2017 deloitte holiday study chicago market results...2017 deloitte holiday study –chicago results...

2017 Deloitte holiday studyChicago market results

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2017 holiday retail surveyAn annual analysis of the peak shopping season

Holiday retail spending is bucking trends this season with only one-third of holiday budgets going toward gifts.

Online spending is expected to exceed in-store for the first time. In addition to gifts for others this year, spending on experiences and self-gifting increased. Explore more consumer spending trends in our 32nd annual holiday survey.

Click here to read Deloitte’s national holiday retail study. study for 2017.

Stacy Kemp

Principal, Chicago retail sector leader, Deloitte Consulting LLP

[email protected] │ +1 312 486 2378

Copyright ©2017 Deloitte Development, LLC. All rights reserved. 2017 Deloitte holiday retail study – Chicago results

Get in touch

https://www2.deloitte.com/us/en/pages/consumer-business/articles/holiday-retail-sales-consumer-survey.html

mailto:[email protected]

2017 Deloitte Holiday Study – Chicago resultsCopyright © 2017 Deloitte LLP. All rights reserved. 3

2017 Deloitte holiday retail study – Chicago resultsCopyright © 2017 Deloitte Development, LLC. All rights reserved.

Key insights – Chicago marketEconomic outlook & holiday spending

• Most (71%) of Chicago respondents believe the U.S. economy will remain the same (38%) or improve (33%) in 2018;however, Chicago respondents’ outlook on U.S. economy not quite as optimistic compared to last year

• Just over a quarter (26%) of Chicago respondents planning to spend less this holiday season compared to 2016; however,overall average expected spend for the 2017 holiday season increased to $1,220 per Chicago respondent from $1,125 in 2016

• Non-gift “experiences” now represent the largest portion (40%) of average holiday spend in Chicago

Holiday shopping: What, where & when?

• The number of gifts surveyed Chicago shoppers plan to buy has decreased from 15 in 2016 to 13 in 2017

• Internet sites and mass merchants remain the top shopping destinations, with internet sites showing largest increase from 2016 to 2017

• Clothing and toys comprise almost 50% of surveyed Chicago shoppers’ planned budget allocation

• Shopping skews late in the season, with many surveyed Chicago shoppers seeking post-holiday sales to buy non-holiday items

Digital influence: Use of online & mixed channels

• Expectations of surveyed Chicago shoppers’ online spending (50% of budget) exceed those of in-store spending (43%) for the first time

• The vast majority (91%) of surveyed Chicago shoppers will use a desktop/laptop during the shopping journey• Surveyed Chicago shoppers’ propensity to shop via smartphone is up, taking on a variety of mobile payment forms

Retailer policies: Shipping & returns

• Three quarters of surveyed Chicago shoppers plan to take advantage of free shipping, and almost 90% consider free more important than fast

• Still, there are high expectations around shipping speed, with surveyed Chicago shoppers expressing low willingness to pay for even expedited terms

• Expectations of flexible return policies remain higher and important to Chicago respondents

Shopping by age, income & education level

• Higher income shopper segments ($100K+) are expected to spend nearly double the market average ($2,429 vs. $1,220)• Spending on “experiences” also varies with age, greater with younger ages and then declining among older respondents• Internet leads among all income levels and younger age groups• Spend, device usage and web research increase with education level

Source: Unless otherwise indicated, all data in this presentation is from the 2017 Holiday Retail Study, Deloitte Consulting LLP, 2017


2017 Deloitte holiday retail study – Chicago resultsCopyright © 2017 Deloitte Development, LLC. All rights reserved.

Snapshot of Chicago respondent sample

The Chicago sample contained 428 respondents:

• 52% female, 48% male

• On average, 45.8 years of age

• 49% are married, 51% not married

• 49% have children, 51% do not have children

• Average annual household income before taxes of $73,300

• 43% with annual household income < $50K, 32% $50K - $100K, 25% > $100K

• 61% are Caucasian, 17% African-American, 16% Hispanic, 3% Asian, 3% other

Economic outlook & holiday spending


2017 Deloitte holiday retail study – Chicago resultsCopyright © 2017 Deloitte Development LLC. All rights reserved.

Less positive outlook on U.S. economy

Chicago respondents are less positive about the outlook for the U.S. economy compared to last year

“In your opinion, what is your overall outlook for the U.S. economy in the year 2018, compared with today? Would you say it will likely...?”

