Holiday Shoppers Say Free Shipping and Returns Are Top Motivators – WWD

Holiday Shoppers Say Free Shipping and Returns Are Top Motivators – WWD


January Digital’s latest consumer report created in partnership with Coresight Research reveals key consumer preferences for the 2021 holiday season including the most popular product categories, insights on product discovery and the degree to which social media is an influence across age groups.

The report, titled “Where, What and How Will U.S. Consumers Shop for Holiday 2021?” aims to understand how consumers feel and how they are spending as retailers and brands navigate this highly competitive holiday shopping season.

Notably, the report is consistent with other reports finding the current supply chain crisis is creating the need for brands and retailers to drive to sell early — meaning now — and sell their available inventory at full price to remain competitive and fulfill shoppers’ lists, as both parties are keeping limited inventory top of mind.

“This is fundamentally shifting what promotions and discounts look like during the holiday sale season,” said Sarah Engel, chief marketing officer and chief people officer at January Digital. “Now Black Friday and Cyber Monday can actually go back to being specific sales days as opposed to the four weeks of promotion that have occurred the past few years that typically start on November 1.”

Further, she said, from a digital perspective, “it also means that brands and retailers need to focus on keeping shoppers in their ecosystem once supply is gone. Consumers are not going to show up empty-handed during the holidays, so if a brand or retailer is out of a product because it is stuck in port, they need to make sure that they shift the customer to an alternate product or a gift card on their site or in their stores before they leave to shop elsewhere. It’s about setting transparent expectations with consumers this holiday season to retain consumer loyalty.”

January Digital

Sarah Engel, chief marketing officer and chief people officer at January Digital
Courtesy Image.

Among key takeaways in the report is a notable shift to free shipping and free returns overtaking discounts and promotions as a key driver for holiday shoppers with 57 percent of U.S. respondents reporting they consider fast, free delivery for online orders to be one of the most important considerations. Following free returns in second place, pricing ranked third with 45 percent of respondents citing its importance. Meanwhile, discounts and promotions placed fifth among other top considerations.

“The most surprising takeaway from the research is that it will no longer be a race to the bottom in terms of discounts and promotions, as shoppers are prioritizing convenience in the last mile (free shipping and free returns) instead of discounts and promotions,” Engel said. “As such, retailers and brands need to review their overall promotion strategy. They must prioritize getting the right product in the hands of the consumer versus engaging in a discounting race with competitors.”

At the same time, the companies’ survey revealed consumers over age 60 will be driving the e-commerce increase from 52 percent to 59 percent year-over-year, while shoppers between the ages of 30 and 44 will plan to spend more in-store. Additionally, 56 percent of U.S. shoppers said they will discover new products by browsing online — making it the most popular destination for product discovery.

“The report shows that channel and shopping preferences will vary across age demographics, and retailers and brands will need to keep these preferences top of mind to understand how to fully capture customers’ share of wallet,” Engel said. “For example, while e-commerce will continue to be popular across all age demographics this year, 71 percent of shoppers aged over 60 plan to fully shop online, versus shoppers between the ages of 30 and 44 plan to largely shop in-store. Reaching, converting and bringing back shoppers means that brands must have a much closer relationship with their customers, coupled with diversified marketing channels and messages to prioritize what really matters to each customer segment.”

Notably, health products came in as the top category for product spend with 56 percent of survey respondents reporting they will spend more on health products this holiday — a 43 percent net gain year-over-year for this category. At 52 percent, more men expressed intent to buy more health products compared to women at 35 percent although there was consistency across almost all age groups. Health category products included vitamins, supplements and therapeutic devices.

“The three top product categories — health, groceries and fashion — this year are surprising, showcasing an emphasis on how COVID-19 continues to impact consumer shopping trends,” Engel said. “For example, while social distancing restrictions have eased in some regions, the focus on health products demonstrates a continued consumer focus on remaining healthy throughout the season. Additionally, the grocery and fashion categories demonstrate how consumers are slowly emerging from the pandemic and looking to have more social gatherings this year compared to 2020.”

Meanwhile, in terms of social commerce, Facebook is leading the way with 50 percent of respondents who said they would use social media channels for holiday shopping planning to use Facebook as their shopping channel of choice, followed by YouTube and Instagram. Influencers will also be a large part of social commerce with 10 percent of U.S. shoppers reporting they discover products through influencers. Notably, younger consumers say they find social media posts from influencers to be more “trustworthy” than those from brand representatives and store associates.

At the same time, most consumers revealed they prefer to shop through a retailer versus a manufacturer. Nearly 60 percent of consumers say they choose retailers for ease and convenience, while 45 percent say the preference is due to the ability to choose from other brands and 38 percent it was for a wider product selection. Only 19 percent of consumers said they prefer to buy directly from the manufacturer or brand “due to better information on products,” however 39 percent say they choose to buy directly from a brand for better customer service.

“Understanding shoppers’ expectations for this 2021 holiday season will shed light on shoppers’ behaviors heading into 2022,” Engel said. “Retailers and brands should take into consideration the trends uncovered in the research, noting the unique generational splits, to guide the allocation of their marketing spend. It is imperative for retailers to assess the trends against their current inventory to optimize their holiday sales season, and then personalize their promotional campaigns toward their most profitable consumer.”

FOR MORE WWD BUSINESS NEWS: 

NewStore Names 2022 Omnichannel Retail Leaders in Report

Klarna Acquires Inspirock, Giving Consumers New Ways to Plan Travel

Affirm Survey Reveals Pressure to Overspend on the Holiday Season





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Rachel Meadows

Rachel Meadows

Trending topics news writer who enjoys cooking, walking her dog and travel.

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