Survey: Puerto Rican consumers plan to shop 13% less during holiday season
Having the world’s longest holiday season will work in favor of Puerto Rico-based retailers as they face a 13% drop in shopping intention this year compared with 2019, according to results from “Santa’s List 2020,” the fifth edition of the annual holiday consumer survey done by advertising agency Arteaga & Arteaga.
The last big drop in Christmas shopping intention was in 2017 post-Hurricane María, the survey showed. Puerto Rico’s holiday season starts on Black Friday and ends more than a week beyond the Jan. 6 Three Kings Day celebration.
Despite a significant drop in customer’s shopping intention, the “Santa’s List” holiday survey provides retailers with insight into the shoppers’ mentality in time to sharpen their retail sales and brand strategies to offer shoppers timely information ahead of the holiday season, the study confirmed.
“A longer shopping season also means retailers will have that many opportunities not only to deliver the best value and customer experience online and offline, but also connect emotionally with consumers as they look for unique gifts for their significant ones. Smart retailing will be key to saving the holiday shopping season which represents about a third of the island’s $30 billion industry.
The pandemic not only impacted consumers’ overall Christmas shopping intention this year, it brought retail sales down 11.4% during the first six months of the year, the study showed.
“However, consumers’ dwindling shopping intentions doesn’t mean shoppers won’t spend any money this year, instead, they’ll be laser focused on finding smart gifts for their significant others. In fact, gifts were the only type of Christmas purchase that participants expressed an increased intention compared with 2019,” according to the study,
While Black Friday is considered the best time to secure holiday deals, consumers will continue to look for special sales up until the week before Three Kings Day. Christmas online shopping, which had been on the rise prior to the pandemic, will attract new customers looking to complete their holiday shopping online for convenience and safety reasons.
Whether in-store or online, shoppers will be looking for value. A whopping 91% of consumers surveyed said they’re planning to purchase gifts or products that are on sale. Four out of 10 shoppers will shop on sale only as they did last year, the study revealed.
News of COVID-19 vaccine, a gift of hope
As a result of the global health crisis created by the COVID-19 pandemic consumers have experienced almost a year-long lockdown, lower disposable income, curfews and overall instability thus having a negative impact on how people prepare for the holidays.
More than half, or 52%, of the participants in this year “Santa’s List 2020” survey, confirmed that their household economy is not ready for this year’s expenses, while 20% feel optimistic about the holiday season. One out of every four consumers said their family’s economy hasn’t changed since last year.
If approved by the U.S. Food and Drug Administration, Pfizer’s COVID-19 vaccine produced in partnership with BioNTech, could be available for high-risk populations in the United States, including Puerto Rico, by the end of the year, giving consumers a much-needed hope boost, they said.
Purchase intentions, meaningful gifts
With Christmas purchases intention down 9.8% this year, consumers will invest time to find that special gift for significant others in their life which marks a shift in consumer priorities this year.
However, with a 74% purchasing intention, “Gifts” is the only retail category that participants expressed an increased in shopping intention compared with 71% in 2019.
Despite a 7% to 10% decrease in purchasing intention in other categories, consumers will still look for good deals in apparel for family; home décor; apparel for me and food & beverage for parties, according to the study.
Traditional retail venues like shopping centers, discount stores and department stores continue to be the main places for Christmas shopping according to Santa’s List 2020 holiday consumer survey.
“Despite an unusual year, I feel optimistic about this year’s holiday season. We’ve incorporated best-in-class health and safety protocols to protect our employees and customers during the holiday season and beyond,” said Martha Hermilla, senior director of marketing of RVI, the island’s largest shopping center company with 12 malls, including Plaza Del Sol, Plaza Del Norte, Plaza Rio Hondo and Plaza Palma Real in Humacao.
“Store tenants have worked very hard to offer the most complete merchandise mix to meet every budget need and to help customers along their shopping journey,” she said.
The holiday study confirms a trend this year as town shops and local stores grow in popularity. Town shops present the highest percentage, 11%, where consumers kickstart their holiday shopping.
“We’ve incorporated online sales to stay connected with clients during the pandemic,” said Annie Alfaro, owner of The Smart Shop, adding “I feel optimistic about the holiday season, there’s awareness and interest in supporting local stores, artisans and small businesses in general. Retailers must be creative and use technology.”
Have you been naughty or nice?
Consumers have made their budget adjustments to prepare for the holidays including reducing entertainment activities such as live events and traveling; they are focusing on making home improvements, decorating for the holidays and spending on gifts for their immediate family.
Kids will take priority on Santa’s List this year with 47% of consumers focusing on family, especially kids, with less expensive gifts. Gifts for extended family will be reduced by 29%, while consumers will reduce gifts for friends by 36%, the study showed.
Gifts with meaning will be very popular this year. For example, certificates of accessories for cars, an oil and filter change certificate, a basket with healthy products, books by local writers, arts and crafts and music by emerging artists are some of the gifts you may find in Santa’s List this year.
“When thinking about our children this year, our Navi Coop (Christmas Club), opening a new savings account or a secured credit card for the older kids, are excellent gift ideas,” said Eddie W. Alicea-Sáez, CEO of Cooperativa Sagrada Familia.
“More than just money, we’re teaching our children about the importance of savings and how to manage your personal finances from an early age,” he said.
One of the few retail categories that has managed to grow after reopening the economy is the automotive industry, particularly within the luxury category. In the economy-car category, several new lifetime warranties are helping drive new car sales.
Given the fatigue caused by the pandemic, during which time consumers have focused on their health and staying home, it is understandable that “Health & Meds” and the “Home Improvements” categories, with 72% and 28% respectively, are the areas where consumers are trying their best to keep the same budget as previous years.
The “Holiday Entertainment” category, including movies, concerts, vacations and parties will continue to be the most impacted by the pandemic.
Click and shop, Xmas Online
As the pandemic forced communities into confinement online sales continued to grow. The trend will remain steady during the holiday season, showing a significant 26% increase during the past five years.
A whopping 66% of those surveyed indicated they will continue to make purchases online. The biggest jump in online sales this year will come from 13% new shoppers who will complete their Christmas shopping online for the first time. This is in keeping with overall increase in visiting online stores and favorite online apps, 13% and 10% respectively.
Interestingly, there has been a 9% drop in the use of social media links to lead to Christmas shopping purchases, the study showed.
From Black Friday to Three Kings Day
With shopping season extending from Thanksgiving until the week before Three Kings Day, consumers will have plenty of time to find the gifts they are looking for at the prices they can afford.
With 53% of consumers doing their shopping either before or after Black Friday, the traditional “best day” for Christmas shopping will be one of many opportunities for buyers to complete their Santa’s List this year. Black Friday, however, represents only 18% of consumers who will stick to the one-day shopping spree.
Interestingly, there’s increased interest among 28% of consumers who expressed waiting until the week before Three Kings Day to make holiday purchases.
“Keeping customers engaged will be critically important this year, they’ll be making purchasing decisions until the week before Three Kings Day which means there will be many opportunities to make that emotional connection to drive sales,” said Juan Arteaga, president of Arteaga & Arteaga.