2012 is projected to be a big holiday shopping season, with consumer spending expected to return to near pre-recession levels. The National Retail Federation’s 2012 consumer holiday spending survey forecasts that the country’s holiday spending will rise 4.1% to about $586 billion – the most optimistic forecast since the recession. But a lot has changed since the pre-recession 2007 holiday shopping season. The consumer shopping experience has seen significant changes in these past five years, and the holiday shopping season is different today than it was then – a sign of the technological advances that have been made, as well as the strides retailers and advertisers are making with digital, data, social media, and mobile.
The Way I See It
The ‘Holiday Shopping Season’ starts earlier and earlier every year, and this year was no exception, with retailers unveiling holiday displays and deals before Halloween. And Thanksgiving Day became the new Black Friday this year, with major retailers opening on Thursday evening with outrageous “while supplies last” deals on technology, toys, big screen TVs, and other hot items.
- I see online shopping continuing to boom with sales on the web and mobile devices continuing to grow – aligned with the growth in advertising on digital and social media, and the increased use of social media by retailers. The NRF survey estimates that online sales this year will grow 12% during the holidays to $96 billion, with more than half of consumers surveyed – 52% – planning to shop for some gifts online, which is up from 47% last year.
- I see gift card sales continuing to be a major “gift” for consumers and retailers alike. Retail gift cards have always been a hot item, even five years ago, but now technology has infused the gift card medium, so some of the hottest gift cards are online gift cards, prepaid debit gift cards, and mobile gift cards. With the NRF survey revealing that 81.1% of consumers will buy at least one gift card this year, it will be interesting to see how much of the pie is taken by the “new” gift cards.
- I see the explosion in reliance on consumer data changing holiday marketing and shopping – by far the largest and most influential change for holiday shopping in the last five years. With data, more relevant information – products, offers, and deals – are being delivered to more consumers than ever before. This effectively results in advertising and marketing dollars doing a better job of getting consumers to shop and buy.
The Way the Industry Sees It
In your eyes, if you had to choose one development or area of change or growth that has had the largest impact on holiday shopping since 2007, what would it be?
Without a doubt, it’s the access consumers have to information via mobile and Internet channels. They now have the ability to see a wide selection of products and prices without having to leave their houses. They can browse deals and/or make purchases on the go, on their own time, without needing to visit an actual store.
How has technology and data changed the way your company prepares for the holiday shopping season and the way you advertise to consumers?
It’s imperative for us to advertise our messages where consumers are, and that means whether they are shopping in-store, looking at products online, etc. In order to stay relevant and competitive, we need to expand our reach and presence as new technologies change the way consumers shop.
I’ve been talking a lot about the trend toward consumers’ reliance on smart phones as their primary communication device and soon-to-be transaction device. How has this move by consumers impacted your business and future plans?
We need to continue to offer relevant offers to cardmembers in the channels that are important to them. For example, ShopDiscover, our online shopping portal offers an extra 5 – 20% Cashback Bonus® at over 150 online retailers, and is now available on tablet devices. Cardmembers can also now enroll and redeem their Cashback Bonus® rewards from our mobile application.
When you consider what consumers bought five years ago and what they buy today during the holiday season, are they the same? If not, how are they different? What conclusions can you make from this change? How have the traditional big-ticket holiday items like home entertainment, technology, and toys purchasing changed in the past five years?
We’ve seen some fluctuations in the amount people spend on holiday gifts over time and as the economy has been in flux. According to the 2012 Discover Holiday Shopping Survey, which assesses consumers’ spending trends and gift intentions, consumer electronics, games, and apparel top consumers’ holiday wish lists. Interestingly, consumer electronics were also the most popular choice in our 2007 survey, though the technology of products on the market then was nowhere near where it is today.
In what ways do you think the holiday shopping season for retailers, advertisers, and consumers will change – and stay the same – in the next five years? Any predictions?
Consumers will have more information at their fingertips to find the best deals, which will continue to drive competition among retailers in terms of how people want to shop with them. It will be interesting to see how the competition between brick-and-mortar and online stores unfolds. Regardless of how, when, and where people want to shop, Discover will be there.
What is the coolest thing in your office right now?
A handwritten note by my nine year old, daughter, which keeps me grounded and reminds me of the importance of family.
And, in the spirit of the holiday season, what’s at the top of your holiday wish list this year?
A new computer and more free time.