Malls Bank on Experiences for a Successful Holiday Season

The holiday shopping season is in full swing! Where are consumers expecting to spend most of their shopping time? Not at a mall, according to the Synchrony Financial “2017 Pre-Holiday Study.”

The holiday shopping season is in full swing! Where are consumers expecting to spend most of their shopping time? Not at a mall, according to the Synchrony Financial “2017 Pre-Holiday Study.” The study shows that about 50 percent of consumers expect to do their holiday spending in a store, but out of that, only 38 percent of in-store shoppers plan to do that shopping in a mall.

Synchrony Holiday Shopper Insights In-Store PurchasesWhere will shoppers go instead of the mall? The majority of consumers (66 percent) say they will spend some time going to mass merchandiser retailers (e.g., Walmart, Target, etc.) and half of store shoppers say they will visit a stand-alone specialty apparel store.

The benefits of going into these stores are the one-stop shopping element. Mass merchandisers have a wide variety of items available at a relatively low price. So, you can buy a sweater for grandma and a toy for little Johnny without a lot of walking around. Stand-alone specialty apparel stores have the benefit of available parking and more personalized service.

Synchrony Holiday Shopper Insights Via GenerationsIf you do venture into the mall, the people you are most likely to see are Gen Z and Millennials. Those aged 18- to 25-years old are the ones who intend to spend the most time at the mall this year, with over 40 percent of them saying they will shop at a mall. The Gen X and Baby Boomer populations (aged 36 to 65) are the ones who say they will stay away. Only 33 percent of this population say they will be mall shopping.

Retailers have been putting an increased focus on strategies to get consumers to walk through their doors. Many retailers now give shoppers the ability to order online and pick-up in-store. This not only saves time for the consumer, but also gives the store the opportunity to up-sell or cross sell other items. Other retailers have been putting interactive experiences and restaurants in their stores to increase the “fun” factor. The last time I walked into a Williams Sonoma store, they were cooking an entire turkey dinner!

The future of the mall depends on maximizing these experiences. There are malls that have added restaurants, art installations and even amusement parks as part of the effort to draw more foot traffic. Many retail experts feel that the survival of the mall lies on its ability to attract shoppers with innovative services and entertainment, in addition to stores and products.

* Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents from the Synchrony Financial 2017 Pre-Holiday Study unless otherwise noted.

Back-to-School Shopping Season Is Here, Marketers

Welcome to the second biggest shopping season of the year: It’s Back-to-School season and it’s promising to be a good one. According to a survey conducted by Synchrony Financial of parents of K-12 students, parents of college students, and college students themselves, parents are pretty upbeat about the economy and their own financial situation this year.

Welcome to the second biggest shopping season of the year: It’s Back-to-School season and it’s promising to be a good one. According to a survey conducted by Synchrony Financial of parents of K-12 students, parents of college students, and college students themselves, parents are pretty upbeat about the economy and their own financial situation this year. More than half (53 percent) of parents of K-12 kids expect to spend more this year than last year.

This is good news, and is driving an expected increase of back-to-school spending between 3.7 percent and 4.1 percent (This growth forecast for the three-month Back-to-School shopping period of July-Sept. 2017 is based on analysis of macroeconomic variables and trends).

Credit: Synchrony Financial

What is driving this increase? One reason could be that parents of K-12 kids are feeling confident about their jobs and pretty good about their financial situation. Sixty three percent of parents say their financial situation has improved this year, and three quarters feel confident about their jobs. That’s a 10 point jump from last year, when only 53 percent of parents felt this level of confidence.

So, parents are feeling like they can spend more on deserving offspring who have done Vulcan mind-melds with the pool and video games over the long summer. What will they spend money on? Clothing is the number one item. Kids tend to grow, and clothes that fit them last year won’t work — and older siblings’ clothes only go so far. Ninety-four percent of parents of K-12 youngsters are expecting to spend money on everyday clothes, totaling about $183 on average.

But that’s not the big growth item. The biggest growth category is electronics. Forty-five percent of parents are expecting to spend more money than last year on computers and electronics. Also, 46 percent of them say the supply list from schools have gone up, leading to spending more on notebooks, markers and other supplies.

