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Brands face big challenge this Christmas

Visiting a shop is still preferred over online buying by Australians when it comes to Christmas gift purchases, an online survey has shown.

CPM Australia and Retail Safari partnered with ACRS Shopper Tracker for the survey, covering a sample of 444 shoppers.

However, the data also reconfirms the notion of treating in-store and online shopping separately is no longer valid. Increasingly, more and more brands and retailers are blurring the lines between digital and in-store experiences.

While the blend between physical and digital becomes more popular, most Australians still want to complete their Christmas shopping in actual stores. In the approaching holiday season, 49% of the consumers surveyed plan to use both physical store and online, while 43% will use only physical stores. Only 8% plan to do their Christmas shopping entirely online.

These statistics are consistent with latest shopper behaviour. As consumers have adapted to the convenience of online shopping, they expect their in-store experiences to be consistent with their eCommerce habits. To meet these expectations, retailers are finding ways to marry the two concepts.

Best of both worlds

Many pure-play online retailers are experimenting with – and often times growing – their offline presence. They are embracing the physical store by merging the best of both worlds – using their technology and taking advantage of having physical contact with their customers.

By using both the physical store and online, the shopper is in greater control. Empowered consumers who have easy and rapid access to multiple sources online use information to their benefit, especially when it comes to making gift choices this Christmas.

Online consumers also gather social recommendations, consult user reviews before buying important items, and compare shopping options both online and in-store. As a result, today’s Christmas shopper will sometimes have more product and competitive information than a retailer’s in-house staff. If their needs, expectations and desires are not being met, these empowered consumers will shop elsewhere.

Well-informed shoppers also start thinking about what to buy two months ahead of Christmas. The figures indicate that most buyers (51%) plan to do the bulk of their Christmas shopping as early as November, with only 30% leaving the task until December.

Shoppers between 18 and 34 years of age are expected to do their Christmas shopping in early November, while the 35 to 54 age group anticipates shopping in December, and those between 55 and 74 expect to shop between late November and December.

Sensory experience

Given that shoppers have already done their homework and are starting early, it will be even more critical for retailers to have knowledgeable salespeople available in-store this coming November and December. The in-store experience is paramount. While online shopping offers convenience, physical stores offer a sensory experience.

Not only does physically holding a product create a sense of ownership, but it also drives must-have purchase decisions. In the survey, 60.5% of respondents said the ability to see and touch a product in-store enhances their shopping experience. This is also the main reason for shopping in a store this Christmas instead of online.

Consumers still like the chance to touch the merchandise. Touch creates symbolic connections between people and products, and more importantly between buyers and sellers.

Other reasons shoppers favour the physical experience include: no shipping costs (39.2%), inspiration and gift ideas (32.4%) and the ease of making returns (31.1%).

Inspiration, ideas

With service fundamental to fulfilling consumer shopping expectations, holiday shoppers will still seek inspiration and gift ideas in offline channels. Therefore, the retailer needs to offer more than just a place to buy goods. Merchandising and customer service must be visible and accessible in stores. Shoppers are increasingly attracted to cultural hubs where they can transact in an environment of experiences and relationships.

The combination of these factors and emotions is likely to lead to customers connecting with the brand, in return opening their wallets. Retailers who do more to define themselves and who offer a convergence of retail, theatre, food, tech and entertainment, are more likely to increase their foot traffic this Christmas.

In terms of spending outlook, most respondents (55.6%) intend to spend about the same amount on Christmas shopping this year as they did last year, while 18.1% expect to spend less.

The survey shows that department stores are the top destination for the 18 to 34 age group. In fact, most consumers (60%) intend to shop for Christmas presents at department stores, followed by discount department stores (49%), internet retailers (36%), toy stores (32%) and supermarket/grocery stores (31%).

Buyers are least likely to shop for Christmas presents at furniture or home-furnishing stores (10%) and even sporting goods stores (13%).

Gift cards or certificates will be the most common type of present consumers intend to buy this Christmas (45%), followed by clothing and shoes (39%), toys (33.1%) and food and liquor (32.7%). However, food and liquor is the most popular category for buyers between 18 and 30 years, as well as 55 and 74 years. Craft items and sports gear are at the bottom of the list.

Need to be ready

Brands and retailers know only too well they face enormous challenges to activate their brands in an overcrowded marketplace with an increasingly empowered customer. To maximise this key trading period, the data confirms that brands and retailers need to be ready to ensure the “last yard” of the consumer’s journey in-store lives up to expectations this Christmas. Knowing how, where and when to engage consumers along their purchase journey has never been more critical.

This research tells us that Australian consumers will not be shopping in a single retail format this Christmas. During this critical trading period, therefore, brands must be available across multiple formats as well as getting even closer to the customer to meet their needs by offering a personalised shopping experience.

To stand out from the crowd, they also need to seamlessly integrate their digital and physical retailing assets to engage shoppers and to foster a valuable shopping experience across the different channels.

Andrew Potter is MD, CPM Australia/Retail Safari

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