Holiday Purchasing Habits: A Digital Advantage for Local Businesses

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1 Holiday Purchasing Habits: A Digital Advantage for Local Businesses Consumer Preferences for Search, Social, Mobile and This Holiday Season

2 Page 2 Holiday shopping season means big profits for local businesses. PREPARING MARKETING PLANS WELL IN ADVANCE CAN MEAN THE DIFFERENCE BETWEEN A LOCAL BUSINESS EXCEEDING YEARLY REVENUE GOALS OR MISSING OUT ON THE BIGGEST SPENDING SEASON OF THE YEAR. Although the average consumer might not think it, the holiday season is upon us and small business owners need to prepare early to gain maximum exposure both online and in-store. Last year s holiday season showed promise in predicting habits for the 2015 holiday season 69 percent of consumers webroomed, or researched a product or business online before going in-store to purchase. With more than $850 billion spent during the holiday season last year, small business owners need to meet their consumers in the digital space to capture a piece of the revenue pie. Connecting with the right audience is the tricky part. What channels are they most active on? Where do they start the online search process? What will actually motivate them to go from an to purchasing in-store? What deals and discounts will be most effective for generating revenue? These are the types of questions small business owners should ask now to be on the right platforms with the right messaging for the holiday season. Armed with accurate data, it s never too early to develop a marketing strategy, and August is the perfect time to plan for maximum profits in November and December. We surveyed more than 1,000 consumers and found the answers to all of these questions, and much more, from what discounts are most effective on social platforms and to when consumers expect to see holiday advertising and how often they search on mobile while out shopping. The findings show an online-first shopping environment, yet small business owners need to capitalize on bringing that traffic from their websites to their storefronts. METHODOLOGY & OBJECTIVES G/O Digital conducted a research study to determine consumer shopping habits during the holiday season. The survey garnered a total of 1,013 responses from consumers who research products online before shopping in-store for the holiday season. The survey was conducted from June 19 through July 8, 2015.

3 Page 3 FAST FACTS SEARCH Go straight to search engines when researching a 62 potential purchase for the holiday season. Search for deals or discounts prior to visiting a store 78 for their holiday shopping. TIMING & LOCATION Actually start holiday shopping in November, but 25 think 42 about their shopping in October. Conduct all of their holiday shopping within 10 miles of where 61 they live. What s more, 18 of that stays within 5 miles. DEALS Prefer to shop at businesses that have the best discounts and 59 promotions, regardless of the business size. Search for current deals and offers from their mobile devices, 28 meaning they re looking for deals while on the go. Do pay attention to shopping holidays and 54 the associated deals and events. Are most swayed to come to a store by discounts of off or more at local businesses. & SOCIAL Want additional sales on clearance items 27 via messages. 55 Want to see holiday-themed s and social ads from local businesses in November. Say is the most influential platform where they ll 51 see a holiday-related message and actually click on it. MOBILE Use smartphones or tablets to shop for 37 the holiday season. Look up store information on their mobile devices while 82 they re out conducting holiday shopping. Search for business location information from their 40 mobile devices.

4 Page 4 Online Research Spurs Consideration Which device do you use most to research local businesses and deals for the holiday season? Laptop or desktop computer Smartphone or tablet Although it s easy to think that there is still a large contingent of shoppers who only shop by in-store browsing, a whopping 71 percent of respondents often or always research products online before shopping in-store for the holiday season. Consumer habits are shifting, and the occurrence of a shopper passing by your store, coming in to browse and actually purchasing something becomes rarer every day. The process starts online, and it is more and more common for businesses to meet customers online by cultivating a compelling digital presence. Online searches aren t just conducted from desktop computers, either; tablet and smartphone browsing accounts for more than one third of all product and service research. Consumers are still primarily searching from their desktop and laptop computers for holiday needs, but the number of mobile searchers continues to climb every year, making mobile marketing a key consideration for small business marketing strategies. Most online searches (62 percent) start at Google or other search engines, but ecommerce sites, like Amazon, also carry a good amount of initial product searches. Surprisingly, there is a small contingent that actually begin searches on Facebook, and that number is likely to grow in the near future with the advent of the Facebook Buy button. What channel do you use most to search and/or research a product for your holiday shopping prior to going to a business? How often do you search for and/or research a product online for your holiday shopping prior to going shopping in-store? 4 Rarely research online before shopping in-store 25 Sometimes research online before shopping in-store 71 Often or always research online before shopping in-store Search engines (Google, Yahoo!, Bing) ecommerce sites (Amazon, etc.) Google+ Business websites Review sites (Yelp, etc) Facebook Other (please specify) Blogs, reports, etc. Twitter Never research online before shopping in-store

