Christmas shoppers focus on quality rather than deals

While discounts drive purchasing in the early days of the holiday shopping season, consumers are turning to deeper, quality gifts in the latter half of the season as overall spending growth slows.

US consumers have spent $187.3 billion so far online from November 1 to December 12, up 6.1% from the same period last year, according to Adobe Analytics. Total holiday e-commerce spending is still expected to exceed $253 billion, representing a 5.3% increase over last year, with the growth rate slowing later in December as delivery approaches in time for Christmas.

Casey Armstrong, chief marketing officer at ShipBob, told CNBC that e-commerce sales typically slow sharply around December 16-18, then “rapidly decline” in the following days, until Christmas Eve becomes the slowest shopping day of the season. Shopping picks up again on Dec. 27, typically the strongest day for late-season ShipBob customers, Armstrong said. The company is a third-party logistics company that ships for small, medium and socially oriented brands.

For shoppers who want to order online in the latter half of the season, it’s quality, not discounts, that attracts interest.

Captify analyzes more than 1 billion search events daily from 3 million websites, showing explosive search growth for apparel and sports brands including Alo Yoga, Warby Parker, Aritzia, Bombas and Quince through December compared to earlier in the season. Searches for Alo Yoga were up 256% during the period from December 7 to 15 compared to the stretch from November 28 to December 6. Searches for quince rose 124% for the same time frames.

“These gains indicate an increase in thoughtful, quality-driven gifts as shoppers look for products from established brands,” said Oscar Chow, Captify US Head of Insights.

RetailNext, which tracks in-store shopping, has also seen evidence that consumers value quality this season, even if it means buying fewer items.

“Consumers are willing to pay more to get these decisions right,” said Joe Chastain, global director of advanced analytics at RetailNext. The company expects this dynamic to reach its peak in the days leading up to Christmas.

There is also evidence showing a shift toward gift and subscription experiences as the season winds down. They’re offering shoppers a “deadline-worthy gift,” Chow said.

Examples include growth in interest in the final weeks of the season for Roblox Robux, Cameo Kids, Kindle Unlimited, Strava Subscription, Peloton All-Access, MasterClass, and Disney+ subscription bundles, Hulu, and HBO Max subscriptions.

Discounts are still available as the holiday shopping period winds down, but they’re much lower than during the highs of Cyber ​​Week. Adobe Analytics said toys would see the biggest promotions, peaking at 15% off list prices in December, followed by furniture, bedding and televisions at 10% off.

There are certainly consumers who are motivated to discount all season long, making gaming a strong category. Data from Adobe and Captify show that consumers are still searching for Mattel’s Barbie Dreamhouse, Disney’s Stitch toys, Play-Doh sets, and more. The Toniebox 2 audio player and the Lady Rachel Tonies statue are “one of the big buzz items,” Armstrong said.

For those who want to give a physical gift, stores are crucial in the days leading up to Christmas.

The retail industry has dubbed the last Saturday before Christmas “Super Saturday” and it is often one of the best in-store shopping days of the year. But with Christmas falling on a Thursday this year, volume is likely to be lower on Super Saturday this year than on December 22-24, according to RetailNext.

“We expect some of the highest conversion rates of the season to occur in the final days before Christmas, potentially rivaling or even surpassing Black Friday,” RetailNext’s Chastain said.

Warmer temperatures and drier conditions hitting much of the country this weekend should also help boost store traffic this weekend, according to Evan Gould, executive vice president of global partnerships and alliances at Planalytics.

Shoppers who don’t want to hop between stores, but also don’t want to risk shipping timelines, are increasingly using buy online, pick up in store (BOPIS) options in the final stretch of the holiday shopping season. Adobe Analytics expects BOPIS to peak on December 22 and 23, with 32% to 37% of e-commerce orders using the service, a significant spike in typical usage from the rest of the year.

Kohl’s told CNBC that its pickup orders more than doubled in the week before Christmas, and a quarter of shoppers who receive an online order end up buying something else while they’re there.

At Bath and Body Works, about 30% of customers who take orders online add something before paying.

It is also a cost saving for retailers to fulfill online orders from stores. Target said picking up or picking up an order saves the retailer 90% on brown box delivery from fulfillment centers. So far this season, three-quarters of digital orders have been received from stores.

Walmart told CNBC last year that its scheduled weekly pickup volume increased 14% in the two weeks before Christmas compared to average volume in the previous 12 weeks. More than 80% of Walmart customers say they shop at the store in the three days before Christmas, according to a customer insights and holiday pulse tracking strategy conducted this month.

Last December, volumes for Walmart Express Delivery, which are orders fulfilled from store inventory that come with additional fees, reached 2.5 times the monthly average. The retailer said that on Christmas Eve alone, 77% of digital orders were fulfilled via the express option.

While Dick’s Sporting Goods declined to share details, the retailer said it is seeing a “huge spike in BOPIS” heading into Christmas, and is also seeing a “price tag” for shoppers to “make sure they get last-minute gifts in one trip to the store.”