6 Things You Need to Know About Consumers’ Holiday Spending Plans - Forum.web.com
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6 Things You Need to Know About Consumers’ Holiday Spending Plans
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Are you trying to capture consumers’ holiday retail dollars? You might have a tougher time of it this year. According to the National Retail Federation’s holiday consumer spending survey conducted by Prosper Insights & Analytics, the average consumer will spend $737.95 on gifts, décor, greeting cards and related items, 2 percent less than last year.

While that’s not a huge decline, consumers are showing more hesitancy to spend. Nearly one-third of respondents in the study said the government shutdown this past fall has made them more cautious about holiday spending, and more than half (51 percent) say the state of the economy in general is affecting their spending plans.

Here are some things you need to know and how you can overcome these hurdles to keep your holiday sales strong:

  1. Customers are budget-minded. Nearly eight in 10 (79.5 percent) of consumers say this year they are hoping to cut corners and tighten their budgets wherever possible. One way to handle this is to offer discounts and deals. However, a better strategy for a small business is often to focus on value for money. Emphasize that your products are well-made, long-lasting, unique or come with a guarantee or warranty so that customers will see their worth.
  2. Customers are less likely to treat themselves. To cut their budgets, 43 percent of shoppers say they will not be “self-gifting,” or treating themselves to a purchase because of irresistible deals. Of course, that means 57 percent will be self-gifting. However, they plan to spend an average of $129.62 on non-gift purchases this year, down from a last year’s $140.43. If you can offer great deals or value, you may be able to overcome consumers’ determination not to self-gift.
  3. Focus on the family. The majority of consumer holiday budgets will be spent on gifts for family members, with the average person planning to spend $415.50 on relatives, down from the $423.36 they spent last year. Marketing messages that emphasize gifts for mom, dad, siblings and children will be effective in capturing the majority of consumer dollars.
  4. But don’t forget the extras. Consumers’ next biggest spending category will be food and candy ($100.35), then friends ($72.14), followed by decorations ($51.60), greeting cards ($28.03) and co-workers ($23.59). You can increase sales in these categories by emphasizing budget-friendly but unique gifts that will make a splash. For food and décor, try a marketing message that emphasizes how these items bring people together and help create lasting memories with loved ones.
  5. They’re already shopping. Consumers have already started shopping, with just 3.9 percent saying they plan to wait until the last two weeks of the month to shop. Primary reasons for the early start were to spread out spending and to get the best deals. Clearly, the early-start consumers are budget-focused, but the last-minute buyers are more accepting of the tradeoff that waiting till the last minute means they won’t get the best deals. This means you can probably get away with less discounting the closer it gets to Christmas.
  6. Online retailing is up. The average person plans to do 40 percent of their holiday shopping online. That’s great news if you have an ecommerce site, but even if you don’t, it means you have an opportunity to capture consumers who are researching or searching for products online. Make sure your website’s SEO is strong and that your brick-and-mortar store is listed on local search directories with detailed, updated information. Consider using pay-per-click ads to drive online researchers to your website—and make sure there’s a clear call to action, such as printable coupons, to get them into your store. Keep in mind that you’ll either have to offer big deals or unique merchandise to get shoppers off the couch and into your store. Some 35.6 percent of consumers in the survey say the most important factor in deciding where to shop are sales and discounts. However, 16.4 percent say the most important factor is a wide selection of merchandise and 13.6 percent say it’s the quality of merchandise.

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Rieva Lesonsky

Rieva Lesonsky

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+ and Twitter.com/Rieva, and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
Rieva Lesonsky

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