Friday, October 28, 2016
As peak retail season approaches, retail analysts are predicting healthy sales figures based on improved consumer confidence and early shopping trends. Synchrony Financial's Annual Holiday Shopping Study, published Oct. 27, 2016, found more than half of survey respondents have begun their holiday shopping. The study, conducted by Norwalk, Conn.-based RTi Research between Sept. 30 and Oct. 3, 2016, surveyed 1,600 U.S. shoppers and combined their responses with historical data, macroeconomic factors and trends.
The report found many consumers spend the entire year strategically planning for the holidays. Bart Schaller, Executive Vice President and Chief Marketing Officer at Synchrony Financial expressed hope that advance planning and overall confidence will translate into increased sales, adding, "caution overrides personal optimism, and shoppers tell us they're carefully planning, pacing and prioritizing their holiday purchases to stay on schedule and on budget."
The report predicted a 2 percent increase in consumer spending, with 34 percent of shoppers expecting to spend more during the holidays, compared with 32 percent during the same period in 2015. Sales and discounts will continue to be a determining factor for 85 percent of shoppers, according to the report.
In addition to the early shoppers, 42 percent of respondents expect to begin shopping before Black Friday, 28 percent will wait until after Thanksgiving and 67 percent will be completely finished by mid-December, the survey noted.
Payments analysts expect broader adoption of digital wallets and tools to influence consumer behavior during the holidays. Consumers increasingly rely on connected devices to research and purchase products.
Following are additional insights on consumer payment preferences mentioned in the report:
Gift cards were among the most popular items on most shopping lists, with 67 percent of shoppers planning to give gift cards and 32 percent expecting to buy more gift cards than in previous years.
Payments analysts expect many consumers to use their favorite loyalty programs as a form of currency throughout the holiday season, redeeming points and miles in exchange for gifts. A recent study by Points International Ltd. found that 92 percent of consumers belong to loyalty programs; the company anticipates more growth in loyalty programs as mobile wallets gain adoption. In The State of Mobile Wallet Loyalty and Engagement 2016, Points noted that 89.6 percent of consumers gravitate to retailers that support their favorite loyalty programs.
"Ease of use was the prevailing theme of the study," said Danielle Brown, Vice President of Marketing at Points International. "We need to find ways to seamlessly blend established loyalty programs and mobile wallets, to make consumer loyalty optimally interactive and minimally intrusive."
The study additionally noted the importance of providing a seamless experience that enables consumers to shop and redeem loyalty rewards in one location. "Instead of logging into a separate app or waiting to receive a monthly statement to view balances, exchange points and redeem rewards, consumers want these features at their fingertips and accessible in one place," the authors stated.
Both Synchrony Financial and Points International expect to see near-term growth in text and location-based offers as more consumers opt in to receive discounts and promotions. Customized alerts for frequently purchased items, based on location and behavioral data, can create a more personalized experience between consumers and their favorite brands, the companies stated.
"I could be walking by a sandwich shop and get an alert that offers 200 miles from my favorite airline with my lunch purchase," Brown said.
Mobile and online alerts can also remind consumers of billing due dates. For example, Synchrony Bank cardholders can create customized alerts based on payment due date, balances and spending thresholds.
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