Booz & Company Identifies Consumer Behavior Trends Shaping Holiday Retail in 2012

New York, NY, September 18, 2012 — In-store competitive browsing, heavy online shopping and downloaded gifts top the new shopper behaviors expected this holiday season, according to Booz & Company in its Holiday Retail Outlook 2012. Booz & Company found that while holiday retail sales will remain flat or only slightly up from last year, emerging consumer buying trends will have significant implications for retailers. Overall, consumers will remain cautious with spending, and they expect to find many deals.

Booz & Company conducted a 1,600-person informal survey of consumers, retail store staff and retail executives to determine buying habits and potential trends for this holiday season. The firm also conducted more than 150 interviews in stores, malls and airports during August–September 2012.

Nicholas Hodson, partner in Booz & Company’s Consumer & Retail practice, said, “Retailers will need to adjust their holiday sales strategies to embrace an evolving consumer mind-set, favoring a more seamless shopping experience through smartphones and in-store opportunities.”

Here is the breakdown of the consumer mind-set and purchase focus for the holiday:

Consumer Mind-set Findings Purchase Focus Findings
52 percent of consumers will closely consider affordability in their shopping decisions. 62 percent of consumers do not have consumer electronics items at the top of their personal wish lists. Tablets and smartphones top the list for those who do want electronics.
73 percent of consumers expect to find great deals this season, compared with 62 percent last year. Home entertainment should be strong; 62 percent of consumers report they will shop for it. One hot trend is that 3-D movies may finally break through into the living room as a wave of superhero movies hit the stores.
51 percent of consumers report that economic survival is a great reason for celebrating this year. Downloadable gifts will become a distinct and rapidly growing category this year, as 45 percent of consumers expect to give at least one downloadable gift, for example, an e-book, a music download or a movie.
53 percent of consumers intend to buy at least one luxury item (up from 41 percent last year), and the item is likely to be one the whole family can enjoy. Apparel looks set to grow at a healthy rate this season: 42 percent of consumers intend to buy apparel items as gifts, up from 37 percent last year.
Consumers are looking forward to the holiday more than last year; 53 percent expect to host multiple gatherings, compared with 45 percent last year. More than 80 million shoppers plan to purchase gift cards this season, about 4 percent more than last year.

Implications and Opportunities for Retailers
In terms of consumer buying behaviors, multichannel shopping will be a core part of how consumers shop. Expect most customers to be simultaneously browsing in-store and on their smartphone. Forty percent of surveyed consumers describe “showcasing” as their new shopping strategy: browsing in-store before buying online, which creates a major challenge for bricks-and-mortar retailers.

“The biggest challenge this season for bricks-and-mortar retailers is determining how to drive more than their fair share of ‘showcasing volume’ to their websites rather than or another competitor,” said Thom Blischok, chief retail strategist for Booz & Company.

“While technology enhancements and economic uncertainty will both impact this holiday season, there is a dose of optimism compared to 2011, as people shop with a value-seeking mind-set,” said Blischok.

Winning strategies for retailers this holiday season will include:

  • Developing seamless digital and physical experiences; for example, using QR code–driven promotions to convert a sale, considering free shipping on targeted items, using loyalty points to drive conversion or using online competitor price matching sparingly to drive price perception
  • Preparing online and mobile technology platforms for high volumes, because crashing apps will discourage consumers
  • Ensuring that sales associates are intimately familiar with both the website and any mobile offerings so they can help customers navigate among different buying channels in real time
  • Offering free shipping on targeted items or basket sizes. Shoppers are increasingly savvy about their all-in costs; last year free shipping was a major online sales driver, and we expect more of the same this year

The Booz & Company report, “Holiday Retail Outlook 2012,” can be downloaded here >
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Contact Siobhan Ford
North America Marketing
Telephone: +1-978-314-6382
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