Digital Channels Dominate, Brand Power Takes Back Seat as Consumers Seek Holiday Deals: Report
The holiday season is quickly approaching and consumers continue to prioritize value and convenience over brand loyalty.
Eighty-six percent of American shoppers are cutting back on their holiday spending this year, with almost half (47%) cutting budgets by more than 50% compared to last year, according to a report from Relex Solutions.
Consumers in the 45-60 age group are especially price-sensitive this year. Sixty percent of that demographic is cutting budgets by more than 50%. Without “meaningful” discounts, 45% of consumers may not remain loyal to their preferred brands.
Brands will need to focus more heavily on digital channels: consumers' primary means of finding deals. For example, 60% are taking to store and brand apps (60%) as well as email promotions (60%) for value opportunities, while just 32% search out deals in physical stores.
The move over to digital could reflect concerns that in-store prices are not competitive with online prices, according to Gartner research. Additionally, their data showed consumers are drawn to online channels so they can take advantage of benefits such as same-day delivery, expedited shipping, curbside pickup, or buy-online, pickup-in-store (BOPIS).
Inventory Availability Also a Priority
Meanwhile, a younger subset of the population — those aged 18-29 — are prioritizing product availability over price. This aligns with nearly 85% of shoppers expressing concern about possible supply chain disruptions. They are most worried about electronics (60%) and clothing and accessories (57%).
Should they face both out-of-stock products and a lack of deals, a substantial 41% of consumers said they would switch brands.
As a result, retailers will need to lean on attractive promotions that don’t erode margins, and manufacturers will have to optimize operations and collaborate with retailers without sacrificing profitability, said Madhav Durbha, group vice president of CPG and manufacturing at Relex.
