Retailers up the ante to win the holiday shopping season

The upcoming winter holiday season could help some retailers turn a page on weak sales. Positive growth is expected to continue for the 2017 winter holiday season and many consumers plan to increase their spending, according to Mintel’s report on winter holiday shopping in the US. To prepare for the season of gift-giving, many consumers are budgeting their holiday purchases and researching before buying, looking for the best gifts at the best prices.

As the holidays get closer, retailers are announcing their plans to try and win consumers’ attention during this busy shopping season. Walmart and Target are revamping ways to save, enticing customers into stores before the peak shopping season starts with the hopes they’ll return throughout the holidays. In September 2017, Jet.com, owned by Walmart, announced its “JetCash” offer, which provided customers with 5% cash back on orders made between mid-September through the end of October. JetCash credits can be redeemed up to $50, encouraging shoppers to return for their holiday shopping needs.

Target is taking a different approach. In addition to price cuts announced in September 2017, the retailer is moving away from frenzied holiday promotions in favor of offering a refreshed assortment of new products, aimed at making gifting easier. A number of new, exclusive brands have launched recently at Target, including the November 5 launch of the Magnolia Hearth & Hand collection, which is co-designed by Chip and Joanna Gaines and features holiday giftables, home décor.

Building on the launch of its new products, Target will feature curated gift collections, with most retailing under $15, and will be available both on in-store and online. Shoppers can also use the “gift now” feature on Target’s website, which allows shoppers to choose from thousands of gifts and easily checkout online. The recipient is notified by email where they then accept the gift and can adjust the size or color, or choose something different, prior to the item shipping. Target has also waived free shipping minimums for all online orders placed from November 1-December 23.
37% of holiday shoppers say getting the right gift outranks price.

What we think

Although Mintel research shows that the majority of consumers not only plan to maintain – or possibly increase – their spending for the upcoming holiday season, there’s a battle for retailers to capture shoppers’ attention. Since consumers are doing more shopping online, they’ve become used to researching before buying and that’s no exception during the holidays, where deal-seeking behavior dominates. While 37% of holiday shoppers say getting the right gift outranks price, thanks to the internet, it’s easier for consumers to get both.

Retailers can’t rely on loyal shoppers during the holidays, since many consumers are searching online for gifts and comparing prices across multiple retailers, with many preferring to shop wherever they get the best deals. However, retailers that succeed in providing both competitive prices and easy shopping experiences can not only stand out to those already shopping their stores, but can give new shoppers a reason to buy from their store. Jet.com and Target have created reasons for consumers to shop them, be it online or in-store. Earning rewards on purchases early on, when most consumers likely haven’t done the bulk of their holiday shopping, allows them to save during the peak of the holiday season when deals are more likely influencing their purchase decisions.

Retailers must offer what consumers are increasingly expecting of their shopping experience, especially during the holidays: competitive prices, free shipping and convenient options. Although holiday spending is likely to be a generally positive story, the fate of retailers’ holiday seasons will be determined by offering a competitive and differentiated experience both in-store and online.

Alexis is a Retail and Apparel Analyst at Mintel. Alexis has a background in corporate retail merchandising, with specific knowledge of the grocery and apparel categories. She brings product knowledge, analytical perspective and genuine passion for retail to her current role on the Reports team.