More than half of consumers surveyed intend to use mobile devices such as smartphones and tablets in-store, indicating that luxury retailers should up the bricks-and-mortar experience to entice affluent buyers, according to findings from a study by Accenture retail practice.
Seventy-one percent of affluent consumers surveyed will spend more than $500 on gifts this holiday season, providing an overall boost to retail sales. However, one major factor going into the most lucrative sales season is the volatile stock market, which traditionally has tightened purse strings, even for affluent consumers.
“If you’re at the lower end of the retail spectrum, then the considerations are things such as meeting the needs of the consumer through smaller pack sizes,” said Chris Donnelly, a senior executive at Accenture retail practice, New York. “However, at the top end, it is all about understanding the level of service that your customer is seeking and the exclusivity of their brand or product.
"Luxury is a pretty good segment at the moment, so retailers need to stay focused on what their customer is looking for from them,” he said.
Online while in-store
Whereas 72 percent of U.S. consumers expect their holiday spending to be controlled this holiday season, affluent consumers making more than $100,000 are expected to spend more on gifts.
This is indicative of high-income shoppers providing a boost to retailers this season, according to the study.
Therefore, stores should focus on providing in-store experiences and services to add value to themselves, per the study.
Approximately 54 percent of consumers intend to use smartphones in-store to check prices, 43 percent to find a better deal and 40 percent to stay out of crowded stores.
Source: Accenture
Furthermore, 44 percent of tablet users intend to use the devices to stay out of crowded stores, 36 percent to find better deals and 35 percent to take the devices in-store to compare prices.
Additionally, 43 percent of those holiday shopping with their mobile or smartphone believe that it will help them to bag better discounts and one-third will use their device to receive alerts when a product is in stock, according to the study.
Affluent consumers who have a higher net income and are more likely to be able to buy expensive smartphones and the accompanying data plans are more inclined to spend more this year.
The main reasons for this are increased discretionary income and desire to treat themselves and families after a tough year.
In fact, 84 percent of consumers said that they are determined to make this holiday season great for their families, according to a study from American Express Publishing and Harrison Group (see story).
“The high-income segment should be fine in 2011,” Mr. Donnelly said. “For most in this group, it’s been a reasonably good year.
“Corporate profits are still up, and for most that translates into bonuses,” he said. “However, the x-factor is the ongoing stock market volatility, which can make it hard for people to feel totally comfortable spending.”
Internet clicks
Mobile will continue to play a part in holiday spending, but consumers will also spend a considerable amount of time shopping online.
Despite the high numbers, consumers shopping online have actually dropped 3 points to 66 percent this year from 69 percent in 2010.
Oddly enough, holiday online shopping shot up from 41 percent to 59 percent in 2010, according to the study.
Courtest of Accenture
The biggest draws for consumers online are free shipping and finding better discounts, whereas 47 percent just wanted to stay away from the crowds.
Other holiday spending reports have foreshadowed this data.
For instance, in-store customer experience and strong brand persona are some of the main drivers for affluent consumers shopping for the holidays (see story).
Luxury brands that try to discount too severely may run the risk of diluting their image.
“Luxury retailers need to avoid getting sucked into the middle ground between the higher and lower ends of the market, and so they must be careful about chasing customers with promotions and discounts, as they can threaten the exclusivity of the brand,” Mr. Donnelly said.
Final Take
Rachel Lamb, associate reporter on Luxury Daily, New York