering personalized recommendations based on their needs

3. Leverage Digital Marketing

• Social Media Engagement: Use social media platforms to promote holiday offerings, share festive content, and engage with customers directly. Creating unique hashtags and running giveaways can boost visibility and interaction
• Email Campaigns: Implement targeted email marketing campaigns to inform your existing customer base about exclusive holiday deals, events, and gift ideas. Personalization can significantly enhance engagement and conversion rates

4. Optimize Inventory Management

• Stock Up on Popular Items: Analyze past sales data to predict which products will be in demand this holiday season. Ensure adequate inventory levels to meet customer needs without overstocking
• Flexible Offerings: Given potential supply chain issues, consider offering gift certificates or experiences that are less likely to be affected by inventory shortages

5. Foster Community Connections

• Support Local Initiatives: Collaborate with local charities or community events to create goodwill and attract customers who value community engagement. This can include donation drives or partnerships with local artists
• Promote Local Benefits: Highlight the economic impact of shopping locally in your marketing materials, emphasizing how purchases contribute to the community’s well-being

6. Utilize Technology

• Online Presence: Ensure that your website is user-friendly and optimized for mobile devices, allowing customers to browse products online easily. Offering options like curbside pickup can also cater to changing consumer preferences
• Loyalty Programs: Implement loyalty programs that reward repeat customers with discounts or exclusive offers during the holiday season, encouraging them to return even after the holidays

 

Additional services and offerings

7. Personalized Gift Wrapping

• Complimentary or Themed Wrapping: Offer free or themed gift wrapping services to enhance the shopping experience. This adds a personal touch and saves customers time.

8. Exclusive Holiday Events

• In-Store Workshops: Host events such as DIY gift-making workshops, holiday cooking classes, or craft sessions. These events can attract customers and create a festive atmosphere.
• Meet-and-Greet with Local Artisans: Invite local artists or makers to showcase their products, allowing customers to meet the creators and learn about their work.

9. Extended Store Hours

• Convenient Shopping Times: Extend store hours during the holiday season to accommodate busy schedules, making it easier for customers to shop at their convenience.

10. Loyalty Programs with Holiday Bonuses

• Special Promotions for Members: Enhance loyalty programs by offering exclusive discounts, early access to sales, or bonus points during the holiday season. This encourages repeat visits and customer retention.

11. Local Delivery Services

• Same-Day Delivery Options: Provide local delivery services, especially for last-minute shoppers. This convenience can significantly enhance customer satisfaction.

12. Gift Guides and Personalized Recommendations

• Curated Gift Guides: Create in-store or online gift guides featuring local products tailored to different interests and demographics. Offering personalized shopping assistance can also help customers find the perfect gifts.

13. Community Engagement Initiatives

• Charity Drives: Partner with local charities for donation drives or fundraisers during the holidays. Encourage customers to donate items or a portion of their purchases to support local causes.
• Holiday Giveback Programs: Implement programs where a percentage of sales goes to local charities, enhancing community ties and encouraging shoppers to support local businesses.

14. Unique Product Offerings

• Limited Edition Items: Introduce exclusive holiday-themed products or limited editions that shoppers can only find locally, creating a sense of urgency and uniqueness.
• Local Art and Crafts: Feature locally made goods that reflect community culture, appealing to consumers' desire for unique and meaningful gifts.

 

Catering to eco-consicous consumer needs

Eco-conscious consumers adopt several strategies to shop sustainably during the holiday season. Here are some key approaches based on the search results:

1. Mindful Gifting:
   • Focus on experiences over material gifts, such as concert tickets or cooking classes
   • Create DIY gifts like homemade treats or crafts to reduce the need for store-bought items
2. Support Sustainable Brands:
   • Research and choose brands with eco-friendly practices and sustainable materials
   • Look for third-party certifications like Fair Trade or USDA Organic
3. Shop Locally:
   • Support local businesses to reduce carbon footprint from shipping and support the local economy
   • Visit local farmers markets, independent restaurants, and artisans
4. Buy Second-Hand:
   • Shop at thrift stores for gently used items to give as gifts
   • Encourage friends and family to consider second-hand shopping for gifts
5. Sustainable Decorations:
   • Opt for reusable decorations or use natural elements like pine cones and locally sourced greenery
   • Choose LED lights for energy efficiency
6. Minimize Waste:
   • Use eco-friendly gift wrapping like reusable cloth bags or recycled paper
   • Avoid single-use items for holiday gatherings
7. Consider Alternative Gifting:
   • Make charitable donations in someone's name
   • Gift experiences or services rather than physical items
8. Use Sustainable Shopping Practices:
   • Bring reusable shopping bags and water bottles when shopping
   • Look for gifts with minimal or reusable packaging
9. Support Green Businesses:
   • Seek out certified green businesses in your community
   • Use resources like the California Green Business Network to find eco-friendly options
10. Focus on Quality Over Quantity:
    • Choose durable, long-lasting gifts that won't quickly end up in landfills

 

In conclusion, there are many ways local retail stores, small and large can take advantage of their proximity to customers and available inventory to capture holiday sales.  Key is to be creative and provide valuable services that consumers will not find online.

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