When details of the global financial crisis overtook the headlines in mid-September, consumers and brands began assessing their position in the economy and strategizing for the downturn. Retailers have reacted by announcing plans to offer deep discounts for the holidays, from high-end to mass-merchandise. Some have rolled out deals in advance of Black Friday. With reports of more and better deals from retailers and a bleak economic outlook for consumers, it would be natural to assume that consumers are hungry to take advantage of opportunities to save money. But will consumers tighten their belts so much that even deep discounts won’t get them spending?
Websites focusing on coupons and rewards historically prove to be popular places for consumers to learn about and share information on current discounts, but consumers didn’t rush to coupon sites in the weeks immediately following initial news of the economic fallout. In fact, traffic to coupon and rewards sites trends downward through much of October. As Black Friday nears, consumers are taking an increased interest in coupons and deals, shown by the graph below. Traffic to coupon sites is trending upward sharply in the first two weeks of November. The graph shows that nearly 21 million unique consumers visited a coupon or deal site during the week ending November 9.
While we don’t know what this means for retailer’s bottom lines and Q4 earnings, we do know that a growing number of consumers are online educating themselves about discounts and deals as the holidays approach.
Tags: black friday, coupons, discounts, online retail, sales
At the risk of stealing my own thunder, here is the most interesting slide from a presentation that I’ll be giving this week at the Internet Retailer conference. This is based on a survey that we ran during May, where we looked at cross channel (online/offline) usage among 659 people (US only) that had purchased consumer electronics (either online or offline) within the past 60 days. We found that a surprisingly large percent had utilized multiple channels in the course of researching and purchasing. 64% of those that visited local stores (to either see/touch/evaluate the product or to talk to a salesperson) also used the Web to research the purchase. 50% of those that used the Web to research the purchase also visited the store. The data points below, though, really blew me away.
More than half of brick and mortar buyers that used the Web to research the purchase said that they wound up buying from the retailer whose site they spent the most time researching. Equally interesting, 80% said that they had purchased from a retailer whose site they had visited first. I’ve seen a lot of multi-channel impact stats out there over the years, but I don’t know that I’ve seen a data point that so clearly makes the case for the importance of a solid Web site and strong multi-channel integration.
Yeah, yeah, this just looks at consumer electronics, which may be an extreme example, but take a look at the data below, looking at guys that you wouldn’t think of as multi-channel bellwethers…This is Homescan Online data (really old Homescan Online data, 2005) that looks at spending levels among multi-channel shoppers. You can see that multi-channel shoppers spend a LOT more than the average shopper. People that both shop at CVS’ brick and mortar stores and that visit its site spend, on average, 57% more than the average CVS shopper. 61% for Walgreen and Costco, 37% more for Sam’s and 38% for Wal-Mart.
Many of you are asking yourselves whether this is a simple reflection of loyalty, or whether multi-channel behavior causes higher spending, and it is a fair question. However, either way you slice it, these guys are valuable. Whether strong multi-channel integration rewards your most loyal shoppers or compels higher levels of spending, it seems pretty clear that it’s a good thing for retailers.
Tags: internet retailer, multi-channel integration, online retail
