Why Retailers Are Ho-Ho-Hoping for a Merry Holiday Season

By: Melody Gintert, Director, Market & Consumer Insights, Alliance Data’s card services business

Holiday season is a time for families and friends to gather, but it can often be expensive (and overwhelming) for consumers who entertain guests and purchase gifts for many people. Historically, Black Friday has been a day when consumers could tackle all their holiday shopping needs and get a good price, but with brands now offering similar deals throughout the year, consumers are planning ahead and getting most of their holiday shopping out of the way early. According to a pre-holiday study conducted by Alliance Data’s card services business, more than half of consumers will have the majority of their shopping finished before December, and even 8% will have all their shopping done by then, making for more family time during the traditional holiday season.

What’s in store for the holidays?

While mobile shopping is on the rise, when it comes to holiday
shopping, there’s still something special about hitting the mall (who doesn’t love seeing all the decorations?). While 63% of consumers expect to do at least half of their holiday shopping in a store, if the experience isn’t hassle-free, consumers will stay home and enjoy the convenience of online shopping. For the last few years, many stores opened their doors on Thanksgiving day for early-bird shoppers, but not everyone has been excited to leave their holiday dinner early to wait in long lines. Even more importantly, public backlash for stores choosing to open on Thanksgiving day has been significant. This year, some stores are keeping their doors closed on Thanksgiving, banking on a boost in online sales (which makes sense, as 80% of Thanksgiving purchases will be made online this year, according to PwC). According to our research, Black Friday is also unlikely to draw as many customers as years past, with many saying they’ll wait to buy on Cyber Monday to avoid the holiday crowds:

 Consumers planning to shop on

• Black Friday – 45% (down 14% from 2014)
• Cyber Monday – 42% (up 9% from 2014).

’Tis the season of giving

While many of us typically have that one gift we hope to get (like the Official Daisy Red Ryder Range Model 1938 Air Rifle BB Gun that Ralphie wanted in A Christmas Story, one of my personal favorites), when it comes to giving gifts to friends and family, consumers say it’s up to the giver to pick out the presents – 63% won’t make a wish list (41% say it’s because they want to be surprised). Even after consumers wrap up their holiday gift purchasing, they’ll find other ways to give. The holiday season inspires more generosity than usual, and 39% make more charitable donations around the holidays.

More to give, more to get

Millennials aren’t all broke students who are unable to afford gifts.
They’re getting older and have more money, so naturally, we’re seeing changes in their holiday spending. According to PwC, 47% of Millennials will spend more for the holidays than they did last year (compared to 25% of those over age 35,) They’re also planning to spend nearly a quarter of their holiday budget on themselves! This might not come as a surprise, since Millennials are sometimes stereotyped as being self-interested, but Millennials are moving into their first homes, getting married and starting families. Going through these major life changes means they need things they’ve never needed before.

Overall, it’s clear that holiday spending preferences continue to evolve, and consumers have their sights set on great deals and convenient experiences, no matter when or where they shop.

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Melody Gintert is the Director of Market & Consumer Insights at Alliance Data’s card services business. Melody and her team use various research methodologies to explore and capture the thoughts, perceptions and behaviors of consumers to deliver on Alliance Data’s Know more. Sell more.^® promise.

Don’t Spook Consumers: 4 Valuable Halloween Trends for Retailers

by Tom Colven, Senior Strategic Insights Analyst, Alliance Data

Superheroes, zombies, princesses and Hunger Game heroines are some of the costumes we can expect to see on kids ringing our doorbells in a couple of weeks. Halloween is when jack-o-lanterns fill neighborhoods that are decorated with everything from lights to inflatables, and adults hoard mini candy bars like if they were preparing for a zombie apocalypse. For retailers, Halloween is that shopping season that falls in between back-to-school and holidays, and the one that is most impacted by economic downturns and a great measure of consumer confidence.

Here are the top 4 Halloween retail season trends we expect to see this year:

1. The Halloween Shopping Season Keeps on Rolling

What used to be a one-month retail season now extends into early September, and with the popularity of online shopping for Halloween decorations and costumes, purchases are happening earlier in the year, and promotions tend to be more year-round. This is partly driven by online shopping, which has gotten consumers used to purchasing seasonal items outside of the promotional period.

2. The Silent Monstrous Rise of DIY Halloween

With women driving the Halloween purchases of decoration and costumes, I had to wonder. Did social media sites like Pinterest and the large number of do-it-yourself blogs that demonstrate 100,000 ways to decorate your home with pallets impact seasonal decorating? When looking at the rise of Pinterest’s popularity specifically, the National Retail Federation shows that Halloween decoration sales rose certain years but last year dropped back down to $1.9 billion, the amount spent in 2011. Meanwhile, costume spending also dropped back last year to its 2011 amount at $2.5 billion. Look for trick-or-treaters dressed as pallets on your front porch, unless there is a crafting burnout and consumers return to manufactured decorations and costumes again this
year.

3. Oh the Tangled Web Our Love Of Miniature Candy Weaves!

There’s just something about that Halloween candy…  While other Halloween shopping categories have dropped back down to 2011 spending levels, candy is the one category that continues to see an increase. Consumer maybe buying their Halloween candy early when retailers begin stocking them, only to end up eating it all, which requires them to buy more for trick-or-treaters. Or maybe consumers, who’ve felt the pinch of rising healthcare and cost of living that negated any wage increases feel Halloween candy is a small, enjoyable splurge that brings nostalgic feelings in that one little bite. No matter how much consumers may say they are looking to eat better, their love of Halloween candy says they aren’t willing to give up all treats.

4. It’s the Great Online Shopping Pumpkin, Charlie Brown!

Although Halloween costumes might seem like an item consumers prefer to try on and see in person at a brick-and-mortar store before purchasing, reports from the National Retail Federation show that online retailers are a disruptor like they are for other holidays. A report from the National Retail Federation shows that 31% of consumers will search online, while 27% prefer to search for costumes in store. In fact, 1 in 3 people report using social media for inspiration, a huge opportunity for brick-and-mortar retailers to stand out by marketing their Halloween merchandise through digital and social media channels to inspire shoppers and turn that inspiration into sales.

The most interesting facet of Halloween retail sales might be their correlation each year with holiday sales. In the past, back-to-school sales were considered to be one of the best predictors of how holiday sales would fare, but at Alliance Data, we recognized years ago that there is a more direct correlation with Halloween sales. We’ll make our predictions on whether this year’s holiday sales will be naughty or nice in a blog post next month. Stay tuned!

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Tom Colven is a Senior Strategic Insights Analyst at Alliance Data. In his role, he ensures leadership and associates are provided with timely industry, competitor, and market-related intelligence and analysis that supports and aligns with the company’s business decisions and growth.