Accenture: Three trends retailers should watch out for this holday season
Holiday shoppers are focusing on value, price and promotions this season.
That’s according to Accenture’s 18th Annual Holiday Shopping survey in which almost seven-in-10 (68%) consumers rated price and value among the most important factors in deciding what retailer to buy from. Thirty percent of respondents said they will shop as — and when — they are offered promotions or discounts.
Based on a survey of 1,500 U.S. shoppers, the study found that consumers are cautiously optimistic and plan to spend more than last year. The average household spend for the season is $613, which is 4% higher than 2023, noted Accenture. At the same time, 60% of shoppers don’t know where to start when it comes to finding the perfect holiday gifts and 69% are worried they’ll make the wrong purchasing decision and regret it.
The survey revealed that retailers with physical stores could be set to gain this holiday season as 48% of consumers — rising to 53% of Gen X consumers (aged 44-59 years) — said they prefer to visit physical stores to see and assess products first hand. Successful retailers will apply creativity to store layout to maximize the sales for each square foot of their allocated selling space, advised Accenture.
The survey highlighted three trends that retailers and consumer brands should watch out for this season:
Cautious optimism, as deal-seeking intensifies
Despite consumers planning to spend more, retailers will need to cater for a group of “deal seekers” who love a bargain and are driven by promotions, incentives and savings.
“This year, retailers will also face one less shopping weekend, presidential election ripple effects, and consumer behaviors that can turn on a dime, putting their levels of agility and responsiveness to the test,” cautioned Accenture.
As to how retailers should respond, Accenture suggested that retailers look beyond stand-alone sales events such as Black Friday and Cyber Monday and put in place a dynamic sales and marketing plan anchored around existing inventory and that can be adapted as demand fluctuates.
“With 38% of shoppers planning to shop between early November and early December, retailers will need to pay close attention to data and analytics to carefully balance how and when to offer promotions and discounts, while preserving their profit margins,” Accenture said.
Gift cards: The untapped revenue accelerator for retail
Last year, two-in-three consumers (65%) consumers received gift cards. This year, 40% of consumers plan to buy gift cards. But despite being a popular choice among holiday shoppers, half of the recipients surveyed said they failed to redeem the full balance of the card, resulting in an unspent balance of $120, on average, per consumer.
“While the purchase of a gift card immediately translates into revenue for the retailer, unredeemed cards represent a significant missed opportunity for retailers, which could gain new, lifelong customers and incremental sales,” Accenture said.
For retailers to make the most of the gift card opportunity, Accenture recommended they make the cards easy to purchase, use and manage. Recipients of gift cards told Accenture that simplifying balance check options (36%), regular reminders of unspent balances (35%) and an easier redemption process online and in-store (32%) would help ensure they use their gift cards.
Retailers can increase customer satisfaction and generate loyalty through enhancing the gift card experience, making it less transactional and more personal. For example, suggesting beauty products for cold weather conditions that match the balance of the gift card, while providing personalized advice on how to incorporate into a daily regimen.
“As a category, gift cards have tremendous potential to be reinvented,” said Oliver Wright, global lead for Accenture’s Consumer Industries practice. “Building creativity and interactivity into the experience can help evolve gift cards from a last-minute, mind-blank gifting solution into a thoughtful and personal gift that customers are excited to give, and recipients are excited to use.”
Buyers’ block in the quest for the best
As the peak holiday shopping season begins, 68% of consumers could face “buyers block” — the effect of feeling overwhelmed by number of options to choose from. The result? The majority (82%) say they will abandon their shopping carts due to frustration or indecision, and nearly 33% will shop elsewhere.
Also, 81% of shoppers wish they could make decisions on what to buy more quickly, easily and confidently, and 73% say they would welcome inspiration, retailers can differentiate and drive revenue through inspiring and guiding consumers at each stage of their shopping journey.
In response, retailers should position their associates as “inspiration champions.”
“Innovative retailers are empowering store associates to display their expertise and help inspire and advise shoppers, welcome news to the 40% of consumers who appreciate personal customer support,” the survey noted.
Gen AI can act as a personal shopping advisor — a “guide by the side” of purchasing decisions – with human-like response abilities suggesting gift ideas or advice on wrapping. The vast majority (93%) of consumers agree Gen AI could help them find better gifts, while 89% value the recommendations that Gen AI tools provide.
“It is encouraging that consumers are planning to spend more this holiday season, but with this optimistic outlook comes a reminder that price and value remains front-of-mind for many,” said Jill Standish, global lead for Accenture’s Retail industry group. “Then there’s the challenge of where and how consumers experience a retailer. Everything from the adverts and digital marketing they receive, to the online and in-store experiences, to the customer service they encounter along the way. These are all factors that can make or break the season.”
