of shoppers are planning to spend the same or more this Christmas
of consumers plan to do more of their Christmas shopping in store this year
of consumers are planning to complete their Christmas shopping before mid-December this year
Our research shows that overall, most shoppers are planning to spend at least the same or more at Christmas this year which is good news for retailers. However, looking at shopping preferences by age group, the Millennials emerged as the most confident, with 80% spending the same or more compared with only 64% of Baby Boomers. Interestingly nearly one quarter of Baby Boomers planned to spend less at Christmas this year.
For retailers, this may mean focusing attention to the younger, more confident shopper who is out with the intention to spend more. Successful retail concepts have proven their ability to be either:
Competition for a shopper’s Christmas dollar is broader than the competitor who looks most like you – it’s about who competes for your shopper’s dollar.
When it comes shopping, consumers are still attracted to the physical store environment.
There are some interesting trends by generation however, with almost one quarter of Millennials planning to spend more online this year. Baby Boomers aren’t as comfortable as other generations shopping on mobile, with around 70% stating that they don’t use this channel at all. This compares with only one third of Millennials.
While online is a growing portion of total retail in Australia, the physical store is still the preferred channel. However, we know that a shopper’s journey is not linear and most likely they have researched on-line before arriving in store. Customer data is the single biggest currency a retailer can possess and utilising this information appropriately is key to success. According to PwC’s 2017 Total Retail Report, huge gaps exist today in the data retailers possess and their ability to glean insights from it. The retailers who have invested in data analytics capability are winning in the war to be more personal, more relevant and more responsive to shoppers today.
While the phenomenon of 'Black Friday' and 'Cyber Monday' is still relatively immature in Australia, what cannot be denied is shoppers are planning to bring forward their Christmas spend this year, likely driven by the increased promotional activity employed by retailers earlier and earlier each year. Around 90% of consumers plan to finish their Christmas shopping by mid-December, an increase of 8% in 2016.
For retailers, this means Christmas may come early, so don’t wait until the last minute to target your customers. 28% of consumers ranked online / social media as their number one source of Christmas gifting inspiration and this was even higher amongst Millennials (37%). Traditional TV advertising appears to have lost relevance, with only 3% of respondents citing it as their main source of product research. Some retailers will be glad to hear that the catalogue is not dead! This is particularly true amongst the Baby Boomers, with 21% of respondents using this medium as their primary source of Christmas inspiration. It will be interesting to see how Amazon shifts the dial on the use of online market place product searches – globally over 55% of product searches begin on Amazon, compared with only 5% of our Australian respondents.
Our latest survey results indicate that across all surveyed items, shoppers undervalued additional retail services and technology. We note that the ranking increased slightly across all metrics with younger consumers.
Our expectation is that the importance of these additional services and technology will rise significantly in the near future. The entrance of Amazon in the Australian market will lift the bar when it comes to customer experience and retailers should be ready to respond with more than just price.
National Retail & Consumer Leader, PwC Australia
Tel: 613 8603 3136
Retail & Consumer Leader, Financial Advisory, PwC Australia
Tel: +61 3 8603 3886
National Thought Leadership Manager, PwC Australia
Tel: +61 2 8266 0252