For the 2015 holiday shopping season, the dollar figure forecast on consumer spend is less relevant for retailers. Rather, a deeper understanding of the complex retail landscape and the focus on building long-term shopper relationships is how retailers will define success this year.
The current retail environment is being driven by income bifurcation, demographic transitions, and evolving purchasing behaviors from technological advances. While the majority of consumers will likely spend the same or slightly more this holiday season compared to last year, the "survivalists" (shoppers with household incomes less than 50,000 dollars per year) continue to face a challenging economic environment and have indicated that they will be spending less.
Coupled with the fact that millennials – which represent 75 million people – are now a major force in the consumer markets and spending a larger share of their holiday dollars on experience-related purchases, and selectionists (shoppers with household incomes more than $50,000 per year) have a greater interest in distinctive brands and innovative products.
PwC forecasts that today's consumer preferences and economic realities will likely make the 2015 holiday season one of the most interesting we have seen in years. This dynamic environment creates a clear opportunity for retailers to succeed or fail. The winners will likely be successful by strategically engaging the millennial and "selectionists" shoppers with compelling brands, experiences, and innovative products or by serving the survivalists with an emphasis on value through strategic pricing, discounts and promotions.
"While our survey found that on average, consumers plan to spend $1,018 during the 2015 holiday shopping season, retailers are less concerned with these types of predictions this year and have prioritized engagement with the distinct shopper segments and building long-term relationships," said Steven Barr, PwC's U.S. retail & consumer leader.
"Millennials will likely be spending a large share of their holiday budget on experience-related purchases, while selectionists will likely be focused on innovation and purchasing the leading brands and survivalists will likely again be looking for the best deals. The leading retailers are employing aggressive strategies in both the physical and digital channels to establish meaningful relationships with these segments – which is why we believe the biggest winners of all this holiday season will likely be the consumer as it is, without a doubt, a buyer's market."
Source: PwC US
