Christmas shoppers value quality over bargains

While discounts spurred purchases early in the holiday shopping season, total spending growth slowed in the second half of the season, with consumers shifting toward more thoughtful, higher-quality gifts.

U.S. consumers have spent $187.3 billion online so far from Nov. 1 to Dec. 12, an increase of 6.1% from the same period last year, according to Adobe Analytics. Total holiday e-commerce spending is still expected to exceed $253 billion, 5.3% higher than last year, but growth will slow in the second half of December as deliveries tighten in time for Christmas.

Casey Armstrong, ShipBob’s chief marketing officer, told CNBC that e-commerce sales typically “decelerate sharply” from around Dec. 16 to Dec. 18, then “decline rapidly” in the following days until Christmas Eve, the slowest shopping day of the season. Armstrong said shopping picks up again on Dec. 27, which is typically the busiest day for ShipBob customers later in the season. The company is a third-party logistics company that provides deliveries for small to medium-sized and socially-minded brands.

For shoppers looking to order online later in the season, quality is more of a concern than discounts.

Captify analyzes more than 1 billion search events per day from 3 million websites and found that searches for apparel and athleisure brands such as Alo Yoga, Warby Parker, Aritzia, Bombas, and Quince increased significantly through December compared to earlier in the season. Searches for Alo Yoga increased 256% from December 7th to December 15th compared to November 28th to December 6th. Searches for Quince increased by 124% over the same period.

“These gains demonstrate the rise of thoughtful, quality-focused gifts as shoppers seek out products from well-regarded brands,” said Oscar Chow, head of U.S. insights at Captify.

RetailNext, which tracks in-store shopping, also sees evidence that consumers are focusing on quality this season, even if they are buying fewer items.

“Consumers are willing to pay more to make good decisions,” said Joe Shasteen, Global Manager of Advanced Analytics at RetailNext. The company expects this momentum to peak in the days leading up to Christmas.

There is also evidence of a shift towards gifted experiences and subscriptions as the season winds down. Mr Chow said he was offering shoppers a “gift in time”.

Examples include increased interest in late-season weeks for Roblox Robux, Cameo Kids, Kindle Unlimited, Strava subscriptions, Peloton All-Access, MasterClass subscriptions, Disney+, Hulu, and HBO Max subscription bundles.

Discounts are still available as holiday shopping winds down, but they’re much lower than they were during the height of Cyber ​​Week. The biggest promotions are on toys, peaking at 15% off list prices in December, followed by 10% off on furniture, bedding and TVs, according to Adobe Analytics.

Certainly, there are consumers who seek discounts throughout the season, which makes toys a strong category. Consumers still want items like Mattel’s Barbie Dreamhouse, Disney’s Stitch toys and Play-Doh sets, according to data from Adobe and Captify. Mr Armstrong said the Toniebox 2 audio player and Rachel Tonie’s figurine were the “top items driving the conversation”.

Stores are very important in the days leading up to Christmas for people who want to give physical gifts.

The last Saturday before Christmas has been dubbed “Super Saturday” by the retail industry and is often one of the busiest in-store shopping days of the year. However, this year’s Christmas falls on a Thursday, so RetailNext says sales volume on this year’s Super Saturday is likely to be lower than on December 22nd to December 24th.

“We expect the final day before Christmas to experience the highest conversion rates of the season, potentially rivaling or even surpassing Black Friday,” said RetailNext’s Shastain.

Evan Gold, Planalytics’ executive vice president of global partnerships and alliances, said stores should see an increase in foot traffic this weekend as temperatures warm and much of the country experiences dry weather.

Shoppers who don’t want to move from store to store or change delivery schedules are increasingly taking advantage of the “buy online, pick up in store” option during the final stages of the holiday shopping season. Adobe Analytics predicts that BOPIS will peak on Dec. 22 and Dec. 23, with 32% to 37% of e-commerce orders using the service, with typical usage spiking from the end of the year.

Kohl’s told CNBC that pickup orders more than doubled in the week leading up to Christmas, and that a quarter of shoppers who received an online order ended up buying another item during their stay.

At Bath and Body Works, about 30% of customers who receive online orders add something before checking out.

For retailers, processing online orders from stores also reduces costs. Target said picking up or driving up orders can save retailers 90% compared to brown box shipping from a fulfillment center. So far this season, three-quarters of digital orders have been received from stores.

Walmart told CNBC last year that weekly scheduled pickups increased 14% in the two weeks leading up to Christmas compared to the average volume over the previous 12 weeks. More than 80% of Walmart customers say they shop in-store in the three days before Christmas, according to Walmart’s Customer Insights and Strategy Holiday Pulse Tracker conducted this month.

Last December, Walmart Express Delivery, which delivers orders from store inventory for an additional fee, reached 2.5 times the monthly average. The retailer said that on Christmas Eve alone, 77% of its digital orders were fulfilled through its express option.

Dick’s Sporting Goods did not provide further details, but the company said it has seen “a significant increase in BOPIS” as Christmas approaches, as well as “purchase rates” as shoppers “ensure they get last-minute gifts in one store visit.”