November 21, 2011
Ecommerce transactions have been creeping up on in-store sales for a few years, but the digital channel is forecast to finally overtake the traditional shopping medium this holiday season, according to findings from a study by American Express Publishing and Harrison Group.
The main reason for the change is that there is more convenience, merchandise and price-comparison accessibility online than in-store. Therefore, brands are encouraged to make their in-store experiences not only convenient but entertaining and interesting.
“This is the first year that we’ve seen intention to buy online overtaking intent to buy in-store,” said Jim Taylor, vice president of Harrison Group, Waterbury, CT.
“Brands need to understand that one of the characteristics of Black Friday is that people expect entertainment in-store since everyone is aware that they have the option of shopping online,” he said. “Stores need to be courteous, fun and accommodate a lot of needs.”
The Q4 2011 Survey of Affluence and Wealth in America by Harrison Group and American Express Publishing examined the spending habits of the wealthiest 10 percent of U.S. consumers.
These consumers have a discretionary income of at least $100,000, a group that is expected to account for 23 percent of total 2011 holiday spending.
Internet clicks
Approximately 37 percent of participants said that they planned to shop more online than in-stores. Of that number, 9 percent said that they would shop exclusively online and 24 percent said that they planned on shopping both mediums, but would spend more time online.
In contrast, 34 percent of consumers surveyed said that they planned to shop more in-store than online. Of that number, 12 percent said that they would shop exclusively in-store and 22 percent said a mix of the two mediums.
To finish, 24 percent of consumers said that the shopping mix would be even between in-store and online shopping.
In terms of convenience, 71 percent of consumers say that online is the preferred channel.
Furthermore, 53 percent believe that the price is better online, 39 percent say that the size selection is better and 31 percent say that the style selection is better. Online beat in-store in all of these categories.
Even though price is not necessarily a factor for affluent consumers, they still like bargain hunting and will take something if it is the same value but cheaper, per Mr. Taylor.
“It’s not about saving money, it’s about making money,” Mr. Taylor said. “If you were to buy your wife a pearl necklace and the quality isn’t going to change but you can substantially reduce the price, of course, you’d go for the lesser one.”
Seasons of love
Interestingly enough, while less-affluent consumers who were surveyed will be spending approximately 10 percent less this year, the most affluent chunk plan to spend approximately 7 percent more than last year.
Furthermore, consumers are more focused on quality rather than quantity this year, which is proving beneficial for luxury marketers.
Shoppers are looking for gifts of significant meaning, which means that they are likely to clean out the good inventory during Black Friday as well as throughout the season, per Mr. Taylor.
That said, consumers are much more interested in spending time with their family and friends than buying many gifts.
“As far as holiday shopping is going, the biggest and most important issue is the growth and the view of the holiday in the family,” Mr. Taylor said.
“The increasing attention in the media has pretty much gone away and is being replaced by nuances of affection and love within the family,” he said. “If there was ever a silver lining with the recession, this is up there.”
Final Take
Rachel Lamb, associate reporter on Luxury Daily, New York
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