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The evolution of holiday spending in the US has been swift and dramatic. Digital channels continue to rapidly define what and how consumers are buying.
<p><em>By: Sam Connelly, Sr. Digital Consultant, Capgemini DCX North America</em></p>
Every year, two-thirds of the US economy is driven by consumer spending, and according to NerdWallet’s 2019 holiday shopping report they are expecting $184 billion to be spent by consumers this holiday season. The convenience dominated cyber season continues to bode well for eCommerce as 59 percent of that spending will be done online. We can always count on immense amounts of consumer spending, but this year we are projecting less spend per household. For the first time since 2011 household finances did not grow year over year, versus 2018 when the metric took a 6% jump its largest since 2011. Part of the predicted drop in spending is due to consumers expected weakening of the economy; 44% percent of households are expecting the economic outlook for the upcoming year to weaken and increase from 27% of households last year.
Even with the drop in consumer confidence in our economy, the public perception that gift prices will be increasing due to the trade war, Deloitte is still predicting that consumers plan to spend a considerable amount of $1,496 per household this year.
With that being said, retailers should still be expecting a very large holiday season. GenZ and Millennials have truly clung on to cyber Monday deals as a way to stretch their already thin disposable income. The topic of self-buying has become prevalent as not all holiday shoppers are shopping for others. This has become especially prevalent with the younger generation, who are commonly shaping their full-year spending calendar around Cyber Week. These deals have become so robust that shoppers are filling their apartments and buying summer vacations during cyber week. It has become less about holiday spending and more about general spending. This year should be another cyber spending week for the record books.
The most visible trends this year have all been coming to fruition over the previous few:
Smartphones continue to be the preferred tools for shoppers, gaining 6% over last years expected usage rate. According to NRF “73% plan to use their smartphone or tablet to research or make a purchase.” Consumers are taking advantage of the computer in their pocket; they know have an expectation of convenience and continuity. If users see something on their phone, they are going to scour online sentiment and then expect that product to be available in-store as well. Mobile use should continue to grab more and more revenue as retail experiences continue to optimize around mobile.
In terms of shipping, the consumer looked to have made a choice when amazon introduced free 2-day shipping. This chart below provided by NerdWallet details what consumers plan to take advantage of this holiday season, 92% of them were targeting free shipping. We recommend that our clients clearly present their thresholds to free shipping, as well as offer a notice date of when orders need to be placed so they can be delivered in time for the holiday.
Users are coming to the site in a browsing mode and utilizing search engines and large retailers’ internal search capabilities to narrow down their search. According to Deloitte “Half of shoppers are seeking inspiration or are undecided on products when they begin holiday shopping. Of those, 30 percent have a category– for example, clothing– in mind, while 20 percent reported having no specific items in mind. Nearly two-thirds of consumers plan to browse online retailers to get inspired.” Shoppers will be looking for on-site content to push them in the right direction, content that is tied to their brand’s overall retail experience. We have seen sites helping push the browsing user in the right direction with gift guides, gift quizzes, and more dynamic/content-filled product listing pages. For our retail clients, this may mean, messaging for warmer and cozier materials like cashmere or a shearling-lined jacket. As consumers continue to become more comfortable with purchasing online, they begin to use a site like they would a mall, they want something to appeal to them before making a purchase.
As retail moves in a more experiential and brand-driven direction, shoppers this 2019 season do not want to sacrifice convenience. Retailers are setting up site-wide, nation-wide, and device-wide initiatives that speak to what their brand represents without getting in the way of what the customer really wants: the perfect product for your loved ones, co-workers and friends alike.
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