Stax Inc. Finds Permanent Shifts in Consumer Shopping Behavior This Holiday Season

BOSTON, Nov. 23, 2010 /PRNewswire/ -- Stax Inc., a global strategy consulting firm, revealed today key trends impacting consumer shopping behavior this holiday season. While consumers remain cautiously optimistic, with spending expected to rise 0.9%, of greater interest is the underlying shifts in consumer behavior reflected in this year's holiday spending.

Leveraging its proprietary in-house consumer insights capabilities, Stax reached out to 1,087 holiday shoppers in early November to build a true market view of consumers' choices and decision drivers. The results of this study, Stax Tracks: Holiday 2010, highlight three trends to watch this season:

• Trend #1: Traditional retailers are at risk of permanently losing customers without a more compelling value proposition. With luxury channels competing on brands and value retailers on price, traditional retailers may find themselves squeezed in the middle.
• Trend #2: The confluence of technology, retailers' emphasis on driving sales at all costs, and the economy has instigated a promotions arm race that makes it harder for retailers to effectively reach consumers.
• Trend #3: While social media and mobility will be important platforms for retailers going forward, value is currently being driven through other, more familiar means such as loyalty programs. Without a call to action, social media will continue to lag loyalty programs in effectiveness. Customers enrolled in traditional loyalty programs outspend social media users by a factor of 10 or more.

"While this holiday season is shaping up to be comparable to last year; it is more critical than ever for retailers to understand their customers," said Sue Sung, Managing Director, Stax Inc. "As this sentiment is unlikely to wane even when the economy recovers, retailers that engage with shoppers in multiple ways, especially in channel choice and loyalty programs, will be most valuable to their consumers. Decisions on what actions to take in order to drive growth will naturally fall out."

The economy clearly has had an impact on consumers' shopping behavior, with 75% expecting to change the way they shop this season. Additional key findings in this Stax report include:

• 213 million adults are expected to spend $480 each on gifts and decorations between Black Friday and Christmas Eve, totaling $103B.
• 142 million shoppers expect to buy at least 1 gift card this holiday season.
• Consumers who shop a retailer via multiple channels (in-store, online, and/or catalog) will spend 37% more than those who only buy via a single channel.

A must-read for retailers, this Stax Inc. survey provides consumer behavior insights that will help companies make better operating decisions both in the short-and-medium term.

About Stax Inc.

Stax Inc. is a global strategy consulting firm with offices in Boston, Chicago, New York, and Colombo, Sri Lanka. Stax provides clients with actionable answers based on deep research and analysis. Founded in 1994, Stax works with clients ranging from the Fortune 500 and ten of the top global LBO firms, to middle market private equity firms and their portfolio companies. Stax applies a nimble, collaborative approach to drive well-informed decisions and tangible results.  Projects include business and market strategy, customer analyses, marketing analytics and commercial due diligence, with targeted engagements around revenue generation, ROI maximization, and M&A. For more information, visit www.stax.com.

SOURCE Stax Inc.