With holiday decorations going up earlier each year, and Black Friday and Cyber Monday behind us, it can be tempting to think that the peak of the shopping season has passed. However, I wanted to take a moment to share some findings with our partners and friends that clearly indicate that shopping behaviors have fundamentally changed in recent years. Many shoppers are becoming savvier, doing more comparison shopping and holding out longer in hopes of scoring deeper discounts or free shipping offers online. For instance, Microsoft Advertising’s recent joint study—in partnership with Carat—indicates that 57% of shoppers now use discount coupons more often and 53% spend more time looking for promos/deals than in the past.

The holiday retail season is far more complex than one or two days of early morning sales. While the online shopping season starts earlier, it also lasts longer. We call the span between December 1-17 “December Dash” because last year we saw sustained spikes in clicks for retail and advertising during these days. Early indications point to this trend continuing this year: Based on an index of top retail-related search queries², we are currently on target to see 36% more retail search activity in December 2010 compared to December 2009.

So, how should advertisers adjust their plans? Stats like these are telling – those that continue to put all their advertising eggs in the Black Friday/Cyber Monday basket are missing major opportunities to reach consumers.

We worked with Carat to determine how shopper behavior has changed, specifically how shoppers approach purchase decisions and the media that influences purchases across popular retail categories. The results were pretty fascinating. We can think of no better holiday gift for our partners than consumer insights that can help influence holiday campaign management. Here’s five top key takeaways and suggestions for advertisers during December Dash.

1. Paid media is as important as Owned and Earned media. While people are very influenced by Owned and Earned media, more Home Electronic purchasers actually changed their mind about a brand after viewing research through Paid media (62% for Paid versus 56% for Owned and 47% for Earned). This demonstrates the important influence of Paid media, and points to real opportunities to shift and enhance brand perception through online advertising. 

2. Purchase decisions are no longer linear, they’re dynamic. The traditional purchase paths of decades past have acted more as a funnel. But online shopping, the reverberating effects of the recession, and technology tools available to consumers today have evolved the path to function more dynamically, like a tumbler. Our study revealed that today’s shoppers seek better values, do more advance research, research using multiple channels, visit a reduced volume of retail stores in advance of purchase, and utilize word of mouth to review and share online and offline after the point of purchase. We are encouraging our clients to start holiday advertising earlier and end later than in years past, and develop multi-screen campaigns to effectively connect with these shoppers no matter where they are researching, shopping or sharing online.  

3. The shopping journey is more complex than ever. Despite that, there are some patterns. The study revealed three basic patterns in shoppers’ paths to purchase across all the retail sectors we examined: Shoppers either purchase on an unplanned, unresearched impulse, out of habit (for instance, shoppers who routinely buy the same brand of soda out of habit), or after conducting prior research (offline or online). Though these patterns are somewhat universal, the percentage of purchases that fall into each category can vary greatly depending on retail sector. For instance, most Home Electronics purchases (63%) tend to be researched, while Grocery purchases (66%) tend to be habitual. Notably for advertisers, even habitually-leaning grocery shoppers purchased a new or different grocery or personal care product than their habitual choice more often when they had been exposed to online advertising before shopping. Online advertisers—particularly those that create engaging campaigns to make a lasting impression—can influence shoppers, even if shoppers acting on impulse or habit.

4. Today’s shoppers are very reliant on digital media. 70% of Home Electronics buyers rely on the Internet to research their purchase. This is twice as frequently as this group utilizes television for research, and nearly twice as often as they base their purchase off of the recommendations of family and friends. More people are shopping online and relying on the internet for research; online advertising is a no-brainer.

5. Post purchasing behavior is becoming even more significant. We’ve all seen shoppers who use digital media post product reviews on a retailer’s site or share recommendations through channels like Facebook and Twitter. This study showed something remarkable: Those actions can heavily influence future shopping, especially in highly-researched categories like Home Electronics. This can be good news for advertisers, whose dollars can potentially continue to generate positive action even after the point of sale.

With these insights in mind, we’re advising our advertising clients to adjust how they plan their holiday ad campaigns in order to maximize reach and improve sales. To read more, please download our white paper and let us know if we can walk you through the findings. Happy Retailing!

Thank you,

Keith

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¹ comScore, “State of the US Online Retail Economy, Q3 2010.” November, 2010

² Top 200 keywords based on Hitwise search data for the Shopping and Classifieds industry, plus select generic seasonal keywords (e.g. “gifts”, “Holiday shopping”) etc.