“Improve”Down from 45% in 2016

U.S. economy will…

“Weaken”Up from 20% in 2016

Improvesignificantly

Improvemodestly

Remain thesame

Weakenmodestly

Weakensignificantly

2017 9% 24% 38% 16% 13%

2016 5% 39% 36% 13% 6%

2017 2016

33% of Chicago respondents believe the U.S. economy will improve compared to 41% of national respondents

33% 29%



Chicago respondents planning to spend less (26%) this holiday season compared to 2016 (22%)

Top reason for spending less is saving more instead of spending

74% of surveyed Chicago shoppers expect to spend the same or more, with the top reasons being improved household finances and feeling more generous

“How will your total holiday spending compare with last year's holiday season? Please consider all holiday gifts, holiday entertainment/socializing, holiday decorations, holiday donations, etc.”

14% 16% 20% 16% 15% 19% 17% 18%

57%62% 58%

58%54%

56% 57%60%

29%22% 22% 26%

31%25% 26%

21%

2014

CHICAGO

2015

CHICAGO

2016

CHICAGO

2017

CHICAGO

2014

NATIONAL

2015

NATIONAL

2016

NATIONAL

2017

NATIONAL

Spend compared to last few holiday seasons

Spend more Spend same Spend less


Copyright © 2017 Deloitte Development, LLC. All rights reserved. 2017 Deloitte holiday retail study – Chicago results

Current household financial situation

29%

48%

23%

41%

38%

21%

37%

44%

19%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

A lot/somewhat better

The same

A lot/somewhat worse

National 2017 Chicago 2016 Chicago 2017

Though 77% of surveyed Chicago shoppers still perceive their financial situation as the same or better

Chicago respondents’ household financial situations worsening compared to last year and national respondents

“Thinking about your household's current financial situation, would you say it is...”



Experiences now represent largest portion of average holiday spend for surveyed Chicago shoppers

Anticipated average spend for Chicago (2017):

$1,220

Gifts projected to represent only one third of average holiday spend in Chicago

^ Actual products not gift cards.* Experiences - socializing & entertainment

◊2016 Chicago average gift spend ($1,125 or 8% less)

$446 ,

36%

$291 ,

24%

$484 ,

40%

Gift vs. non-gift spend

Gifts Non-gift Experience

$345 ,

28%

$101 ,

8%

$345 ,

28%

$139 ,

12%

$88 ,

7%

$124 ,

10%

$78 ,

7%

Category spend

Gifts^

Gift cards

Socializingoutside home*

Entertaining athome*

Homefurnishings

Non-giftclothing

Other (Misc.)

Holiday shopping:What, where and when?

2017 Deloitte Holiday Study – Chicago resultsCopyright © 2017 Deloitte LLP. All rights reserved. 11Copyright © 2017 Deloitte Development LLC. All rights reserved.

2017 Deloitte holiday retail study – Chicago results

“In total, what is the number of gifts, including gift certificates/cards that you expect to buy this holiday season?”

Decrease in number of gifts to be purchased by Chicago respondents driven by saving more, worse financial situation, paying down debt, and higher food prices

Chicago respondents plan to purchase two fewer gifts compared to last year and almost two fewer gifts than the national average

12.1 12.3

15.0

13.0

13.4

13.713.9

14.7

12

12.5

13

13.5

14

14.5

15

2014 2015 2016 2017

Number of gifts purchased

Chicago National

76% of Chicago respondents anticipate shopping at the same stores and online retailers as last year.



46%

45%

32%

28%

38%

48%

18%

24%23%

22%21% 19%

17%

15%

2014 2015 2016 2017

25%

“At which of the following retail sources or venues will you likely shop for holiday gifts?”“How many individual shopping trips do you expect to take when purchasing holiday gifts over the next several months? (A "trip“ is defined as a single outing to visit one or more physical stores.)”

Traditional Department Stores

Toy Stores

Off-Price Stores

Restaurants/Fast-Food

Warehouse membership clubs

Specialty Clothing

Internet (including auction sites)

Outlet stores

Mass Merchants(was Discount/Value pre-2017)

Internet sites and mass merchants remain top two destinations

In Chicago market, internet sees the largest increase from 2016 while traditional department stores see the largest decline from 2016

+6% since 2016

-9% since 2016

-1% since 2016

-3% since 2016

Chicago’s top shopping channels



Prefer shopping online rather than in-store

Agree48%

Neutral30%

Disagree22%

Reason for preferring online

64%

62%

58%

53%

51%

50%

44%

43%

42%

40%

39%

Convenience - comfort of shopping from home

Free shipping

Time saving

24X7 availability

Easy to compare prices

Home delivery

Prices are better

More merchandise or product selection

Access to customer reviews

Easy to compare products

Access to detailed product details

Top barriers to shop online are no free shipping, merchandise not available and prices not competitive enough

Almost half of Chicago respondents prefer shopping online

“I prefer shopping online rather than in the physical store during the holiday season.” “What are the reasons you anticipate shopping online instead of in a physical store?”



