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.

Are You Meeting Your Customers’ Mobile Needs?

Most of the U.S. population — 61 percent — say they use mobile phones for shopping activities, according to the 2017 Synchrony Financial Digital Study recently completed. But, what would resonate with them in terms of digital marketing and more importantly, what would drive their behavior?

Game Changing TechAs modern marketers, we put a lot of thought and effort into our digital marketing programs. The goals are to promote engagement with our brands, drive traffic to our website or encourage customers to walk into a store. Many times, the goal is all three.

Most of the U.S. population — 61 percent — say they use mobile phones for shopping activities, according to the 2017 Synchrony Financial Digital Study recently completed. But, what would resonate with them in terms of digital marketing and more importantly, what would drive their behavior? Based on the referenced survey, there are specific elements of mobile marketing that consumers tell they are interested in.

Significantly, 50 percent of consumers said if their favorite retailer sent offers to their mobile devices, they would shop there more often. Mobile marketing can include in-app messages, push notifications, beacon / location based offers, SMS messages and voice recognition.

Given this consumer interest, how many companies are investing in mobile technology? The answer is, it depends. According to “The State Of Digital: A Mobile Commerce Perspective: Forrester’s H2 2016 Global Mobile Executive Online Survey” by Forrester, nearly 70 percent of marketers say they are regularly using responsive Web design and mobile optimized websites. It seems that most companies have the basics of mobile user experience down pat. But fewer companies are actively marketing via mobile. Only about 40 percent regularly use SMS messaging or push notifications, and only one in three use in-app messages.

Another element of mobile marketing that consumers express interest in is location-based marketing. Almost half (46 percent) of all consumers said they would like to get relevant offers based on their location. This is overwhelmingly driven by millennials. For instance, 61 percent of those ages 18 to 25 would like location-based offers, steadily declining for each age group (only about a quarter of those 66 or over said this is the case).

But only 37 percent of marketers are using push notifications and an even smaller percentage (only 12 percent) are regularly using beacon/location support on mobile phones, according to the same Forrester study referenced above. There are certainly restrictions on SMS marketing (consult your legal advisor as to the permissions required), but some companies are still planning to implement these programs — about a quarter are planning to pilot/test SMS messaging, and 35 percent are planning to pilot/test push notifications in the future.

Mobile marketing is clearly an imperative for companies with large numbers of millennials in their current or target consumer base. And remember, Gen Z’s, the true mobile natives, are fast approaching behind the millennial population. They may be even more comfortable with mobile marketing than their millennial older siblings. Investments in mobile technology will certainly be crucial for many more marketers as these populations expect more from their favorite brands.

With the constantly evolving field of smartphone technology, people become more and more enamored of using their phone for anything and everything. Digital marketers are challenged to provide “delighters” to attract and engage the population that is most interested in using this technology. Successful digital marketing programs listen to the customer and proactively engage them, whenever and wherever they happen to be.

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 Digital 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.

The Consumer’s Journey in Making Big-Ticket Purchases

When we look at consumer behavior and what drives the purchase decision, it’s helpful to look specifically at smaller price points vs. big-ticket items. There are definite differences in the path-to-purchase for big-ticket items (i.e., items costing $500 or more).

[Today, Sue is hosting Ronda Slaven, a VP Research Insights and Thought Leadership at Synchrony Financial, as a guest blogger for The Consumer Connection.]

When we look at consumer behavior and what drives the purchase decision, it’s helpful to look specifically at smaller price points vs. big-ticket items. There are definitive differences in the path-to-purchase for big-ticket items (i.e., items costing $500 or more).

When I think about how I purchase shoes, for example, I go through a very different process than when I purchase a mattress. For shoes, I don’t spend a lot of time researching, and I must admit: Some shoe purchases have been impulse buys. But I can’t say the same for a mattress or flat screen TV.

Path to PurchaseIn the 2016 Synchrony Financial Major Purchase Study, we asked consumers specific questions about what they go through when they purchase items costing more than $500.

The results show that consumers spend a certain amount of time researching, both in-store and online. Additionally, some consult friends and check online reviews, and about one third of consumers explore financing for the purchase. But, guess where the purchase is ultimately made? Eighty-two percent of respondents said they ultimately purchase the big-ticket item in-store. Surprised? Let’s explore this further, and add some more numbers to the picture.

For 85 percent of consumers, the path-to-purchase for big-ticket items starts with online research. The vast majority of people used the internet to explore prices and purchase options, up from 80 percent only a year ago. Let’s dig a little deeper:

  • Ninety percent of consumers said they compare prices and promotions to ensure they get the best prices.
  • Eighty-two percent said they wait to make purchases until they get the best deal.

So, comparison shopping is a major part of the big-ticket purchase process.

Let’s go to the next step: in-store research. Even though in-store research takes more time and planning than online research, our study shows that about 70 percent of consumers research the items in physical stores. That’s a pretty healthy percentage.

