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Online spending to surpass in-store for the first time this holiday

Shoppers last year enjoyed Santa's Wonderland at Bass Pro Shops in Brandon. But the holiday turnout at stores continues to lose ground to the growth in popularity of online shopping. 
[JAMES BORCHUCK   |   Times, 2016]

Shoppers last year enjoyed Santa's Wonderland at Bass Pro Shops in Brandon. But the holiday turnout at stores continues to lose ground to the growth in popularity of online shopping. [JAMES BORCHUCK | Times, 2016]

There may be a new victor in the years-old battle for holiday bucks between online and brick-and-mortar stores.

Shoppers plan to spend 51 percent of their holiday budgets online compared to 42 percent in stores, the first time online spending has come out on top, according to a 5,000-person survey released this past week by Deloitte. The remainder of the average budget, about 7 percent, will go toward a mix that includes catalogs and direct mail.

Customers expect to allocate even less (28 percent of budget) at department stores, which have long-struggled in the e-commerce boom. That's a 4 percent decline from last year.

In past years, customers used the Internet to search for deals, compare prices and look for recommendations. Eventually, they would go to the store for the final purchase. Not any more — more people will handle the entire process online. Industry experts project online spending will continue to increase.

"Shoppers are more savvy and have mobile apps to help keep them in-the-know about sales," retail expert Ebony Grimsley-Vaz said. "Why rush out if you have two apps on your phone and Google Shopping to tell you the best deals with free shipping while you're in your pajamas?"

RELATED COVERAGE: Local retailers seek the right cyber/storefront mix

Access to the online deals is not the only factor to the changing spending patterns during the holidays. In recent years, many customers have expressed dissatisfaction with Black Friday -- the unofficial start of the holiday shopping season. They raised concerns about employees working rather than spending time with family, over-crowded stores and out-of-stock sale items.

"I don't go anymore, because (stores) open too early and don't give their employees a chance to have dinner," Harmony Davis, who previously enjoyed shopping with her daughters on Black Friday, wrote in a Facebook post.

Retailers have begun to open earlier and earlier to capitalize on the hoopla of the weekend. Last year, JCPenney opened at 3 p.m., Toys R Us at 5 p.m. and Target at 6 p.m. on Thanksgiving Day. Most Walmart locations, which already are open 24 hours, offered specific times for its in-store specials. Some retailers closed down entirely.

"I do not participate," Cheryl Lerman said in a Facebook post. "I have a really hard time giving thanks for all that I have while running out to get more and knowing that the employees have lost out on their Thanksgiving dinner."

There are still, however, those who embrace some of the shopping traditions of Black Friday.

"We look forward to it every year," said Toni Santiago on a Facebook post, who also wishes the deals started Friday morning instead of Thanksgiving Day.

Customers should expect the deals start even earlier this year, predicted expert Grimsley-Vaz.

"Those retailers that figured out the value of planning earlier were able to create better shipping deals, figure out how to incorporate more online advertising… and will be better prepared to serve up products their customers want to see," she said.

Not all customers will be handing out physical gifts this year. More want to spend money on hosting and attending parties with family and friends. This year, gifts may make up only one-third of the holiday budget. Another 27 percent are considering purchasing "experiences" such as concert tickets, vacations and restaurant meals. However, clothing, toys and electronics still go-to holiday items for shoppers.

Retailers, meanwhile, continue to expand online ordering options. Target is launching a new service, called Gift Now, that allows customers to send their presents via email. The receiver can accept the gift or exchange it for another Target item or a gift card. Then, they will be prompted to input a mailing address for the gift to be delivered.

As with past years, Cyber Monday or Green Monday, which is the second Monday of December, will offer the same or even better discounts.

"Both will continue to give businesses an uptick in typical sales, but it traditionally doesn't yield the desired effect as Thanksgiving weekend," said Grimsley-Vaz, who also owns Above Promotions Company. "However, they can expect to see some shoppers exploring any unique items not typically discounted."

Contact Tierra Smith at tsmith@ tampabay.com. Follow @bytierrasmith.

In addition to the dominance of online shopping this holiday season, a recent survey also predicts:

• Holiday sales will top $1 trillion between November and January

• One third of holiday budgets will go toward physical gifts with more funds for "experiences"

• Shoppers will spend about $430 on about 15 presents.

• Shoppers will spend an average of $1,226 during the holiday season while high-income families with incomes over $100,000 will dish out more than double.

Source: Deloitte

Online spending to surpass in-store for the first time this holiday 10/27/17 [Last modified: Friday, October 27, 2017 5:12pm]
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