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Value and price compete with free shipping for the hearts of holiday shoppers
And more consumers will head to Amazon for gifts this year, a survey says.
Topics: Amazon, customer service, e-commerce, E-tailing Group, fulfillment and delivery, holiday shopping, industry statistics, Ken Burke, Lauren Freedman, m-commerce, MarketLive, mobile commerce, Top 500
While free shipping continues to be “the carrot driving shoppers to buy online,” says Lauren Freedman, president of consultancy The E-tailing Group Inc., this holiday season shoppers are looking for value over price. Her firm, together with e-commerce platform provider MarketLive Inc., conducted a survey in September of 1,136 U.S. consumers about their expected holiday shopping. 85% of respondents say they are more likely to take advantage of free shipping with no conditions over other promotions this holiday season. But when selecting a retailer from which to buy, 87% of respondents say they are looking for value, more than the 85% who say price. Consumers could select more than one survey response.
“Value has a new meaning where shoppers are not just looking for the best price but value which may include intangibles such as delivery time, confidence, rewards and more,” Freedman says.
This year 33% of consumers will shop online during the holidays, up from 25% last year, and 16% will shop on a mobile device, up from 3% last year, the survey says. 21% of respondents also say they will buy gifts from mobile devices this year, up from 11% last year. Of those, 82% say they will use retail apps to make purchases.
At least one in five consumers in the survey will also use smartphones in stores as a shopping tool to look up product details or store information, to compare prices and promotions at other stores, to check in and gain rewards points or to make a purchase online while in-store.
57% of respondents say they plan to make at least one quarter of their holiday purchases through Amazon.com Inc., No. 1 in the Internet Retailer Top 500 Guide, up from 35% last year.
“That’s pretty dramatic and significant. So the question really becomes what do you need to do to compete?” says Ken Burke, founder and chairman of MarketLive. “Content is the first thing. Amazon has some good content but not anywhere near the depth or level a branded merchant can provide.”
He says retailers can create compelling content via the ways they organize and package products on their site. For example, retailers could make special collections or bundle products into a set, attach relevant information or images to it and layer on a special deal, such as free shipping if a shopper buys the whole bundle, he says.
The study also found that slightly fewer consumers will shop on the weekend after Thanksgiving and the day after Christmas. The holidays and the percentages of consumers who said they shopped on them in 2011 and plan to shop on them in 2012 are:
- Day before Thanksgiving, 26%, 31%;
- Thanksgiving, 22%, 29%;
- Black Friday, 52%, 53%;
- Cyber Monday, 50%, 55%;
- Weekend after Thanksgiving, 51%, 47%;
- Free Shipping Day, no data for 2011, 50%
- Day after Christmas, 24%, 23%.
Burke says it’s important to consider the dates holidays fall on when deciding when to begin offering discounted prices to stimulate sales. After four years of conducting the survey and watching how the subsequent holiday shopping season plays out, Burke predicts that e-retailers will begin pushing deeper discounts this year a little later than usual, between Dec. 8 and 15.
How such discounting affects sales remains to be seen, he adds. “It depends how merchants play this,” he says. “If they don’t create value early in the season, consumers won’t go to them to buy.” The presidential election, he notes, may also create more uncertainty in this holiday season that could trigger extra discounting by merchants before Thanksgiving.
But while the temptation to offer free shipping and other deals right away may be strong, Burke says it’s critical for retailers to try and hold out long enough to protect their profit margins.