And how much impact do friends and online reviews have on the purchase? Well, more than half said they consult with friends, and 38 percent check online reviews.

Now, after all this research on the actual purchase, how about financing it? About one third of consumers said they research financing options. It’s a good idea for brands to introduce financing as part of the purchase process, as 47 percent said they might not have made a purchase, or would have shopped with a competitor, if financing was not available. Additionally, 71 percent of cardholders said they prefer retailers that offer promotional options.

And to reiterate, about four in five people purchase the item in a store. For costlier purchases, people like to touch it, feel it, ask questions and feel confident that they know what they’re getting. After all, it’s more complicated to return a washing machine purchased online than it is a pair of shoes.

So, what is the implication for brands selling big-ticket items? Consumers value more than just price when shopping for a high-cost item. The value equation includes price comparison, consumer reviews and cost of shipping/delivery/installation, as well as financing options. Retailers who ensure that their website and communications strategy include these elements come out as winners. And as the digital channel continues to play a prominent role in the shopping journey, brands should consider strategies that increase their online presence, such as search engine marketing and website optimization.

Customers are looking for a seamless shopping experience. It’s important that brands demonstrate value early in the sales process, serve up detailed information through online channels and provide great customer service for that ultimate in-store purchase.

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.

WAM! 3 Consumer Segments That Drive Growth

With consumer spend hitting sporadic highs and lows, marketers are looking for segments of the population that show promise. And, who can blame them? There is news of consumer confidence that paints a choppy picture of consumer sentiment. But the U.S. is full of segments and sub-segments that can be drivers of success for any given brand. The entire population is made up of consumers, after all.

With consumer spend hitting sporadic highs and lows, marketers are looking for segments of the population that show promise. And, who can blame them? There is news of consumer confidence that paints a choppy picture of consumer sentiment. But the U.S. is full of segments and sub-segments that can be drivers of success for any given brand. The entire population is made up of consumers, after all.

There are three segments that all brands should take a close look at. These segments may not immediately come to mind, and companies may respond that their segmentation strategy is different from others. Even though this is true, there are three segments that all consumer brands should consider specific strategies for: women, the affluent and millennials. Or WAM, for those who like catchy acronyms.

Let’s look at the numbers. The important ones are: 85 percent, 47 percent and 34 percent.

black-women-shoppingSegment No. 1: Women

Women are the purchasing officers of the household and the chief investment officer when it comes to the majority of purchases. Many brands already have this information, but how many of them truly delve into the experiences of women in order to adjust products and the buying experiences to them?

According to Pew Research’s “The American Family Today,“ 40 percent of women with children under 18 at home say they are the main income earner in the family. Along with this comes a busy lifestyle. If they have kids and a full-time job, how much time can they really spend on shopping? At a recent conference, I heard that consumers are now saying that convenience is as important as price in deciding where to shop.

As a result, brands who cater to this can expect a loyal following. What are the priorities of a busy mom? Reasonable prices, healthy items/safety, a quick shopping experience and some understanding. How many times have you had a sleeping child in the car and needed to buy milk, detergent or anything without getting out of the car? The ones who are nodding at their screens right now are busy moms. And, there are a lot of them out there. Brands who cater to the female customer and really know her needs and challenges can expect a loyal following.

AffluentSegment No. 2: The Affluent

According to a study by Pew Research, the affluent have seven times the income than the middle income segment, and their income has grown by 47 percent in the last 30 years. This reflects upward mobility, as middle class households attain greater incomes and rise to the affluent segment. As a result, affluents have a significant amount of purchase power.

What do they buy? They are not very likely to buy only luxury brands, and just as likely as non-affluents to shop at stores like Gap and Macy’s, per the February 2016 Synchrony Financial Affluent Study. In terms of future spend, they say they intend to spend more money on experiences, rather than things, and they intend to increase their spend on travel. As a result, brands who reflect these needs may tap into this growth trend.

Millennial vacationers

Segment No. 3: Millennials

There has been a great deal of focus on millennials — they have been analyzed, debated, probed, viewed and quoted a great deal. A very great deal. A Google search on “millennial” yields about 18 million hits. That’s a lot of analysis. Well, they are a huge generation, and they are going to be coming into a good deal of discretionary income.

As they grow older, their incomes will outpace their student loan burden, and that means they will have money to spend. But their shopping habits are very different than past generations. They are all digital all the time. They are completely comfortable with digital shopping and becoming more interested in mobile payments. Social media drives a great deal of their spend, particularly for the younger millennial. According to a June 2016 Synchrony Financial Digital Study, about 75 percent of millennials say they have purchased something as a result of social media. As a result, marketers must look at this growing population and put strategies in place to attract them with digital technology and social media content.

This country is a beautiful combination of many segments and sub-segments. It is impossible to identify any one segment that will lead to success for any retailer. However, keep in mind WAM — women, affluents and millennials — as segments to watch, for future successful strategies.

Note: The views expressed in this blog are those of the blogger and not necessarily Synchrony Financial.