Holiday shopping is in full swing. High traffic provides prime opportunities to capture consumer attention and garner brand loyalty; however, as purchase behaviours shift, new consumerism alters priorities and value conscious consumption dictates decisions. Euromonitor International analysts look at the Christmas trends across different industries and countries.
SHOPPING TRENDS ACROSS INDUSTRIES - Quest for innovation value
Daphne Kasriel-Alexander, Consumer Trends Consultant at Euromonitor International
“Over November’s discount days, shoppers voted with their wallets to confirm the sustained appeal of thrifty shopping combined with the thrill of chasing a quality bargain and novelty from whichever brand could offer this to them. The consumer quest for innovative value is also apparent in the enthusiasm for new fad, “Hatchimal” toys and the passion for subscription services. Agnostic consumers are the epitome of today’s contradictory shopper. Emboldened by a post-recessionary, hyper-informed, savvy shopping zeal, with multiple opportunities to compare prices at their disposal, they are less bothered about labels and recognised products. These consumers flit between shops and products in their search for value and novelty, presenting a challenge for brands who want to connect with them or inspire their loyalty.“
The sustained appeal of hunting for a purchase with perceived value was apparent in the consumer interest in discount November sale dates, particularly Singles Day on the 11th and Cyber Monday on the 28th of November, which disrupted and brought forward the Christmas shopping season. 73% of respondents to Euromonitor’s October 2016 Analyst Pulse Survey confirmed that in their country, it is common for consumers to shop for holiday gifts during these date-specific promotions. The survey shows that spending habits over the holiday season different in various regions.
How common is it for consumers to shop for holiday gifts during date-specific promotions such as Black Friday, Cyber Monday, and Single’s Day.
RETAILING - The importance of mobile, value and omni-channel
Michelle Grant, Head of Retailing at Euromonitor International
“In the US, the national holiday, Thanksgiving, kicks off a weekend of shopping in anticipation of the Christmas holiday in December. The shopping weekend in 2016 serves as a microcosm for the state of retail in the US: the importance of mobile, the consumer preference for value, and the questionable future of the brick and mortar store with its challenge of becoming omnichannel. The holiday weekend illustrated that retailers are still struggling to be omnichannel. Macy’s online and mobile websites crashed for most of Black Friday due to the heavy traffic. Victoria’s Secret and Williams Sonoma both had their websites slow down, taking 30 and 25 seconds to load according to industry sources. When digital commerce is the growth engine for retailers, it is imperative not to have IT issues on the biggest shopping days of the year. ”
For more information, please visit: https://blog.euromonitor.com/2016/12/thanksgiving-weekend-illustrates-state-us-retail.html
APPAREL - Gifting convenience
Given apparel and footwear is one of the most desired items for gifts, this season is expected to prove considerably fruitful for the industry. According to Euromonitor, Christmas purchases are set to intensify the shift to digital shopping as consumers seek convenience, access to product reviews and price comparisons in a bid to secure the best deals available.
Bernadette Kissane, Apparel and Footwear Analyst, Euromonitor International
“Empowering consumers to shop anywhere and at any time is proving extremely popular, particularly during high profile sales events such as Black Friday and Cyber Monday that produce a sense of urgency and require savvy shopping tactics to keep up with the latest offers and catch the best deal. Nevertheless, while growth may stem from online, stores continue to account for 87% of apparel and footwear sales globally. The path to purchase now takes place across multiple devices and channels from tablets to social media to stores. Those that create an enjoyable and truly memorable shopping experience, prioritising service and convenience, will find themselves better equipped to reap the benefits available to them at this vital time and will likely continue to flourish way into the New Year.”
For more information, please visit: https://blog.euromonitor.com/2016/11/apparel-retailing-at-christmas-create-holiday-cheer-by-gifting-convenience.html
LUXURY - Developed markets compete for share of tourist spend
The festive shopping season is considered by many the busiest and most prosperous time of year for luxury retailers, both online and on the high street.
Fflur Roberts, Head of Luxury Research, Euromonitor International
“Hoards of affluent shoppers from all corners of the world flock to some of the world’s most glamorous shopping streets looking for both the ultimate gift for their loved ones as well as the sheer excitement and experience of shopping at this time of year. The tide is turning, however. Indeed, thanks mainly to currency fluctuations, economic and political headwinds, and the added fear of terrorist attacks, the future of the wealthy tourist is looking increasingly challenging, with many key luxury shopping destinations, particularly in the developed markets of the US, France and Hong Kong, seeing a drop in international luxury spend. The implications of a decrease in tourist spend could be detrimental for key luxury shopping hotspots, especially in the run-up to the festive season, particularly in markets such as France, the US and the UK.”
