Despite Closures, Nearly Three-Quarters of Consumers Plan To Do Most of their Holiday Shopping in Stores, According to AlixPartners Survey

But ‘clicks-and-bricks’ strategies, localized marketing and demographic targeting are in order for retailers, in the face of recent store closings and other trends

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NEW YORK (Sept. 27, 2017) – Rumors of the death of the brick-and-mortar retail store this holiday-shopping season seem to be exaggerated. In fact, nearly three-quarters of consumers polled say they plan to do the majority of their holiday shopping in physical stores. That’s according to a new survey of more than 1,000 US consumers by AlixPartners, the global business-advisory firm.  The survey follows on the heels of the release last week of AlixPartners’ forecast of a potential increase in US holiday sales of 3.5% to 4.4%.

The AlixPartners survey finds, despite massive store closures nationwide across retail this year, that 71% of consumers say they plan to do half or more of their holiday shopping in stores this season, the same percentage who said that in a similar AlixPartners poll a year ago.  Additionally, this year’s survey also finds that the vast majority (88%) plan on at least visiting stores this holiday season.

However, the survey results also make it clear that retailers face a host of complex and demanding trends this holiday season, including some related to recent store closures around the country.

Competitors Could Benefit from Store Closures

For instance, nearly a quarter (24%) of respondents in the survey say they’ve been personally affected by store closures—specifically, that a store they “visit frequently” has closed in the past 12 months. Moreover, of that number, 20% are those earning $100,000 a year or more, the kind of high-earners most retailers yearn for. On the plus side, only 6% of all respondents say that if a store they frequently visit closed or closes, they’ll no longer make their purchase.  However, over a third (36%) say they would instead shop at a competitor—suggesting that while sales may not just evaporate, individual retailers may have a tough time hanging onto what they had before.

Meantime—and as well a reflection of increasing challenges retailers may face this holiday season—80% of those in the AlixPartners survey say they have conducted online research as part of their in-store shopping process, including from inside the store itself. That’s up from 62% in a similar AlixPartners survey in 2015. (The question wasn’t asked in last year’s survey.)

The Good News: More to Spend More this Season

On the good-news front, the AlixPartners survey finds that a whopping 84% of consumers say they expect to spend the same or more this holiday season, up 1 percentage point vs. AlixPartners’ poll last year. In addition, an also-whopping 93% say they expect to start their holiday shopping at the same time as last year or earlier, and of those who expect to start shopping earlier, 42% expect to spend “somewhat” or “significantly” more than they did last year.

Among the other findings in the AlixPartners survey:

  • 92% of respondents say they plan to use online sources to research their purchases during the holiday-shopping season
  • Consumer electronics is the most online-researched retail category in the survey, with 38% of respondents saying they’ve conducted online research
  • Apparel and footwear have the highest online sales penetration in the poll, with 37% of respondents saying they’ve made an online purchase

Roshan Varma, a vice president in the retail practice at AlixPartners and an author of the survey, said: “Customer demographics, lifestyles and attitudes are changing, and successful retailers are adjusting accordingly. The retailers that will likely win this holiday will provide customers with truly integrated omnichannel strategies, and will ramp up efforts to drive customers into stores by offering exclusive merchandise, engaging experiences, and knowledgeable and helpful sales associates.”

Joel Bines, co-head of the AlixPartners’ retail practice and a managing director at the firm, said:

“Our survey suggests that companies won’t be facing anything like the so-called retail apocalypse this holiday season, but they certainly will be facing a difficult conundrum—how to deal with an unprecedented mix of increasingly complex channel, customer and competitive dynamics. The winners in this environment will likely be those who truly master ‘clicks-and-bricks’ strategies, without short-shrifting the ‘bricks’ part.  Also important is localizing assortments, marketing and promotions to match today’s fast-changing markets, including at the regional level and below.  And last but not least, making the necessary efforts and investment to understand today’s customer.”

About the survey

The AlixPartners US Retail Holiday-Outlook Survey was administered online August 18-23, 2017, and polled 1,061 adult consumers, across all major regions, demographics and income levels in the United States.

