Accenture’s Annual Holiday Shopping Survey suggests retailers have good reason to be cautiously optimistic with consumers planning to increase spending this year.
Here are the three trends that retailers should watch out for this season:
Trend one: Cautious optimism, as deal-seeking intensifies
Consumers plan to spend an average of $819 this season but retailers need to cater for a group of deal seekers who love a bargain and are driven by promotions, incentives and savings.
More than two-thirds (69%) of consumers rated price and value among the most important factors in deciding what retailer to buy from, and 31% said they will shop as and when they are offered promotions or discounts.
Accenture says retailers should look beyond standalone sales events such as Black Friday and Cyber Monday and put in place a dynamic sales and marketing plan anchored around existing inventory and that can be adapted as demand fluctuates.
With 44% of shoppers planning to shop between early November and early December, retailers need to pay close attention to data and analytics to carefully balance how and when to offer promotions and discounts, while preserving profit margins.
Trend two: Gift cards are the untapped revenue accelerator for retail
Last year, almost three in five (58%) consumers received gift cards. This year, 35% of consumers plan to allocate their holiday spend to buying gift cards. Yet, despite being a popular choice among holiday shoppers, four in ten of the recipients surveyed said they failed to redeem the full balance of the card, resulting in an unspent balance of $134, on average, per consumer.
More than two-thirds (68%) of consumers perceived buying a gift card as an easy and safe option. For those on the receiving side, nearly close to one in three (28%) were disappointed that the person hadn’t put time and effort into planning a personalised gift.
While the purchase of a gift card immediately translates into revenue for the retailer, unredeemed cards represent a significant missed opportunity.
Accenture says for retailers to make the most of the gift card opportunity, they must make the cards easy to purchase, use and manage. Recipients of gift cards told Accenture that simplifying balance check options (46%), regular reminders of unspent balances (38%) and an easier redemption process online and in-store (31%) would help ensure they use their gift cards.
Retailers can increase customer satisfaction and generate loyalty through enhancing the gift card experience, making it less transactional and more personal. For example, suggesting beauty products for cold weather conditions that match the balance of the gift card, while providing personalised advice on how to incorporate it into a daily regimen.
Trend three: Buyers block in the quest for the best
As holiday shoppers search for the perfect gift for friends and loved ones this season, six in 10 (62%) don’t know where to start and seven in 10 (70%) are worried they’ll make the wrong purchase decision and regret it.
With more than eight in 10 (83%) of shoppers wishing they could make decisions on what to buy more quickly, easily and confidently, and almost three quarters (73%) saying they would welcome inspiration, retailers can differentiate and drive revenue through inspiring and guiding consumers at each stage of their shopping journey.
However, almost three-quarters of consumers (72%) could face buyers block – the effect of feeling overwhelmed by the number of options to choose from. The majority (76%) say they will abandon their shopping carts due to frustration or indecision, and nearly one in four (24%) will shop elsewhere.
Retailers with physical stores could be set to gain this holiday season as 57% of consumers – rising to 60% among Gen X consumers and 77% among Boomers – say they prefer to visit physical stores to see and assess products firsthand. Successful retailers will apply creativity to store layouts to maximise the sales for each square foot of their allocated selling space. For example, a dedicated area for gift wrapping or personalisation services.
Innovative retailers are empowering store associates to display their expertise and help inspire and advise shoppers, welcome news to the 40% of consumers who appreciate personal customer support.
Gen AI can act as a personal shopping advisor with human-like response abilities suggesting gift ideas or advice on wrapping. The survey found that the vast majority (93%) of consumers agree gen AI could help them find better gifts, while 92% value the recommendations.
Accenture Australia and New Zealand retail lead, Tom Priestley said, “It is encouraging that consumers are planning to spend more this holiday season, but with this optimistic outlook comes a reminder that price and value remain front-of-mind for many. Then there’s the challenge of where and how consumers experience a retailer. Everything from the adverts and digital marketing they receive to the online and in-store experiences, to the customer service they encounter along the way.
“Successful retailers will harness the power of their brand as a magnet to draw customers to shop with them over their competitors. It will require paying even closer attention to customer data, ensuring promotions, marketing campaigns and advice are tailored to individual customers with much greater precision.
“Consumers are open to receiving advice and inspiration to help check things off their holiday shopping ‘to-do’ list. But there’s a careful balance to strike between being a helpful and trusted advisor and bombarding them with too much choice and information.
“As a category, gift cards have tremendous potential to be reinvented. Building creativity and interactivity into the experience can help evolve gift cards from a last-minute, mind-blank gifting solution, into a thoughtful and personal gift that customers are excited to give, and recipients are excited to use.”