Free Shipping, Free Returns Beat Discounts and Promotions as Motivation for Holiday Spending, According to Consumer Insights From January Digital and Coresight Research
January Digital (JD), a strategic consulting and media firm, today published the results from the Coresight Research x January Digital 2021 U.S. Holiday Insights Survey1 in the report titled "Where, What and How Will U.S. Consumers Shop for Holiday 2021?: Coresight Research x January Digital Analysis."
Created in partnership with Coresight Research, a research and advisory firm specializing in retail and technology, the report reveals key consumer preferences for the 2021 holiday season, including the most popular product categories for planned spending, how consumers will discover products, and the degree to which social media is an influence on specific age groups.
"In mid-October, we already find ourselves in an ultra-competitive holiday shopping season, with consumers recognizing the pressures of a broken supply chain and having higher-than-ever expectations of convenience," said Sarah Engel, Chief Marketing Officer and Chief People Officer, January Digital. "With this in mind, it is vital to understand how consumers feel and how they are spending. They are prioritizing health products, and they expect fast, free shipping and easy, free returns. Consumers are also shopping via social media more than ever, and they won't show up empty-handed for the holidays if the product they want is stuck in port."
"These findings align with our broader viewpoint on the upcoming holiday season," said Deborah Weinswig, CEO and founder, Coresight Research. "We are expecting strong growth, with shoppers using both online and in-store channels. While we are expecting outperformance in apparel, particularly occasion wear, as well as toys and beauty, retailers are not going to be handed success on a platter. They will need to take a granular look at the trends, generational differences and category spending plans, and execute their promotional strategies to that playbook, keeping a laser focus on inventory and shifting demand."
Key findings from the report include:
Consumers over age 60 are driving the eCommerce increase, from 52% to 59% YOY, while consumers aged 30-44 will spend more in store
On average, U.S. consumers expect that 59% of their holiday spending will be online ? up from 52% in 2020 ? according to the survey. As well, the survey found that 56% of U.S. shoppers will discover new products by browsing online, making it the most popular option for product discovery among U.S. consumers. At a close second and third for product discovery are word of mouth (52%) and those browsing physical stores (47%).
Consumers over the age of 60 will account for much of the rise in eCommerce this holiday, which is a significant shift compared to 2020, with 71% of consumers over 60 expecting to spend more on online orders for home delivery this holiday season than they did last year. In the same age group, 16% indicate they will spend more on BOPIS or curbside-pickup orders this holiday.
"The ways in which different generations of consumers plan to shop are more nuanced today than ever before, with our over-60 shoppers driving online spend and our under-44 shoppers unconcerned about discounts and promotions," said Engel. "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."
A surprising finding of the report is that one-third of shoppers aged 30-44 reported that they would spend more in store than they did in the 2020 holiday season ? a higher proportion than seen among other age groups that have greater preferences for online shopping and BOPIS/curbside fulfillment options.
56% of consumers say they will spend more on health products this holiday
The survey uncovered that the top purchase category this holiday season is health, with 56% of consumers planning to purchase more health products in 2021 compared to 2020 (a net gain of 43% YOY in this category). More men (52% net more) than women (35% net more) expressed their intent to buy more health products this holiday season, including vitamins, supplements and therapeutic devices, which is consistent for almost all age groups.
Groceries came in as the second top category consumers plan to spend more on this holiday season (22% net more YOY) followed by fashion (18% net more YOY) including items such as apparel, footwear and fashion accessories.
Free shipping and returns overtake discounts and promotions
When choosing a brand or retailer to shop with this holiday season, most U.S. consumers (57%) consider fast, free delivery for online orders to be one of the most important considerations. In addition to product pricing, which was the second top consideration, easy, free product returns for online orders are important to nearly half of respondents (45%), rounding out the top-three most important factors among all respondents. Discounts and promotions placed fifth among top considerations, demonstrating that shoppers are prioritizing convenience and value in the last mile as opposed to heavily discounted products this holiday sales season.
Facebook leads among consumers looking to purchase via social channels
When it comes to social shopping, 50% of respondents who stated they'd be using social media channels for holiday shopping plan to use Facebook as their social shopping channel of choice, followed by YouTube (18%) and Instagram (11%).
Additionally, the survey found that influencers will continue to be a major part of social commerce, with nearly one in 10 U.S. holiday shoppers answering that they discover products through influencers. Furthermore, younger consumers believe that social media posts from influencers or celebrities are more trustworthy than from brand representatives and store associates ? with 18% of holiday shoppers aged 18?29, and 17% of those aged 30?44, reporting as such (compared to less than 10% in the older age cohorts).
Most prefer to shop through a retailer versus a manufacturer
When choosing to make purchases through the brand or manufacturer versus a retailer, 30% of respondents prefer shopping through a retailer. Consumers choose retailers for the ease and convenience (59%), ability to choose from other brands (45%), and wider product selection (38%). Only 19% of respondents prefer to buy directly through the manufacturer or brand, due to better information on products (47%) and better customer service (39%).
Download a copy of the full report.
About January Digital:
We are January Digital, The Digital Leadership Companytm. We lead businesses to grow and adapt through strategic consulting and digital media excellence. January Digital was founded with the mission to improve the lives of our people, our clients and the world around us. We use data, technology, digital strategy and media execution to solve the industry's toughest business challenges. Our vertically integrated teams of experienced retailers, CPG leaders, technology builders and media innovators enable agile growth by combining our single source of data truth and strategic consulting mindset with flawless media execution. We work with leading global brands and digital disruptors such as The Honest Company, The Sak, David's Bridal, and Peapod Digital Labs. Recognized as best in class more than 20 times in 2020 alone, our work has been celebrated by Digiday, Drum, Glossy, and MediaPost, among others. January Digital is also proud to be named a Best Workplace by Inc. and Fortune and an Ad Age Best Place to Work for our commitment to employee whole health and community impact. January Digital's rapid growth has been acknowledged as an Inc. Magazine fastest growing company for five years straight.
About Coresight Research:
Coresight Research is a research and advisory firm specializing in retail and technology. Established in 2018 by leading global retail analyst Deborah Weinswig, the firm is headquartered in New York, with offices in London, Hong Kong, Shanghai, and Mangalore (India). The firm provides data-driven analysis and strategic advisory to clients including retailers, brands, enterprise technology companies, accelerators and more. In addition to being renowned for its breadth and depth of research, Coresight Research is known for its expertise in the China market, helping clients with market entry and cross-border e-commerce strategies. Coresight Research is also known for its Innovator Intelligence platform, consisting of a vast network of technology entrepreneurs that it actively cultivates through events, mentorship, and regularly updated report coverage. For more information, visit www.coresight.com.
1 The analysis presented in this report is based on findings from an online survey conducted by Coresight Research on August 2?9, 2021. Respondents totaled 1,000 U.S. consumers aged 18 or above that reported intentions to shop for the 2021 holiday season.
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