Apps, Deals Seen Playing Even Bigger Role in Shortened Holiday Season

LOS ANGELES -- Fewer shopping days this holiday selling season -- 26 compared with 32 last year -- will have “some impact” on consumers but much more on retailers looking to boost same-store sales growth, Steve Koenig, CEA director of industry analysis, told us after the 2013 holiday sales panel at the CEA Industry Forum. “Consumers aren’t that cognizant that there are fewer shopping days this year between Black Friday and Christmas but the channel is supremely aware of this,” Koenig said.

Koenig predicted a “tug-of-war” between retailers seeking comp sales growth from last year and consumers wanting to hold out for better deals. The market is rich with seasoned shoppers who know from the past that the longer they wait into the season, “the sweeter the deals get,” he said. For the first time this year, 30 percent of consumers say they plan to start their holiday tech shopping in December, he said. The retail channel has countered with very early promotional efforts going back to Kmart’s announced layaway plan 100 days before Christmas “to remind people to start thinking about holiday spending,” Koenig said. Target held a Cyber Monday in September promotion to get consumers in the mood, he noted. Retailers will continue to try to “pull sales forward” and encourage consumers not to wait to shop by offering “continuous promotions,” he said, ranging from multiple doorbusters to “staged deals.” H.h.gregg was one of the first to move to late-night deals, starting an era of promotions for overnight shopping, Koenig noted.

CEA’s term for this year’s retail promotional strategy is “omni-channel marketing” through mobile apps. The goal is to capture sales “as early and often as possible,” Koenig said. The question is whether conditioned consumers will choose to wait for better December deals, he said. Citing research showing consumers plan to spend on average $10 less on tech this holiday season because they have what they want and need, Koenig’s hope is that there’s an opportunity step those consumers up to better, and more expensive, products. They probably have four or five 32-inch $199 TVs that aren’t smart, for instance, he said. “What they really want is a Bluetooth wireless speaker,” he said hopefully. Getting consumers to go to stores to see products they're not familiar with -- a compact systems camera, a connected TV or a convertible PC -- will be “integral to building store traffic and getting the consumer to go earlier,” he said.

During CEA’s holiday forecast, Senior Director of Research Shawn DuBravac predicted more unannounced deals this year through retailers’ apps, where retailers will stage deals around the Black Friday weekend and throughout the holiday period. There’s an increasing effort for retailers “to add consumers to their speed dial to be in contact with consumers nonstop,” DuBravac said. He cited Best Buy’s new texting program where the retailer will send customers text messages offering deals. Some 55 percent of marketers surveyed planned to run campaigns in at least four channels, he said.

It remains to be seen whether consumers will take to round-the-clock deal shopping, DuBravac said. “I don’t know if this is a trend that will resonate with consumers or stay with consumers,” but CEA is seeing retailers taking advantage of their all-night e-commerce channel “being open,” he said. “You'll see a lot happening around retailers’ apps,” and that’s something manufacturers should pay attention to as well, he said. “They're going to your website or app to learn about the products they're seeing promoted in other channels,” he said of manufacturers. “They can flow as easy to your website as to any of the other websites out there that will have the product,” he said.

New categories such as fitness gadgets open the door to more nontraditional CE sales channels, DuBravac said. He cited Sports Authority, comparing it to manufacturers trying to grow the CE channel through drug stores, which are now carrying tablets and cameras. There’s still traction within the traditional CE retail channels, but consumers are starting to respond to the new channels and multi-channel approaches, Koenig said. “It’s not just about brick-and-mortar and online” anymore, Koenig said. “Now you have to have a multi-channel strategy where your bricks, clicks and apps are all in alignment to facilitate a congruent shopping experience for the consumer,” he said.

This year, half of consumers will be using a mobile device to help them shop for CE products, up from 35 percent last year, Koenig said. Apps feed into an increasing number of loyalty programs and exclusivity offers, he said. “You only know about the deal if you have the app.” DuBravac said the online purchases are about devices, not location. “These are purchases made on a tablet but they might be taking place on a Wi-Fi network in somebody’s living room,” he said. Sales via mobile devices will account for 15 percent -- $8.4 billion -- of total online sales this holiday season, CEA said.