Low Prices and Promotions Reign Supreme this Holiday Season

New report finds consumers are spending less this year, looking to Black Friday sales and digital shopping for deals

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Oct 01, 2014, 10:46 ET

ANN ARBOR, Mich., Oct. 1, 2014 /PRNewswire/ -- Cost and e-commerce are key this holiday shopping season, according to the CFI Group 2014 Holiday Retail Spending Report: Black Friday is Back. The annual report found shoppers are planning to spend less money and purchase gifts for fewer people than last year, while also maximizing their budgets through Black Friday and Cyber Monday sales and online cost comparison.

According to the report, which surveyed 1,000 U.S. consumers, 20 percent of consumers plan to spend more than $700 on holiday shopping this year, down from 22 percent last year. In terms of how many people they will buy for, 44 percent plan to buy gifts for more than seven people, down from 49 percent last year. Additionally, the number of people buying gifts for just one to three friends rose to 21 percent from 14 percent in 2013.

As shoppers are working with smaller budgets, the report finds the popularity of the Black Friday/Cyber Monday shopping weekend is on the rise. According to the report, 28 percent of consumers said they're planning on spending more than 50 percent of their total holiday shopping budgets Nov. 28 – Dec. 1. The number is a significant 27 percent increase from last year's report, highlighting a resurgence in the popularity of the shopping holiday.

"Budgets are thin this year, and that continues to affect the way people shop," said Sheri Petras, CEO of CFI Group. "Retailers need to offer competitive pricing in order to be successful this season, especially surrounding the Black Friday shopping period."

In addition to taking advantage of Black Friday promotions and sales, digital shopping also will be on the rise this holiday season, as consumers plan to take to their devices in search of the best deals. This year, 51 percent of consumers plan to spend more than 40 percent of their shopping budgets online. That number is an increase from the 45 percent of consumers last year who planned to spend more than 40 percent of their shopping budgets online. Accessing the Internet while shopping is predominately for price comparison, according to 66 percent of respondents. That price comparison leads to online sales, with 65 percent of consumers planning to use the Internet to make transactions.

"Consumers expect both competitive prices and convenience," Petras said. "With the prevalence of omnichannel shopping, retailers should provide multiple shopping channels for their customers through a combination of a positive in-store experience and consistent and simple mobile and online channels."

For the second year in a row, more than a quarter of consumers said they'll begin their holiday shopping earlier this year than last year, with 26 percent reporting to do so in 2014; 40 percent report they will start their shopping before November
Younger generations are more likely to take advantage of Black Friday shopping with 40 percent of 25-to-34 year-olds planning to take part in the sales, compared with 23 percent of 55-to-65 year-olds
Women report higher budgets than men this year, with 30 percent reporting they plan to spend more this year, compared with 24 percent of men

To download the full 2014 Holiday Retail Spending Report: Black Friday is Back report, please visit www.cfigroup.com.

About CFI Group (www.cfigroup.com)
CFI Group is a global leader in providing customer feedback insights through analytics. CFI Group provides a technology platform that leverages the science of the American Customer Satisfaction Index (ACSI). This platform continuously measures the customer experience across multiple channels, benchmarks performance, and prioritizes improvements for maximum impact.

Founded in 1988 and headquartered in Ann Arbor, Michigan, CFI Group serves global clients from a network of offices worldwide. Our clients span a variety of industries, including financial services, hospitality, manufacturing, telecom, retail and government. Regardless of your industry, we can put the power of our technology and the science of the ACSI methodology to work for you.

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SOURCE CFI Group