$40 Billion Extra to Share with You
$40 Billion Extra to Share with You – Marketing to Ring In the Holiday Season
With the recent decline in gasoline prices, consumers are pocketing an estimated $40 billion in the fourth quarter of 2014. And, they’re itching to spend it this coming holiday season.
Money Burning a Hole in Our Pockets
According to the Morgan Stanley U.S. Economic Report (1) for the final quarter of 2014, year-over-year household incomes will jump by at least $40 billion, and possibly more, should gas prices remain low or fall further. That will bring an estimated 4% increase in holiday spending over 2013.
How much more you might ask? A recent Nielsen Company (2) research report suggests that a “majority of households plan to drop (spend) between $250 and $500” with more “households earning over $50,000 planning to spend between $500 and $1,000”.
The Most Wonderful Time of the Year
The National Retail Federation (3) notes that “90 percent of Americans celebrated Christmas, Kwanza or Hanukah, “making this the biggest holiday season of all”. In 2013, all households spent $730 on gifts, food, decorations and more on average.
Adding to the windfall of money to spend, consumer confidence in the U.S. is on an upward climb. Though the recession lingers, the improved health of the job market, housing, and lower inflation rates is giving consumers the confidence to spend and not save this new-found wealth.
Black Friday is Too Late for Some
Consumers are at the doors waiting for the sales to begin. Nielsen reports that 22% of consumers started their holiday shopping in October.
Online shopping leads the pack for shoppers seeking that special something this coming season. But, bricks-and-mortar locations are seeing demand increasing as well with mass merchandisers and club stores attracting more shoppers than seen in 2013.
Marketing and That $40 Billion
Marketing early to spend-willing consumers is a trend that was displayed last year and is expected to grow. In 2013, Wal-Mart, Starbucks, Target, and Toys-R-Us opened the holiday shopping season on November 1 with advertising highlight deals, discounts, and lay-away plans. Described as “Christmas Creep” by Time, some marketers began their holiday cheerleading even before the end of summer with K-Mart running promotions in September.
So, what to do about it? Accenture says that 65 percent of consumers will browse online and then go into a store to buy. ShopperTrak supports this with its research showing that 90 percent of us will make our holiday purchases in a bricks-and-mortar store. And, engaged consumers spread the good word with over 44 percent of shoppers discovering gift ideas from peers (Crowdtap).
While social and mobile marketing tools and tactics should be a part of the plan, success in marketing this season will be driven both online and off. According to industry trade publication Retailing Today, consumers may start online with research, but complete their purchase in physical stores, with 88 percent displaying this path to purchase. An integrated marketing strategy fits best with the consumer this holiday season where most shopping begins online, is supported by traditional media ads, and finishes with attractive and helpful store displays and pricing.
This year, with a potential $40 billion extra in play, all organizations involved in holiday season marketing have more at stake. An integrated marketing strategy can help capture more dollars while building customer satisfaction that spreads through referrals and favorable reviews.
Dr. Paul Carringer is an associate professor of marketing at Columbus State Community College, adjunct instructor of marketing at Franklin University, and the president of Caring Marketing Solutions, a full service PR, advertising, and production company established 22 years ago and located in Grandview, Ohio. You can contact Paul at firstname.lastname@example.org.