The tides of shopping have changed, and consumer behaviors are the proof – this season, kick back and don’t even worry about the door-crashers.
For better or for worse, Holiday shopping has become about as important a part of the season as the nativity story itself. The days of A Charlie Brown’s Christmas’s non-commercial moral seem like a vestige of a bygone era, reserved for an annual half-hour time-slot – purchasing power rules the season, and retailers are counting on consumers to fill their coffers in record numbers every year.
As with every shifting industry, the holiday retail game continues to adapt to the wavering behaviors of consumers. What once was a mall visit is now a series of web reviews. What once was a doorbuster event is now accomplished in a leisurely series of clicks. Where are the changes really being felt, and how can we glean any insight from the fluctuating trends?
To start, let’s look at the increasing influence of online shopping. While malls haven’t gone away by any stretch, the growth of online is significant. According to a 2014 International Council of Shopping Centers report, “e-commerce, up 17 percent this year, is outpacing in-store growth by a 5 to 1 ratio. However, in-store growth still amounts to $144 billion, compared to online sales' growth of $38 billion.”
So, considering the numbers, what specifically does this mean for retailers?
Fewer Fistfights, and Less Shoving
This year, the Internet is indeed succeeding in bringing more peace and love to the season – by way of less physical competition at stores. Deliotte’s annual holiday survey shows that nearly half of all consumers no longer rely on Black Friday the way they once did. In an age where consumers, especially younger ones, don’t garner the same joy from heading out on a weekend to shop, retailers are taking notice and accepting money however they can get it.
Holiday deals are increasingly posted ahead of time, giving ample time for consumers to plan and prepare the gift lists; online-only specials are increasing in abundance, saving brick-and-mortar stores the hassle of stacking thousands of SKUs in retail locations in preparation of an influx of customers.
Store-wide sales on Cyber Monday have outshined Black Friday proper – and have become a two-day event in the process.
As usual in a free-market economy, more competition and disruption of the status quo means one thing: a better time for the consumer. In the past few years – price matching is one store trend that has exploded, requiring little more than a customer to pull up a competing store’s website on their phone. This includes online retailers like Amazon or Zappos – retailers that are saving money compared to their brick-and-mortar counterparts, and are already able to offer more enticing prices.
Related to this, one of the major stories of the season has been the price-matching fiasco involving the $90 PS4 acquired by crafty consumers who were able to exploit a loophole in Wal-Mart’s online price-matching policies. Due to Amazon’s ability for third-party sellers to post their own marketplace items, consumers needed only display the fraudulent listing for the ultra-cheap console, and front-line staff had little choice but to honor the general policy.
The Rise of the Shipping Company
In the face of this online shopping increase, prices are no longer necessarily the one golden ticket to invite a consumer into yourdigital storefront. With online ordering, the endorphin rush of retail therapy only reaches its zenith when the package you purchased (and perhaps even forgot about for a few days) arrives. There’s big competition in shipping, and customers are realizing the difference.
Amazon raised eyebrows earlier this year with stories about technology it was developing that would ship packages before consumers made the purchase, based on predictive behaviors. But they’re onto something – studies are continuing to show that not only fast shipping but free shipping are drawing consumers back. “59% of consumers say they consider shipping costs when making online purchase decisions. Those costs stand as the most cited consideration in the survey involving purchases.”
More Than Meets the Mobile
Heavy mobile users know the benefit of more information: better reviews, real-time information through Twitter, and the ability to learn of a deal and immediately purchase it from your phone if time is of the essence. But few are aware that retailers are making use of the same information to sometimes alter the experience for a user, depending on their personal behaviors. Your sneaking suspicions of ever-changing prices may not be groundless.
A Northeastern university study analyzed just that. Looking at consumer behaviors such as frequency of mobile usage, Zip code, sites consumers regularly visited, and even type of phone, evidence is showing that prices would change between users.
From a summary on Wired: “According to the study, presented [in early November] at the Internet Measurement Conference in Vancouver, major e-commerce sites including Home Depot, Walmart, and Hotels.com list online prices that are all over the map, and in some cases, these prices are “personalized” to the behavior of particular shoppers, including whether they shop on a phone or on a desktop.”
The study covers a lot of ground, but one of the main insights is this: prices, on average, show up cheaper on mobile. This is due to various reasons - retailers showing a proposed deal as an incentive to download an app, for instance. Things like cookies made a difference too – people who had no cookie history on file, on average, saw slightly higher prices overall. One more incentive to log into your accounts before browsing?