Retail Surveys

As holiday season ends, spending wanes

Jan 6, 2012

Port Washington, N.Y.--The number of shoppers in the market is beginning to decline, according to The NPD Group, reporting that 66 percent of consumers went shopping at a brick-and-mortar retail store the week ending Jan. 2, compared to 69 percent the previous week.

Specifically, shopping visits to national chains were down 11 percent and visits to department stores were down 9 percent. Despite the decline in visits, the shopping conversion rate remained stable at 68 percent, and increased in some channels, including department stores (up 2 percent) and national chains (up 2 percent).

As overall visits declined, however, so did the average amount spent per buying visit, NPD found. Consumers spent 6 percent less the week ending Jan. 2 than they did the previous week, which bring the average amount spent per buying visit down to pre-Black Friday levels.

“While this is not unexpected or surprising, it remains one of the greatest challenges of retail--how to sustain the interest and momentum of the holiday season after Christmas,” Marshal Cohen, chief industry analyst at NPD, said. “For the post-holiday shopping season this year we have seen less inventory to give away. The season was front-loaded self-gifting. And most important, a lack of newness haunts holiday again.”

Cohen added there were so few “key items” this year that odds are consumers found the item and didn’t need to shop for it after Christmas.

Online shopping activity has also continued to decline, with the online share of buying visits dropping to 12 percent the week ending Jan. 2, down from 14 percent the previous week. This decline brings the online share of buying visits back to pre-holiday levels.

“What retailers and brands need to do now is move into ‘product mode,’ not just stay in ‘price mode,’” Cohen said. “Product needs to become the focus of businesses sooner rather than later, because in order to get growth, there needs to be something really new and different to capture consumers’ dollars.”

Cohen said consumers showed this season that they shop for deals, but also purchase new products that are relevant.

“So as the deals are waning, new products need to emerge,” he said. “Profit margins can’t afford a full-time discount program. Selling at full price and building margin is where these exiting, new and relevant products come in.”

The data comes from NPD’s Shopper Activity Weekly Holiday Trends report, which followed weekly shopping trends over the course of the 2011 holiday season.

 

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