For more information, please visit: https://blog.euromonitor.com/2016/12/developed-markets-compete-share-tourist-spend-festive-luxury-shopping.html
BEAUTY INGREDIENTS - Natural fragrances on the rise
Fragrances represent one of the most popular Christmas gifts. According to Euromonitor, natural fragrances are particularly successful.
Maria Coronado, Ingredients Associate Analyst at Euromonitor comments:
“Multicultural consumers seek natural ingredients and fragrances are not an exception. Natural fragrances are gaining popularity and its use in the beauty and personal care industry is increasing globally, especially in Asia Pacific and the Middle East”. According to Euromonitor International ingredients data, between 2015 and 2020, essential oils are expected to growth in beauty and personal care products at 5% CAGR in Asia-Pacific and 6% in the Middle East.
Consumer trend towards greener and healthier lifestyles is influencing the ingredients market. Aware of the increasing demand for natural ingredients in the fragrance arena, big players such as Firmenich, Givaudan and Symrise are finding inspiration in nature and expanding their natural ingredients portfolio. Demand for these ingredients is expected to continue driven by demand from multicultural consumers, the global trend towards greener lifestyles, as well as the trend toward simpler formulations with fewer chemicals (free-from claims and clean labelling) and towards multifunctional ingredients that can provide additional benefits besides aroma such as antioxidant, anti-inflammatory, antipollution, anti-stress, conditioning or emollient properties.
Coronado explains: “although the demand for natural fragrances is increasing, the volumes of essential oils used in beauty and personal care are still far lower than volumes of synthetic fragrances. Naturals are no doubt on the rise, however, a key factor that can limit the growth of essential oils in certain applications is price volatility due to the high manufacturing cost of natural fragrances compared to synthetic ingredients and the insecure supply of ingredients derived from plants which is affected by uncontrollable and unpredictable factors such as weather and climate. Production of these ingredients is also concentrated in some specific areas in Asia, Africa or Latin America with high biodiversity and this usually implies long-distance travel from these areas to the manufacturing point which has implications in prices and sustainability (transport emissions). In addition, properties such as product shelf life, aroma stability, and some of the organoleptic properties of natural ingredients such as colour, aroma intensity or transparency might also limit its potential use”.
HEALTH AND WELLNESS - Ethical Christmas, the tale of boxed chocolates
For grocery retailers, Christmas-themed, festive food and beverages are given priority shelf-space during this season and boxed chocolates remain a favourite gift item, prominently on display. In many Western European countries, sales of boxed chocolates peak at Christmas, and a growing number now carry ethical labels. In Germany, for example, retail sales of boxed chocolates bearing at least one ethical label reached US$1.4 billion, and US$1.3 billion in the UK, in 2015.
Hope Lee, Senior Analyst at Euromonitor comments:
“Christmas is not only about indulgence and a restful holiday period; the ethical story behind boxed chocolates tells of manufacturers’ massive responsibility to care for the planet, the farming community and the environmental impact and some of the different approaches towards these issues in different markets. International brand owners are not waiting until every single chocolate lover starts to fully appreciate the resources they spend on sustainable sourcing; they are making extensive efforts to run their initiatives, and these efforts in sustainable sourcing should be celebrated and applauded. But it will take time for them to standardise their ethical labelling efforts in both developed and developing markets.”
For more information, please visit: https://blog.euromonitor.com/2016/12/ethical-xmas-boxed-chocolates.html
EASTERN EUROPE - Looking for trendy alcoholic drinks, beauty and licensed toys
In Eastern Europe, Euromonitor International has identified new shopping trends ahead of the Christmas holidays. Alcoholic drinks is always a good idea, but the younger generation is looking for unique products such as whiskies and luxury wines, as well as craft beer, rather than traditional vodka.
Beauty items remain another popular gift. Euromonitor analysts expect that products positioned for use prior or after sports will be particularly successful due to the growing trend towards healthy lifestyle.