How about parents of college kids and college kids themselves? They are not as optimistic about the economy and their own financial situations because, well, they’re paying for college. That takes quite a bite out of the family nest egg. Only 40 percent of college students say they feel confident about their overall financial situation, and only 15 percent are confident in the strength of the economy. That does put a damper on spending on discretionary items.

But, at least they’re done growing, right? No need to spend a ton of money on clothes and shoes, but college kids and their parents are spending a good amount of money on other items. The data shows that parents of college age students spend about $205 on average on electronics, but less on clothing and shoes for back-to-school. Forty-five percent of college parents are expecting to spend more on computers than last year, similar to K-12 parents.

So, when is all this spending happening? If you think college students procrastinate in shopping, similar to how they do their college papers, you would be absolutely right. About 70 percent of parents of kids K-12 are done spending by the end of July. But half of college students don’t start until after August. Almost 30 percent of them wait until after Aug. 15. Hey, at least it gets done, right?

Will this level of confidence and spend extend to the holiday season as well? It’s too early to tell at this point, but this is a beacon of hope, in a sea of bleak news in the current retail marketing landscape.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents.

Forecasting a Cheery 2010 Holiday Shopping Season for Paid Search Campaigns

With the holidays fast approaching, news and economic trends relevant to this year’s holiday shopping season have been mixed, though generally favorable. A recent study by ChannelAdvisor revealed that 81 percent of shoppers plan to spend the same or more on holiday gifts this year. The study also found that more of that shopping will be conducted online.

With the holidays fast approaching, news and economic trends relevant to this year’s holiday shopping season have been mixed, though generally favorable. A recent study by ChannelAdvisor revealed that 81 percent of shoppers plan to spend the same or more on holiday gifts this year. The study also found that more of that shopping will be conducted online.

From a performance perspective, actively managed holiday paid search campaigns delivered impressive results during the 2009 holiday shopping season in comparison to the rest of the year. In 2010, these campaigns have already achieved strong year-to-date (YTD) growth. This strong YTD growth will likely continue into the fourth quarter, and Performics predicts this will net out to 15 percent year-over-year (YOY) growth for actively managed holiday paid search campaigns. The results could be even stronger for search advertisers who are able to make Q4 outshine the rest of the year like they did in 2009.

Either way, all signs point to growth for these campaigns, and marketers should keep the following opportunities in mind:

Continued emphasis on value. Free shipping and discounts have become standard as retailers continue to vie for cost-conscious consumers. Average order value is down 9 percent YTD according to a Performics Holiday Retail Group report, and this trend will likely continue into Q4. Providing offers on upsell or cross-sell products can help boost order totals and offset free shipping and other discounts merchants offer.

Delayed shopping as savvy consumers research and wait for late sales. The first two weeks in December 2009 saw sales increase by 27 percent compared to 2008, while Black Friday sales decreased 17 percent YOY. Sales during the last week of free standard shipping prior to Christmas also increased significantly in 2009. However, numbers may shift this year if consumers feel more confident with compelling sales already underway. The recently released Compete Holiday Insights survey found that 50 percent of consumers have already started holiday shopping.

Shoppers are reaching for their phones. Nearly half of adult smartphone owners younger than 25 will use their smartphones to shop this holiday season, according to a new survey from the National Retail Federation and BIGresearch. An increasing share of overall clicks are coming from mobile — 6.7 percent in September, and projected to be greater than 10 percent within 12 months.

Improved efficiency of last-minute shopping. Consumer spending and cost per clicks dropped dramatically following the last week of free standard shipping prior to Christmas 2009. Active paid search advertisers can do more for less after Dec. 17.

Marketers looking to capitalize on these opportunities and improve holiday performance should consider the following recommendations:

  • follow best practices to actively manage campaigns and effectively respond to market forces;
  • offer aggressive promotions early to capture shoppers;
  • actively participate in the last week of free standard shipping prior to Christmas;
  • embrace mobile to ensure the channel’s increasing user base can find you when searching; and
  • continue active management of paid search beyond Dec. 17 to further boost efficiency.

By following shoppers’ changing behaviors this holiday season — and planning and executing campaigns accordingly — marketers can boost their odds of a jolly holiday.