5 Page 5 Shoppers Stay Close to Home Also, consumers don t want to go far to shop. With 61 percent of respondents saying they d prefer to stay within 10 miles of their home for their holiday shopping, small business owners have a heavy local advantage, but they need to make sure consumers are aware of their products and promotions to actually entice people to come in-store. How close to your home do you typically shop when patronizing local businesses? 5-10 miles 43 Over 20 miles 0-5 miles miles 29

6 Page 6 Timing Is Everything Although many consumers (47 percent) start thinking about their holiday shopping in October or earlier, they aren t interested in seeing holiday messaging until early November. This coincides with the 74 percent of consumers who actually start shopping for the holidays in November and December. This means that consumers only want to see holiday related messages when they re ready to purchase, and small businesses should be wary of sending holiday-related messages and s too soon. However, small business owners need to start planning their holiday strategy long before November to actually incentivize customers to come in-store. Through appropriate search advertising, marketing and social media efforts, small businesses can stay top of mind throughout autumn and then amp up the holiday messaging when November starts. When do you think about starting your holiday shopping? When do you actually start your holiday shopping? Before September 12 September 10 October 25 November 39 December Before September 12 October 42 November 32 September December When does the timing feel right to see a holiday advertisement? When do you like to see holiday- themed s and/or social ads from local businesses with holiday promotions? September October Early November Late November Early September 18 Responses September 18 Responses October 103 Responses November 601 Responses December 263 Responses Early December Right before the holidays

7 Page 7 Discounts Reign Supreme in Digital Discounts are also popular for helping shoppers choose specific stores. When asked how much price affects respondents decisions to shop at local businesses versus national retailers, an overwhelming 59 percent say they prefer to shop at businesses that have the best discounts and promotions, regardless of business size. This might seem disconcerting for small business owners, but the silver lining is that they have flexibility to be more creative with their discounts and marketing, as opposed to large retailers. Small businesses can use digital marketing techniques to reach a very specific consumer, promote a shopping event, get the word out about special discounts and be agile if an approach needs to change suddenly. Respondents reaffirm that low prices win business, but they re also equally concerned with shopping at stores that carry the specific products they re looking for. In addition to knowing where competitors stand on pricing, business owners need to prepare for the holiday season by having the right selection of products for their customer base and identify which discounts will still be profitable for them this holiday season. How much does price affect your decision to make a holiday purchase at a local business versus a national retailer? What factors influence you to select a store after searching for and/or researching a product online for your holiday shopping? 59 $ 15 $ 10 $ 8 $ 8 $ Prefer to shop at businesses with the best deals and promotions Prefer to shop at businesses I'm familiar with, regardless of price Prefer to shop at businesses that carry my favorite brands, regardless of price Prefer to shop at businesses close to my location, regardless of price Prefer to shop at local businesses, regardless of price The store has the most competitive price The store has a discount/ promotion on the product I want to purchase The store carries the specific product I want The store is close to my home or business The store provides excellent customer service and experience The store is locally owned and I prefer to shop local The store carries the brand I prefer

8 Page 8 MORE THAN 90 of respondents say they search for deals and discounts online Everyone is searching for discounts, on all platforms. In the survey, more than 90 percent of respondents say they search for deals and discounts online prior to shopping in-store. They are searching for most of these deals through search engines, but there is still a good contingent that would look on social networks, deal and coupon sites (like Groupon) and directly through a business website. The bottom line is that consumers have a lot of shopping to do, so if they can find a deal for the product they re looking for, they re going to purchase from that business. When holiday shopping, do you wait to purchase an item until it goes on sale at a local business? At the end of the day, deals are important, but they aren t the be-all and end-all for holiday shoppers. In the survey, 79 percent deem deals important, but not the most important factor when shopping at local businesses. Oftentimes, if the item isn t on sale but is the perfect gift for a friend or family member, they re still likely to make the purchase. Additionally, 33 percent say that it s not always important for them to wait until an item goes on sale to purchase it, but they re more inclined to buy it if it s on sale. Not always, it depends on the item Where do you search most for deals and/or discounts for your holiday shopping? Not always, but I'm more inclined to buy if it's on sale Yes, I always wait for the items I want to go on sale No, I don t wait for sales Social networks Other Deal or coupon sites (Groupon, LivingSocial, etc.) Business website Search engines

9 Page 9 Clearance and Store Sales Matter Most On what platform are you most likely to see a promotion from a local business and actually click on it? Other Consumer preference for type of sale is varied. When asked what type of promotion would make a respondent most likely to purchase an item in-store, the largest group (41 percent) say store-wide discounts of at least 15 percent off would incentivize them. Additional discounts on clearance items are the second most popular type of sale, at 24 percent, and rotating product discounts, such as a percentage off sweaters one weekend and a buy one, get one discount on accessories the next weekend, would bring 12 percent of shoppers in-store for the holidays. This information allows small business owners to be creative with how they re handling promotions. A store-wide sale might not be feasible every weekend, but other discounts can be just as effective if they re marketed correctly. 3 Loyalty or reward points 8 Special event Buy one, get one free discount Discount of 15 off or more When holiday shopping, what type of promotion would make you most likely to purchase an item in-store? New products Early bird discounts Free gift with purchase Promotional events Rotating product discounts Additional discount on clearance sales Store-wide discounts (15 off or more)

