Booming consumer confidence will welcome online retailers with a happy holiday season
Every year at this time, brand marketers, advertising agencies and media planners across Madison Avenue partake in a familiar ritual — fretting over whether their businesses will have a merry holiday shopping season filled with good tidings and cheerful retail returns or be left holding a coal-stuffed stocking of disappointing sales.
According to the National Retail Federation, for some retailers the holiday season can account for as much as 30 percent of annual sales, highlighting the frantic state many find themselves in as they wait for any indication of consumer purchasing intent.
The good news for retailers and brands alike is that according to a national survey conducted recently by The Harris Poll and OpenX, consumers this year are primed for the holiday shopping season.
The study of more than 2,000 U.S. consumers found the majority of shoppers believe the economy is doing better today than it was one year ago, and 75 percent believe it will continue to improve over the next year. These strong consumer confidence metrics should translate to fruitful sales for retailers in Q4, as more than 80 percent of shoppers plan to spend the same or more on gifts this holiday season as they did in 2017.
Against this backdrop, the research suggests that the consumer holiday shopping landscape will continue to experience significant changes. Media consumption habits and shopping preferences are shifting towards a new paradigm where consumers take full control over how, when and where they plan to spend more than $1 trillion this holiday season.
For brands and retailers looking to reap the rewards of a robust holiday shopping season, consumers are signaling several important shifts in how they consume branded content and ultimately execute their buying decisions. These new consumption trends have compounded the challenge of engaging shoppers in today’s highly fragmented media environment.
First, the survey data shows that linear TV continues to wane in its significance, with a quarter of all respondents reporting they have cut the cord entirely. Forty-one percent of millennials have walked away from TV completely, and for those that have yet to cut the cord officially, 73 percent no longer watch commercials while watching TV at all.
Second, the dramatic shift from traditional commercial TV to other screens and formats will have significant impact on brand advertisers as they struggle to meet consumers where they’re spending most of their time. As shoppers migrate away from TV, they are accelerating their use of mobile — 60 percent spend at least three hours per day engaged with their mobile devices. More than a third of millennials and one in four parents now spend more than six hours per day on their mobile devices — five times the amount they spend watching broadcast TV.
Finally, as content consumption habits shift further online and to mobile, so too are shopping habits.The Harris survey shows it is more important than ever for brands and retailers to build omnichannel engagement programs that meet consumers where they’re watching content — and where they’re choosing to make holiday purchases. Half of all consumers plan to spend a majority of their holiday budgets online and via mobile devices this year. Let that sink in.
Half of all shoppers will spend at least half of their budgets outside of traditional brick-and-mortar locations. Millennials, who plan to individually spend on average a little more than $800 this holiday, will lead this charge into mobile, spending about a quarter of their entire shopping budgets through a connected mobile device.
Advertisers need to make their holiday lists for media-mix spend and check them twice to ensure that they have developed smart omnichannel strategies to effectively reach the always-on shopper. Whether they’re looking to target the one in four consumers who now make weekly mobile purchases from bed, the millennials who plan to spend more on their pets than on their friends or family, or the 10 percent of all shoppers who now use smart speakers to help research holiday purchases, advertisers can’t afford to overlook how consumers are shopping in new and unique ways.
The key takeaway for brands and retailers reading the consumer tea leaves this year is the need to embrace change. Consumers are confident and they are planning to spend. To maximize return, brands and retailers must be prepared to think differently and to lean in and support new consumer paradigms around when, where and how their key audiences plan to shop this holiday season.
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