Prefer shopping in-store rather than online

Agree39%

Neutral34%

Disagree27%

Reason for preferring in-store

57%

45%

41%

36%

35%

30%

30%

30%

27%

21%

20%

Ability to interact with the product

Avoid shipping costs

Gives me gift ideas and inspiration

Easier to make returns later

Is festive & puts me more in holiday spirit

Need to acquire gifts immediately

More merchandise or product selection

Personal or family traditions

Better prices and promotions

It is more social to be with other people

Store associates' ability to assist me

Top barriers to shop in-store are crowds, long lines/slow checkout and items/sizes often out of stock

Just over a third of Chicago respondents still prefer shopping in-store

“I prefer shopping in the physical store rather than online for holiday products.” “What are the reasons you plan to shop in a physical retail store rather than online?”



Percent of average anticipated gift spend

Source: Deloitte surveyAvg. spend is calculated only for the respondents who plan to purchase at least one item from the above mentioned categories*Others include data plans, gift cards/gift certificates/money, tickets to events, and socializing experiences.

Clothing &

Accessories28%

Electronics &

Accessories12%

Toys & Hobbies

19%

Home &

Kitchen9%

Health &

Beauty12%

Others

(misc.)20%

Clothing and toys comprise almost half of surveyed Chicago shoppers’ planned budget for gifts

Change in preference: Clothes (52%), toys & hobbies (47%) and health & beauty (46%) are the top gifts to receive by Chicago respondents in 2017 compared to top three in 2016 of electronics (40%), cash (40%) and gift cards (40%).

Gifts represent 36% of respondents’ overall budget spend


Copyright © 2017 Deloitte Development, LLC. All rights reserved. 2017 Deloitte holiday retail study – Chicago results

EarlyBefore October/ October/November, before Thanksgiving Day

Late NovemberBlack Friday/ Weekend after Thanksgiving/Cyber Monday/Late November

December or LaterDecember/January

Most surveyed Chicago shoppers complete their shopping after Thanksgiving

Compared to 2016, surveyed Chicago shoppers expected to buy later in the holiday season

“By which one of these days or months do you expect to complete the majority of your holiday shopping this year?““Will any of your holiday shopping be after Christmas Day (December 25th)?”“Thinking about all of the holiday shopping you will be doing this holiday season, what percentage of your total holiday shopping will be done after Christmas Day - meaning December 26th through the 31st, or in January 2018?”“When you shop this year after Christmas day, will you still be buying items for this 2017 Holiday season, or for the next 2018 Holiday season?”

18%

31%

51%

38%

32%

16%

14%Buying for next2018 season

Buying for bothseasons

Still buying forthis 2017 season

Neither, I amtaking advantageof after-Holidaysales for non-holiday items

One in six shoppers will spend 25% of budget after December 25When shoppers will complete

majority of shopping Among those who shop after Christmas, reasons are:

82%

Chicago 2016 responses are shown in red‏

78%

42%

36%

21%

Digital influence: Use of online and mixed channels



Online spend pulls ahead in Chicago market for first time

OnlineDesktop/Laptop

Online

Mobile/Smartphone

2017

4%

8%

43%In-store

Online

Tablet

“What percentage of your total holiday budget do you expect to spend...?

50%Of dollars spent

Online

Other% S

pen

din

g

by P

urch

asin

gM

eth

od

10%

32%

Desktop/laptop is still the go-to method for online spending

43%of dollars spent

In store

46% in 2016

50% in 2016

3%

Catalog/Direct Mail




71%

65%

65%

56%

56%

52%

47%

41%

39%

26%

21%

19%

10%

Browse online

Make a purchase

Check/compare prices

Track order status

Read product reviews

Get product information: pricing and specifications

Check product availability in a store or website

Find and use discounts, coupons, sales information

Get store locations

Send/redeem gift cards

Accumulate loyalty points, 'badges,' etc.

Access social networks

Scan product barcodes to find more product information

91% of surveyed Chicago shoppers say they use a desktop or laptop for holiday shopping

“How do you plan to use desktop/laptop to assist you in your holiday shopping?”