In this season, another popular presents in Eastern Europe will be licensed toys, with ubiquitous media driving the category, and creating the desire for products with the logo of a well-known film, cartoon or character. In their letters to Santa Claus, children often ask for such things as the Elsa doll from Frozen, Star Wars figures or plush/plastic figures from the Peppa Pig family.
For more information, please visit: https://blog.euromonitor.com/2016/12/santas-shopping-basket-for-eastern-europe-in-2016.html
SOUTHERN ASIA - Christmas is the season for giving – or not?
Joanna Chan, Research Analyst at Euromonitor International
“Christmas is not the most festive season of the year in many Southeast Asian countries. Various other religious and cultural holidays take precedence over Christmas such as the Lunar New Year, Hari Raya and the Songkran Festival where community gifting is common.
Christmas sales generally spur consumers in this region to splurge not on gift-giving, but on themselves instead. To them, Christmas is a time to pamper oneself as retailers slash prices and launch year-end sales. These retailers adopt different marketing strategies during the Christmas season when targeting consumers in Southeast Asia. For example, while Sephora’s website in the United States are marketing their products as the ideal gift for loved ones, Sephora in Southeast Asia encourages consumers to ‘make your beauty wishes come true’ with every purchase as they unveil a new gift everyday for the twelve days of Christmas.”
BRAZIL - The impact of the economic crisis in gift giving and holiday meals
Angelica Salado, Research Analyst at Euromonitor International
“As Brazilian families’ available income is negatively affected by the current economic situation and the increasing indebtedness and unemployment rates, gifts purchases in 2016 are expected to be impacted. Consumers, especially from middle class, might be more rational in terms of the expected average disbursement for gifts, but certainly do not intend to be more economic for the Christmas dinner.
During the last years, consumers found out that their own kitchen could be as sophisticated and modern as a restaurant’s – and, in a continuous gourmetisation movement of the familiar environment, the demand for higher added value food and beverages also increases, as to reproduce at home the same experience they would have in a restaurant or bar. In line with this trend, mainly for younger consumers, the movement of gifting close friends and relatives with beverages, especially wines, spirits and premium/artisanal beer, also grows. For many families this kind of practice, above all, is an alternative for solving two problems at once: guarantee the gift of a family member and, still, make the Christmas dinner more robust, once these beverages can be consumed during the fraternization itself."
Home & Tech - Elton Morimitsu, Research Analyst at Euromonitor
“It is not a secret that Brazilians will have a much tighter budget to spend in gifts during this Holiday season. Much of this scenario is explained by the economic crisis that hit the country and almost all segments will be affected by such trend.
As consumers are planning to spend less than R$ 100 per present, Consumer Electronics and Appliances will probably the most negatively impacted categories during Christmas, as this value inhibits purchases of many products under those two categories.
Thus, instead of investing the budget on gifts, many consumers decided to spend the money on the Christmas dinner itself. Brazilians value spending time together with their families and many prefer to invest money on items that will make the experience much more pleasant for the group as a whole.
Even those who decided to gift their loved ones engaged in alternatives that enabled them to give a good quality present. As a consequence, Secret Santa became a more popular activity during this Holiday season, as consumers will have to compromise with purchasing fewer gifts, instead of multiple presents for multiple people.”
Beauty & Fashion: Guilherme Machado, Research Analyst at Euromonitor International
“The end of 2016 for Brazilian retailers in Apparel and Beauty and Personal care has strong communication efforts for Christmas time focusing on two main purposes: purchases for gifting or self-indulgence consumption.
The purchases for gifting traditionally give traction in companies results and the final bets for a challenging year are directed to Christmas. Offers targeting consumers with lower purchase power (such as Marisa in Apparel) are more explicit, with in-store and web communication efforts showing options of price tiers for single products and special payment conditions with progressive discounts, more installments or free delivery taxes.
Players selling premium products are currently more inclined towards announcing promotions more discreetly and focusing on kits for gifting (as Renner does with fragrances and cosmetics), promotional items rewarding purchases at a minimum value or self-indulgence acquisitions such as Holiday season looks (as seen in Calvin Klein’s campaign “I celebrate with #mycalvins”).
High-end retailers such as Sephora are defying these common sense characteristics of Premium/Popular brands by bringing a section of Gifts on their website with more explicit approach to discounts and lower price tier options with special payment conditions among premium products: gifts costing up to BRL99 in four installments for sophisticated fragrances, skin care and colour cosmetics.”