Holiday shopping surge: Unraveling the factors influencing in-store purchases during this festive season

Holiday shopping surge: Unraveling the factors influencing in-store purchases during this festive season

Itching to splurge post-pandemic, consumers are storming retail stores in droves, creating a prime opportunity for savvy retailers to boost profits and hook eager spenders seeking their next retail thrill. As the holiday season approaches, the retailers that adapt swiftly to evolving consumer behavior will lead the pack.

American Consumers Spending Big

After two grueling years of adjustments, shoppers aren't about to miss a beat, especially as their preferences shift and looming supply chain snags threaten holiday cheer. By August of this year, goods spending surpassed pre-pandemic levels with a staggering 25.69% surge since January 2019[1].

Drivers are feeling a spending itch, and data from Waze backs this up: In October 2021, trips to department stores jumped by 4% compared to September[2]. Wealthy consumers and younger shoppers are leading this trend, reports McKinsey, with annual spending growth of 11% and 15%, respectively, compared to pre-COVID levels[3].

As for the holiday season, it seems U.S. shoppers are only just warming up: In a survey of nearly 8,000 consumers, 34% revealed plans to increase their holiday spending by an average of 48% this year[4].

Homebody Economy Holds Strong

Though out-of-home activities have picked up, consumers continue to invest in upgrading their home environment. As more Americans work and learn from home, 33% have shelled out on home office setups, gym equipment, or home renovations[5].

While home improvements have already been made, consumers aren't done yet: In the next 12 months, more U.S. households are planning major life decisions like moving, having kids, or buying a home than before the pandemic[6]. Clearly, those plans come with extra spending.

Supporting Local Businesses Remains a Priority

Though online shopping is convenient, there's nothing like the tangible encounter of discovering a hidden gem in person or backing local businesses. This holiday season, consumers are increasingly looking up local stores, with searches for "near me" climbing more than 200% year over year[7].

Ultimately, 83% of holiday season sales are projected to occur in physical stores[8]. Moreover, 60% of consumers are planning to spend more at local, small shops this year[9].

Safety Worries Linger

Though retail spending is booming, we're not quite out of the woods from a safety perspective. This holiday season, 53% of consumers harbor concerns about in-store shopping, but mask usage and frequent sterilization help assuage apprehensions. Curbside pickup and click-and-collect options also provide a sense of security for 52% of consumers[10].

To alleviate safety concerns and gain visibility, retailers can advertise their curbside pickup options on platforms like Waze, making it easier for consumers to locate stores offering the service during their daily commutes.

Uncertain Loyalties in a New Landscape

Brand allegiances are tenuous, as consumers break free from old patterns and experiment with new brands. In the past two years, an astounding 39% of consumers have switched brands or retailers, and 79% of those intend to continue exploring other options[11].

This poses both a challenge and an opportunity: While retailers can no longer depend on long-term customers, current conditions offer a unique chance to attract new patrons—a rare second chance to make a winning first impression. To succeed, retailers should fine-tune advertising, messaging, and positioning to align with modern buying patterns.

Capturing On-the-Go Consumers

The moment of decision-making is critical, particularly for on-the-go consumers. An increasing number of shopping choices are made in cars, presenting an untapped yet valuable advertising opportunity. Waze data confirms that such targeted messaging during decisive moments influences consumer behavior and boosts retail traffic[12].

Liz Franz, Head of Industry, CPG & Retail at Waze, explains, "Waze advertising allows retailers to reach consumers at critical decision-making moments, when they're near stores like theirs." By leveraging digital platforms like Waze to drive targeted advertising and compelling offers, retailers can entice on-the-go consumers to take action and head to the checkout counter.

Sources:[1] "Americans are buying more stuff than ever before, and it's jamming up the supply chain." Business Insider, 18 October 2021, URL. Accessed 4 November 2021.

[2] Waze Internal Data, 2021.

[3] "US consumer sentiment and behaviors during the coronavirus crisis." McKinsey, 18 October 2021, URL. Accessed 4 November 2021.

[4] "PowerReviews Holiday Consumer Survey 2021." PowerReviews, 23 September 2021, URL. Accessed 4 November 2021.

[5] "US consumer sentiment and behaviors during the coronavirus crisis." McKinsey, 18 October 2021, URL. Accessed 4 November 2021.

[6] "Best Credit in Years Opens Americans to Big Life Decisions." Bloomberg, 18 October 2021, URL. Accessed 4 November 2021.

[7] "How to boost in-store visits this holiday season." Google, November 2021, URL. Accessed 10 November 2021.

[8] "How to boost in-store visits this holiday season." Google, November 2021, URL. Accessed 10 November 2021.

[9] "3 early holiday shopping trends for the 2021 holiday season." Google, October 2021, URL. Accessed 10 November 2021.

[10] "PowerReviews Holiday Consumer Survey 2021." PowerReviews, 23 September 2021, URL. Accessed 4 November 2021.

[11] "Next in loyalty: Eight levers to turn customers into fans." McKinsey, 12 October 2021, URL. Accessed 4 November 2021.

[12] Waze Internal Data, 2021.

1. As consumers continue to invest in upgrading their home environment and plan major life decisions, retailers must adapt swiftly to these evolving consumer behaviors to capitalize on the prime opportunity to boost profits, especially during the holiday season.
2. The retailers that successfully navigate the shift in consumer preferences, accounting for increased spending on home products, local businesses, and adaptations for safety concerns like curbside pickup and mask usage, will lead the favorable post-pandemic retail market.
3. Amidst the evolving retail landscape, artificial intelligence (AI) and technology can help retailers understand and target consumer behaviors more accurately, making shopping experiences more tailored, secure, and efficient for consumers across the general-news spectrum.
4. As consumers experiment with new brands and mantain uncertain brand allegiances, the holiday season presents a rare second chance for retailers to make a positive impression on the large number of consumers intentionally exploring alternative options for their spending.
5. Meanwhile, businesses in the entertainment and lifestyle sectors have a prime opportunity to collaborate with retailers, creating unique experiences that attract on-the-go consumers, leveraging targeted advertising on digital platforms like Waze to drive retail traffic and boost profits in the post-pandemic mall rat era.

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