Consumers expect to spend the same or less on holiday gifts this year.
That’s according to Berkeley Research Group, whose 2016 Holiday Retail Outlook report also identified five major challenges facing retailers as they head into the holiday season.
In the report, 76% of consumers said expect to spend the same or less on holiday gifts in 2016, and just 15% say they’ll spend more. Among those expecting to spend less, the top reason (30%) was rising household expenses, followed by declining income (27%) and excess debt (25%).
The report also identified five major challenges for retailers as they look toward the 2016 holiday season: value shopping, channel shift, technology, mobility/delivery and the rise of millennial spending power.
To combat these challenges, the report advises retailers to do the following;
1. Reignite loyalty programs: Loyalty programs are most influential for consumers when shopping at mass merchandisers (55%) and least influential at office supply retailers (24%).
2. Cater to local preference: Nearly 70% of respondents said it is important to them that stores carry goods that cater to the local community. It is most important to millennials (76%) and least important to baby boomers (61%).
3. Accentuate visual merchandising displays: Fifty-six of respondents believe that window signage is very/extremely influential in getting them in to physical store locations.
4. Improve store planning and execution: The biggest reason (60%) that consumers leave a store without making a purchase is that they couldn’t find what they were looking for. The second biggest reason (51%) was high price.
5. Transform the shopping experience to resonate with today’s shoppers: To get consumers to visit physical stores in malls, retailers need more effective ways to lure them in, especially Baby Boomers with more income than Millennials.
“Retailers have been facing a new and more challenging environment in recent years,” said managing director a Keith Jelinek, leader of BRG’s Retail Performance Improvement practice. “The convergence of five major trends — value shopping, channel shift, technology, mobility/delivery, and the rise of Millennial spending power — has had a dramatic impact on the landscape.”