Holiday shopping

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Holiday shopping trends 2018

Prepare your retail strategy for this year’s holiday shoppers

The holidays are coming, the bells are ringing… So what are pivotal trends in holiday shopping in 2018? What is happening around Black Friday and what does this mean? How are consumers shifting the channels that they use, and how are millennials leading the way? You will find all of this, and more, in the annual Deloitte Holiday Shopping Survey.

Key trends and what they imply

Every year, Deloitte publishes a Holiday Shopping Survey. And just like in previous years, the results are an indication of what to expect this crucial retail season. We believe the consumer behaviours in the run-un to the holidays are changing and retailers can potentially take advantage of this, with open eyes and strong preparation. This year’s results reveal three crucial questions retailers should ask themselves in order to have the right to win in today’s environment:

  • Is your Black Friday strategy the best way to proactively shape this increasing trend, factoring in both short-term gain and long-term pain?
  • Does your mobile customer experience accommodate increasing growth and expectations from these channels?
  • Is your in-store experience sufficiently compelling to entice consumers away from their digital screens and into your stores?

Deloitte Holiday Shopping Survey 2018

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Black Friday is on the rise…

Black Friday is becoming more popular in the Netherlands every year. For instance, 53% of respondents are planning to purchase presents on Black Friday, spending over 16% of their total holiday budget this year. Especially the younger generation (Millennials, age 18 to 34) are excited by the potential savings – nearly 70% will purchase during Black Friday. Retailers internationally, and now also in the Netherlands, have been quick to follow this trend and join the Black Friday hype. They often combine messaging about big discounts with additional services like free delivery to entice customers to part with their cash earlier in the festive season.

… but is it a blessing or curse?

The quick adoption of the Black Friday trend triggers the question whether Black Friday is really a blessing or rather a curse for retailers. Traditionally, consumers were willing to pay full-price for their Christmas purchases and enjoyed discounts in particular during the post-Christmas sales  – resulting in high end-of-year margins for retailers and the opportunity of post-Christmas clearing of stock.  Lessons from the UK and the US particularly highlight that advancing discounts to Black Friday actively shapes and distorts consumer behaviour and expectations, away from emotionally-driven full-margin purchases to pragmatic low-margin purchases earlier in the year. It tends not to drive incremental transactions since consumers are generally not buying more products, but merely purchasing lower-margin products earlier in the year. Strategically this carries the additional risk of discounting becoming the rule, not the exception. Just look at the UK for evidence of this, where in effect November through to February are now discount periods.

Brand and trust

Retailers in the UK and the US have often   - understandably - manipulated prices in the run-up to Black Friday to artificially drive consumers’ discount perception. As is almost always the case, however, the media and consumers have started to see through this, which further impacts not only margins, but also brand and trust. 

So Black Friday often does not drive incremental volumes, it often reduces actual achieved margin, and it might damage brand trust. Our advice is thus to go in with your eyes wide open and to have a very robust Black Friday strategy that considers not just the tactical opportunity but also the strategic impact on consumer behaviour, consumer expectations, and brand trust.

Mobile shopping: 24/7 convenience

More and more consumers are exchanging offline shopping for online – or are complementing in-store purchases with online convenience. And since mobile phones are  available all day and every day, mobile shopping is becoming a more popular channel to purchase holiday products. 1 out of 4 consumers are currently planning to use mobile as a channel to make a purchase, which is an over 20% growth compared to last year. With a more tech-savvy generation entering the retail target consumer group every day, a strong mobile experience that delivers upon both inspiration and convenience, will be increasingly important. 

In-store traffic: create the experience

According to this year’s survey, 3 out of 10 consumers won’t bother going into a store for their holiday shopping anymore, and 3 out of 5 won’t even visit stores for advice or inspiration. These are significant numbers, and an indication of how much work many physical stores have to do to meet our rapidly changing omnichannel expectations. When consumers spend more than budgeted, however, up to 55% expects to create the overspend in-store, compared to only 36% online, so the store can still play that beautiful role of inspiration and seduction. Increasingly, however, that role will be taken up by those physical outlets that have understood the shift in expectations and have adjusted their in-store experience accordingly. Stores will increasingly need to evolve from a collection of shelves with products for consumers to pick up and pay for, to physical locations that are optimised for whatever mission they aim to serve, be it ultimate shopping efficiency or ultimate inspiration. That’s quite a shift. 

The common denominator: Millennials

This research initiative reveals another underlying trend that impacts holiday trading. Millennials are becoming a pivotal age group - not only in spend and numbers, but also as an indication of future consumer behaviour in general. Their behaviour five years ago has now become typical for most other age groups. Imagine how you would be positioned if 70% of your target audience purchases their products with reduced margins on Black Friday, if market share of the mobile channel skyrockets, and the demand for a targeted in-store experience becomes the norm? This is not a faraway future scenario, this is the millennial group today – and they are becoming more important on the retail market.

Deloitte’s European Holiday Shopping Survey

The above analysis is based on the results of 2018’s edition of Deloitte’s annual European Holiday Shopping Survey. Over 9,000 people from 10 European countries, including The Netherlands, participated in this survey. The full survey report describes holiday shopping trends including where, when, and what consumers are planning to buy, how they look for inspiration, and what can trigger them to overspend. Prepare your retail business for a profitable holiday season, and download the full report now. Feel free to contact our retail expert team below if you have any questions about the survey, your strategy, or consumer behaviour in general.

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