About AlixPartners

In today’s fast paced global market timing is everything. You want to protect, grow or transform your business. To meet these challenges we offer clients small teams of highly qualified experts with profound sector and operational insight. Our clients include corporate boards and management, law firms, investment banks, investors and others who appreciate the candor, dedication and transformative expertise of our teams. We’ll ensure insight drives action at that exact moment that is critical for success. When it really matters.

www.alixpartners.com.

Contact:

Tim Yost

+1.248.227.1694

[email protected]

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AlixPartners US Retail Holiday-Outlook Survey

Survey Overview

  • Date administered: August 18-23, 2017
  • Population: 1,061 adult US consumers, across all regions, demographics, and income levels
  • Method: Online
  • Purpose: To gain insight into consumer economic sentiment, shopping habits, and trends for the upcoming holiday season.

Executive Summary

Holiday Shopping Trends

  • Despite recent store closings, 71% plan on doing the majority of holiday shopping in-store (same as in AlixPartners survey last year)
  • The vast majority (88%) plan on at least visiting stores this holiday season
  • 84% say they expect to spend the same or more this holiday season.  (1 ppt. more than in last year’s survey)
  • 93% expect to start holiday shopping at the same time or earlier than last year.
    • Of those, 42% expect to spend somewhat or significantly more than last year.

Effect of Store Closings

  • Nearly a quarter (24%) have been personally affected by a closed store; 20% with income of $100,000 or more
  • 6% indicate that if a store they visited frequently closed, they would no longer make a purchase; 36% say they would shop at a competitor, 30% say they would buy the same brand online, and 28% say they would shop at a different location

Digital Influence

  • 92% plan to use online sources to research their purchases during the holiday-shopping season
  • Only 7% don’t plan to make online purchases
  • 80% conduct online research during the in-store shopping process
  • Consumer Electronics is the most online-researched category, with 38% of respondents saying they’ve conducted online research.
  • Apparel and Footwear have the highest online sales penetration, with 37% of respondents saying they’ve made an online purchase.

71% plan on doing the majority of holiday shopping in-store, and 7% don’t plan to make online purchases (up 1 ppt.)

Retail Sales

88% plan on visiting physical stores this holiday for at least one of the following reasons, with 73% likely to browse new merchandise

Retail Sales

24% have been affected by a closed store, including 20% who have incomes of $100,000 or more

Retail Sales

6% say that if a store they visited frequently closed, they would no longer make a purchase; but 36% would shop at a competitor

Retail Sales

84% expect to spend the same or more this season, up 1 ppt. from our survey last year

Retail Sales

93% say they expect to start holiday shopping at the same time or earlier than last year…

Retail Sales

…of those, 42% expect to spend somewhat or significantly more than last year

Retail Sales

Only 8% don’t plan to research their purchases online, same as in our survey last year

80% have conducted online research during the physical-store shopping process

Consumer Electronics is the most online-researched category;  Apparel and Footwear are highest online for actual purchase

Conclusions

  • Given that a quarter of respondents across the income spectrum have been impacted by a closed store, that suggests shopping at high-end locations, as well as second- and third-tier malls, will be dynamic this holiday
  • Given that only 6% of respondents indicated that they would not shop at all if a favorite store closes, that leaves a large share still up for grabs, especially with new store-openings of late generating demand.
  • There is no one-size-fits-all solution to maximizing retained sales. Retailers knowing their customer and how to reach them is more important than ever.
  • Even with a solid growth rate this holiday season, we expect the battle for customers to be fierce. Retailers will need to adjust their tactics and build the right arsenal to fight the competition:
  • With changing customer demographics and competitive dynamics, we recommend planning this year’s holiday strategy on a localized basis. Targeting assortments, promotions, and marketing in individual market areas may be the key to victory.
  • Given that more than 90% of customers expect to start holiday shopping at the same time or earlier than last year, retailers should capture these sales by kicking off marketing campaigns and getting customers into stores early.
  • A depleted store fleet means even more customers will be beginning their shopping journey online. Providing customers flexibility with online visibility of in-store inventory, in-store pickup, easy returns by mail or store, and omnichannel delivery is critical to converting site visits to sales.
  • Because 71% of customers surveyed plan to do the majority of their holiday shopping in stores, retailers with a healthy store footprint can ramp up efforts to engage customers by offering new merchandise, exclusive experiences, and knowledgeable and helpful sales associates.