New TransUnion report finds consumers planning to spend more, shop earlier and try new retailers
TransUnion newly released 2021 Consumer Holiday Shopping Report found that 72% of consumers are considering changes to their online holiday shopping behavior as a result of possible low inventories. The anticipation of supply chain issues has 33% shopping earlier this year, while 25% are considering alternate gifts and 14% may make fewer holiday purchases.
Read More: Amazon Expands Investment With Four New Operations Sites In Alabama
Retailers, though, should be encouraged that this year’s survey showed a 22% increase in the number of respondents who plan to spend more on holiday shopping—after two consecutive years of decline. This trend was led by Gen Z consumers, 36% of which plan to spend more. There was also a 15% increase from 2020 in the number of respondents who plan to use credit for their purchases.
TransUnion, a global information and insights company, conducted an online survey of 2,631 adults in late October for its annual Consumer Holiday Shopping Report. This is the fourth iteration of the report, which has observed consumer shopping preferences during the holiday season between 2018 and 2021, across four generations (Gen Z, Millennials, Gen X and Baby Boomers) and in aggregate.
“This year poses a real opportunity for retailers and creditors looking to win over new business,” said Mark Rose, senior director of marketing solutions in TransUnion’s diversified markets business. “Those who can successfully target new audiences and assure them of a strong inventory and on-time, secure delivery will find a receptive audience, as consumers are worried about scarcity and considering alternatives.”
Consumers Ready to Adapt
The vast majority (83%) of respondents said they plan on doing at least half of their holiday shopping online this year. However, among that group, 53% said their biggest concern is the possibility that a merchant may not fulfill their order on time.
Read More:SalesTechStar Interview With Tina Dobie, Chief Customer Officer, Calendly
This could be a reason why nearly half of respondents (47%) said they began their holiday shopping in October or earlier this year. This trend was driven more by older generations, with 51% of Baby Boomers saying they would start in October or earlier, while only 36% of Gen Z consumers did so.
With so much uncertainty about low inventories and on-time delivery, consumers are also looking for trustworthy alternatives to their preferred online retailers. According to the survey, 44% of respondents said they will consider new retailers they are familiar with and 23% are open to new retailers even if they’ve never heard of them before. This finding was consistent across generations.
“What seems to be new this year is that consumers are really feeling the pressure to secure their gift purchases,” said Rose. “This opens the door for marketers who can successfully target those shoppers and signal that they can fill in where some of their ‘go-to’ retailers are falling short.”
Seamless and Secure Now Table Stakes for Online Retailers
“What has not changed this year is that consumers have come to expect that online shopping is as safe as it is easy,” said Shannon Wu-Lebron, senior director of retail in TransUnion’s diversified markets business. “Retailers would do well to give consumers a good experience while not being afraid to demonstrate the measures taken to ensure security.”
When asked how their concern with being victimized by online fraud this holiday season compares to last year, 70% said they have the same level of concern, while 25% said they have more concern this year. Moreover, 50% have a positive view of additional identity validation requirements at check-out, while 45% are neutral, saying the requirements don’t affect shopping habits. However, 15% say not having enough security on a site is their top reason for abandoning their cart.
More than half of consumers (55%) said both account information and credit card information security are equally important. Yet, respondents said they are still looking for a seamless experience.
Furthermore, when using a mobile device to shop online, 70% said auto-fill of personal information and credit information is at least moderately important. Nearly two-thirds of respondents (64%) said device payment technology is at least moderately important, and 79% said use of device security capabilities (e.g. fingerprint readers or facial recognition) are at least moderately important.
A New Bar for Social Responsibility
When asked to rate how influential certain factors are in deciding where to shop, 50% of respondents said a store’s reputation for social responsibility was at least moderately influential, and 52% said a store’s reputation for environmental responsibility was at least moderately influential. This trend of consumers wanting to see retailers’ commitment to Environmental, Social and Governance (ESG) issues was most pronounced among Gen Z and Millennial respondents.
“This is the first year we decided to measure sentiment about how a retailer’s ESG reputation influences shopping,” said Wu-Lebron. “What our analysis shows is that, if consumers are deciding between two brands with similar product quality and price, the company that better positions its commitment to corporate responsibility could come out ahead.”