The vast majority of Chicago respondents will use a desktop/laptop during their holiday shopping journeyHowever only one out of four respondents will use social media sites to assist in their holiday shopping

Planned desktop/laptop usage



48%

36% I prefer shopping in the physical store rather than online for holiday products (39% in 2016)

I prefer shopping online rather than in the physical store during the holiday season (40% in 2016)

33% It is important that the retailers I shop at have both a store I can visit and an online site (39% in 2016)

“Using a scale of 1 through 5, where 1 means you "Very much disagree" and 5 means you "Very much agree", please state how much you agree with each of the following statements.”

Holiday shopping preferences shifting to online


Only one third of Chicago respondents still prefer shopping in a physical store



71%

60%

60%

59%

58%

58%

56%

50%

41%

34%

32%

29%

27%

27%

Browse online

Track order status

Make a purchase

Check/compare prices

Get store locations

Read product reviews

Check product availability in a store or website

Get product information: pricing and specifications

Find and use discounts, coupons, sales information

Get text messages or exclusive deals from retailers

Access social networks

Accumulate loyalty points, 'badges,' etc.

Send/redeem gift cards

Scan product barcodes to find more product information

“How do you plan to use smartphones to assist you in your holiday shopping?”

Smartphones and tablets are widely used by Chicago respondents

Planned smartphone usage

41% in 2016

Significant increase from 2016 in smartphone and tablet use by respondents for browsing online, making purchases and reading product reviews

48% in 2016

37% in 2016

Chicago respondents’ planned tablet usage follows similar pattern as smartphones.

Retailer policies: Shipping & returns



69%

44%

44%

28%

30%

12%

Free shipping

Easy returns

Price matching

Extended holiday hours (open

early/close late)

Discounts on expedited shipping

Free layaway

The majority of surveyed Chicago shoppers plan to take advantage of free shipping

Chicago respondents say they will take advantage of…

“In general, what retail offerings will you take advantage of when spending this holiday season?” “What percentage of your total holiday purchases will be influenced by any coupons and promotional offers that you receive?”

Other preferred retailer policies include easy returns and price matching



More important…

Fast Shipping

14%

Free Shipping

86%

Perception of timeframe

100%

98%

89%

41%

11%

4%

Same day delivery

Next day delivery

Delivery within 2 days

Delivery within 3-4 days

Delivery within 5-7 days

Delivery within 1-2 weeks

The vast majority (89%) of Chicago respondents believe fast shipping means delivery within 2 days compared to only 53% in 2016

Free shipping is more important than fast shipping

“When you are shopping online, which of these two promises below would be more important to you?” “Which of the following would you consider to be ‘fast shipping’ and which would you not consider to be ‘fast shipping’?”



$5.40

$3.80

$1.70$0.80

On average, would pay an extra…

% respondents who would pay nothing extra

29% 34% 67% 86%

Think they could order sometime after December 17th and still get

free shipping

64%

Most expect fast shipping but are only willing to pay a few dollars for same or next day delivery

Chicago respondents’ willingness to pay for shipping remains low

“How much extra, might you be willing to pay above and beyond regular shipping costs to receive a standard-sized gift package (price defined as $50-$100 US) within the shipping timeframes below?”“What is the latest day you think you can order gifts this year and still receive them by December 24th, under two types of shipping below? Assume a standard sized package.”

$5.60 national average

$3.80 national average

$1.60 national average $0.60 nat. avg.

2017:



44% Likely to buy online and pick-up in store

59%

44%

31%

29%

18%

17%

I can save on shipping charges

I can get the item faster

I can shop for other items on the same trip

I can see the product first before I accept

Worried about shipping damage

Worried about theft or loss during shipping

“How likely will you be this holiday season to buy a product online and then instead of having it shipped to you, you will go to the store to pick up the item?”“Why are you likely to buy online but pick up at the store?”

Savings and speed compel Chicago shoppers to pick up items in store

51%Likely to go to store first to look for an item then search online for best price and purchase online (56% in 2016)

50% in 2016

65%Likely to look at items online, then go to store to see item, then make purchase at the store (66% in 2016)




66%

62%

52%

35%

29%

23%

9%

Can return item to any store, regardless ofpurchase location

Has refund options other than store credit

Accepts longer return window (30-90days)

No receipt required

Accepts longer return window (At least 30days)

Allow returns with scan of identification(e.g., loyalty card or credit card)

Returns policy is not important

Most desirable return policies are returns to any store, generous refund options and long return windows

“When holiday shopping in either an online or a physical store, which of these return policies are most important to you?”

Chicago respondents ranked their top three return policies

Return policy most important to Chicago respondents is “has refund options other than store credit.”



