How Can Retailers Capture A Majority Of U.S. Shoppers' Attention And Spending This Holiday Season?

By Brian Elliott, Periscope By McKinsey

It’s that time again when consumer shopping shifts into overdrive. The holiday season is responsible for as much as 30 percent of a retailer’s sales for the year. With the stakes so high, it’s worth taking a moment to understand what customer expectations are.

A recent Periscope By McKinsey study of consumers in Canada, Germany, the U.K. and the U.S. examined shopping attitudes and behaviors for this coming holiday season. What we’ve found is that some important trends and shifts cannot afford to be missed…

Consumers Are Looking For Ideas

With almost half of consumers surveyed (46 percent) admitting they are researching gift ideas, browsing in-store was listed as the top research channel by 65 percent of U.S. shoppers, while using search engines or browsing retailer websites were the number two research channels. Interestingly, catalogues, flyers and newspaper advertisements retain a certain appeal with 40 percent of respondents.

The research also shows that consumers welcome receiving marketing messages and communications from retailers that help inform and guide their seasonal shopping efforts. Promotional emails were by far the most preferred choice for those surveyed, with TV and magazine channels taking the second spot.

Omnichannel Behavior Is More Common

The majority (63 percent) of U.S. consumers plan to head both online and in-store to make their holiday purchases. While researching and buying happen online in significant numbers, most shopping happens in stores.

But traditional in-store shopping is changing. While 27 percent of U.S. shoppers still prefer the more traditional route of getting assistance from staff, there is an increasing trend of consumers looking to engage with digitally-enhanced offline shopping experiences. In particular, 25 percent of consumers rated the ability of browsing products from a digital panel as the second most desired in-store benefits.

Get The Timing And Targeting Right

Findings reveal that shrewd retailers will need to think beyond Black Friday – getting both the timing and targeting of promotions and deals right to capture those hyper-organized consumers eager to get their gift shopping tasks wrapped up early. Asked when they start thinking about shopping for the festive holidays, 50 percent of U.S. female shoppers said they get a jumpstart on gift buying in the October-November time frame -- representing a prime marketing target from pre-October to early November. Findings also revealed that the mid-end of October to December time frame is the ideal window to capture the attention of U.S. male shoppers (according to 43 percent of respondents).

Asked about the monetary value of their holiday spend budgets, 18 percent of U.S. shoppers expect to spend $1,000 or more. A significant minority of shoppers (10 percent), however, say they haven’t allocated budget this year – should they encounter the right gift idea, they may be prompted to shop, regardless of price.

A clear correlation between age demographics and spending plans is also revealed, with U.S. shoppers aged 40-49 indicating the desire to allocate higher budgets ($500 or more) on their seasonal shopping this year (52 percent of the age group).

And The Holiday Retail Winners Are….

The findings demonstrate that those retailers that get personalization right, create omni-channel experiences and launch promotional campaigns earlier will win the consideration battle this holiday season. The ability to target relevant and personalized offers is increasingly becoming the deciding factor in a retailer’s success. And, shoppers have come to expect and actively engage in omni-channel experiences. Finally, timing is critical. Those providing options early in a shopper’s planning cycle and/or curated and easy-to-navigate options for gifting will emerge as the victors this holiday season.

For more information, download Periscope by McKinsey’s full report “2019 Holiday Season Shopping Report: Shoppers are ready to spend but retailers need to personalize.”

About The Author

Brian Elliott is Partner, Founder & Head of Innovation at Periscope By McKinsey.