10 Page 10 Consumers Watch for Specials on Shopping Holidays Shopping holidays can also be very effective for bringing customers in-store with 55 percent of respondents saying they pay attention to shopping holidays like Black Friday, Small Business Saturday, Cyber Monday and Free Shipping Day. Small business owners can capitalize on these shopping days by offering events and discounts and then promoting them online prior to the actual day. On which winter-season shopping holiday do you shop the most? Small Business Saturday Free Shipping Day Cyber Monday Black Friday I don t pay attention to shopping holidays 55 of respondents saying they pay attention to shopping holidays like BLACK FRIDAY SMALL BUSINESS SATURDAY CYBER MONDAY FREE SHIPPING DAY

11 Page 11 Reach More Shoppers with and Facebook is still, by far, the most effective way to get people to click on a promotion with more than 51 percent of respondents saying they d click on an promotion over a Facebook, Twitter, Google+, text message or mobile promotion. However, it s important to note that 25 percent of respondents would click on a Facebook promotion. Even though it wasn t the largest category, Facebook ads are clearly making headway in the consumer market and may rival and other effective promotional outlets in the near future is an active way to reach a specific audience, as opposed to passive marketing strategies, where holiday shoppers find a business independently. Although it s easy to think that people are annoyed with or have too much in their inboxes, it s actually an incredibly effective platform. Eighty-three percent of respondents say they re at least somewhat more likely to visit a local business after receiving a holiday-related message from that business. Facebook Google+ Mobile phone What types of promotions influence you most to do your holiday shopping at local businesses? Text message Twitter How likely are you to visit a local business after receiving a holiday-related message from that local business? 83 Likely 17 Not likely

12 Page 12 When it comes to marketing, respondents are most incentivized by additional discounts on clearance items to go in-store and actually purchase. Following closely behind clearance sales was store-wide sales, which are always popular with consumers. Additionally, rotating product discounts incentivize 16 percent of shoppers to go from an to in-store and purchase. Business owners should consider being creative with their discount offerings, opting for a strategy with daily or weekly changing discounts and even special offers for shopping holidays. Along with the rise of Facebook s prominence as an outlet to get respondents to click on promotions, it s also doing well with converting shoppers to actual buyers. Almost a third of respondents have actually purchased an item from a local business based on a Facebook ad they saw related to that product. Because of its mass appeal and advanced targeting features, Facebook allows small businesses to reach a very specific audience interested in their deals and promotions. What type of information in messages and/or on social media influences you to purchase an item at a local business for your holiday shopping? Early bird discounts New products Free gift with purchase Rotating product discounts Promotional events Store-wide sales Additional discount on clearance sales 29 Have purchased an item based on a Facebook ad

13 Page 13 Make It Optimized for Mobile Mobile compatibility for your site isn t only important for search results; it s also a major part of the in-store shopping experience. When asked if respondents would look up store information on their mobile device while out doing their holiday shopping, 82 percent say they are at least somewhat likely to do so. Consumers are looking for a variety of things while on their mobile devices, from business addresses and hours (40 percent) and a phone number to call and ask a question (10 percent) to checking out customer reviews (15 percent) and looking for current deals and offers (29 percent). Whatever the reason for searching, it s clear that holiday shoppers are on the go and need business websites to be compatible with devices they re using. 40 Business address and hours Current deals and offers Customer reviews Phone number to contact location 10 5 What local business information do you typically search for when on your mobile device? Current inventory Social media accounts Not Likely 25 Very Likely Somewhat likely Likely = How likely are you to use your mobile device to look up store information while doing your holiday shopping?

14 Page 14 Conclusion Holiday shoppers use online information to make decisions about what businesses they ll visit to make in-store purchases. Small business owners have to be visible in the digital space to both their current and intended audiences if they want to compete with big box retailers (and budgets) this holiday season. With the right information about their audience, local businesses can craft marketing strategies that encourage early consideration when consumers think about holiday shopping and carry them through to actual purchases. About G/O Digital Be Found. Get Connected. Stay Engaged. See Results. At G/O Digital, we understand that marketing can no longer be limited to traditional advertising methods and that digital integration is the future. We understand that the conversation between consumers and businesses has changed and will continue to evolve, and our team of digital marketing specialists has the expertise to meet these changes head on. Boost leads, retain customers and grow your business with G/O Digital s team of digital specialists. For more information, visit. Contact Us For Media Relations and Corporate Communications, please contact: Andrea Parker, Senior Content Marketing Manager G/O Digital Tel: (602) ajparker@

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