46% I know things will eventually go on sale so I only buy sale items when holiday shopping (44% in 2016)

Chicago respondents continue to seek out opportunities to save

“Using a scale of 1 through 5, where 1 means you "Very much disagree" and 5 means you "Very much agree", please state how much you agree with each of the following statements.”“What percentage of your total holiday purchases will be influenced by any coupons and promotional offers that you receive?”

42% I don’t rely on Cyber Monday shopping as much as I used to for the holiday season (51% in 2016)

80% of Chicago respondents will be influenced by coupons/promotional offers with women (87%) being more influenced compared to men (72%).

50% I don’t rely on Black Friday as much as I used to (54% in 2016)

44% I wait for holiday sales to buy other larger or big ticket items for myself or household (32% in 2016)


Shopping by age, income & education level



Higher income Chicago shopper segments ($100K+) are expected to spend double the market average

14%21%

11%4%

62%

66%

64%

54%

23%11%

25%

41%

Overall <$50K $50K-$99K $100K+

Prefer not to answer

Graduate-Professional degree

Four-year degree

High school or less

Average holiday

spend $1,220 $536 $1,192 $2,429

Education level of respondents by household income group (%) and anticipated 2017 holiday spend

Average holiday spend for respondents expected to increase 8% from $1,125 in 2016 to $1,220 in 2017



“Experiences” as holiday purchases are the future in Chicago

29%

41%

26%32%

16%

38%

36%

37%37%

43%

17%8%

18% 15%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Overall 18-34 35-44 45-54 55+

Agree Neutral Disagree

“I plan to host or attend more holiday events with friends and/or family than participate in traditional gift exchange”

Younger respondents prefer gifting experiences and hosting/attending holiday events compared to older respondents who still prefer traditional gifts

26%33% 29% 25%

19%

41%41%

36% 45%

42%

32%26%

35% 30%39%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Overall 18-34 35-44 45-54 55+

Agree Neutral Disagree

“I prefer to buy gifts that are an experience (e.g., concert/show, vacation,

restaurant, etc.) for the recipient”



Spending also varies with age, with Chicago respondents >55 years of age expected to spend the most

$759

$1,465

$994

$1,722

$1,220

18-34 35-44 45-54 55+ Overall

Holiday season spending by age group Holiday season spending by gender

$985

$1,470

$1,220

Female Male Overall

According to Chicago respondents, males are expected to spend 50% more than females during the holiday season.64%



Males average 5.6 shopping trips vs 7.5 for females

Chicago respondents average 6.6 shopping trips during the 2017 season compared to 7.5 during the 2016 season

7.3

6.3

5.7

6.6

<$50K $50K-$99K $100K+ Overall

Average shopping trips by income

6.7

7.97.5

5.0

6.6

18-34 35-44 45-54 55+ Overall

Average shopping trips by age

“How many individual shopping trips do you expect to take when purchasing holiday gifts over the next several months?”



53% 53% 54%

41%40% 41% 41%

49%

7% 6% 5%

10%

18-34 35-44 45-54 55+

Percentage of budget spend by age group

An increase from 46% in 2016

Chicago shoppers expect to spend half of their budget online

Online

50%In-store

43%

Others*

7%

Percentage of total holiday budget

*Others include Catalogue or direct mail promotion

51%48% 50%

40%

47%43%

9%5% 7%

<$50K $50K-$99K $100K+

Percentage of budget spend online by

household income

Online In-store Other

“What percentage of your total holiday budget do you expect to spend (online vs. in-store vs. other)?”



61%

59%

63%

64%

Overall High school or

less

Four-year

degree

Graduate-

Professional

degree

Customers performing online research first before purchase

Spend, device usage and web research increase with education level

High school or less 45% 26%

Four-year degree 54% 38%

Graduate-Professional degree

64% 44%

Planned device usage for holiday shopping

1,220

838

1,135

1,985

Overall High school or

less

Four-year

degree

Graduate-

Professional

degree

Average holiday spend ($)

Chicago respondents with graduate/professional degrees spend 63% more on average and research many to all products before purchasing at a higher rate (64% vs. 61%)

Copyright © 2017 Deloitte Development LLC. All rights reserved. 362017 Deloitte holiday retail study – Chicago results

About the survey

This survey was developed by Deloitte and conducted online by an independent research company between September 6-18, 2017.

It polled a national sample of 5,038 consumers (428 in the Chicago area) and has a margin of error for the entire sample of plus or minus one to two percentage points.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/aboutfor a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Copyright © 2017 Deloitte Development LLC. All rights reserved.

http://www.deloitte.com/us/about

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