Early Holiday Shoppers on Bargain Hunt, Abetted by Walmart
Consumers seem to have adopted a set of expectations based on last year's holiday season that retailers really hoped they wouldn't.
According to the Accenture Holiday Shopping Survey, consumers are entering holiday season 2009 looking for the deep discounts that they experienced as retailers tried to shed excess inventory in 2008. If they don't find them, the study suggests, they may disinclined to spend beyond strictly budgeted needs.
"Holiday shopping in 2008 was defined by the huge discounts that were available, and available very early in the holiday season," said Janet Hoffman, managing director of Accenture's Retail practice. "In 2009, however, retailers will be reticent to offer such generous incentives in the face of rising commodity prices."
No matter what the retail reticence, the overwhelming majority of consumers -- 86 percent â€" claim they will not buy without a discount of at least 20 percent, the study determined, and a quarter of shoppers say they want at least a 50 percent break before they open their wallets.
"We have seen a 'shift to thrift' across all income levels during this economic downturn and breaking that habit will be the greatest challenge for retailers this holiday season," Hoffman said. "The winners this season will be the smart retailers that use the right customer data to offer the 'value' shoppers are looking for without destroying their margins."
Expectation that retailers will jump into the market with big discounts, which certainly are being validated by the major promotions Walmart has been launching and driving others to launch, is certainly behind some of the early holiday shopping that reports suggest is occurring.
The Accenture survey demonstrated that 69 percent of consumers expect to do the bulk of their holiday shopping by Dec. 7 compared with 60 percent in 2008. It also indicated that Black Friday, the only part of last year's holiday shopping season that showed real vitality, should be lively again this year. Even more shoppers, 52 percent versus 42 percent, plan to troop out the day after Thanksgiving to attack the sales events retailers must initiate to have a shot at decent holiday sales.
Another factor that stacks up against retailers is that only about a quarter of consumers have a hot gift in mind for a holiday season without any obvious standouts. For example, only 15 percent of consumers said they would purchase MP-3 players this year. However, 59 percent said they would purchase gift cards. That might not seem so bad, except that survey concluded that 44 percent of gift card recipients will maximize the value of the card by purchasing discounted items, and 25 percent will use their gift cards to buy regular, staple products rather than treating themselves to something more expensive. In that case, the gift card is replacing some of the cash the consumer would spend on everyday grocery and household products.
The survey did provide retailers with some inklings of hope. Among them, 70 percent of consumers said they would spend the same or more on holiday shopping this year versus the year earlier, as opposed to 60 percent in 2008. And 44 percent said they could be enticed into breaking their holiday budgets this year versus 40 percent last annum. But with two thirds of consumers saying they would use only or mostly cash for gift purchasing, it may be difficult for retailers to get folks to spend substantially more than they planned unless they employ -- you guessed it -- deep discounts.