St. Thomas’ 15th Annual Survey Finds Twin Cities Holiday Shoppers Plan to Spend Highest Amount Yet

Researchers predict $918 in household holiday spending, up 8 percent
from last year

MINNEAPOLIS & ST. PAUL, Minn.–(BUSINESS WIRE)–The spirit of holiday giving is alive and well in the Twin Cities,
according to research conducted by marketing professors at the
University of St. Thomas.

Metro-region shoppers are planning to spend $918 per household this
holiday season. That’s the highest amount since the St. Thomas Holiday
Sentiment Survey began 15 years ago; it’s up $68, or 8 percent, over
last year.

The annual survey is conducted in late October and early November and
provides data on Twin Cities holiday shopping trends. The survey
measures the intent of Twin Cities shoppers: how much they think
they will spend for holiday gifts, what they will spend it on and where
they will spend it.

The research is conducted by Dr. Lorman Lundsten, Dr. Sandra Rathod and
Jonathan Seltzer at St. Thomas’ Opus College of Business.

When shoppers were asked in general terms if they’d spend more or less,
their answers were slightly less optimistic than a year ago. This year,
15 percent said they would spend more, while last year, it was 18
percent. This year, 25 percent said they would spend less, while last
year, it was 22 percent. And this year, 61 percent said they’d spend
about the same, which is close to last year’s 59 percent.

It might seem unusual to see that this year’s household dollar amount is
up 8 percent while the spending-intent comments are slightly less
optimistic. The professors note that the slight changes in the
spending-intent comments fall within the survey’s margin of error.

“There were no big surprises in our findings,” Rathod said. “It is clear
that Twin Cities shoppers are optimistic and their responses generally
reflect national surveys and projections for 2016.”

Deloitte & Touche is predicting a 3.6 to 4 percent increase in holiday
spending, the National Retail Federation is predicting 3.6 percent, the
International Council of Shopping Centers is predicting 3.3 percent and
PwC U.S. is predicting 10 percent.

“After hitting something of a plateau last year, I think the Twin
Cities’ numbers for 2016 are pointing north to a more optimistic
outlook,” Lundsten said.

Based on survey responses from greater Minneapolis-St. Paul metro-area
residents, the St. Thomas professors predict that metro-region holiday
shoppers will cumulatively spend $1.24 billion this year, up 9 percent
from last year’s $1.14 billion. The prediction is based on the
per-household spending increase combined with an increase in the
metro-area population of about 1 percent.

Survey respondents said they will have completed 25 percent of their
shopping by November 1 and predicted they would have 59 percent of their
shopping wrapped up by December 1. That is more than last year, when
respondents said they were 19 percent done by November 1 and 52 percent
by December 1.

“While there is no snow to put us in a holiday mood, our unusually warm
fall might be making it easier for shoppers to get to the stores and
malls,” Seltzer said.

The St. Thomas professors who conducted the study emphasize that actual
spending might be different because shoppers could spend more or less
than they planned once they get into the stores or online.

A peek under the tree

What will Twin Cities shoppers buy with their $918? The professors
created an index to analyze the relative popularity of 14 gift
categories. It sheds light on the “what’s hot” question and allows
year-to-year comparisons.

Gift certificates remained the top pick again this year, although there
were some changes in the order of popularity. A category called travel
and events, which includes plays and shows, moved from sixth place last
year to second place this year. Two other categories with notable
changes are jewelry, which moved down from ninth place last year to
thirteenth this year, and computer-related gifts, which moved up from
thirteenth last year to eighth this year.

Three somewhat related categories – cell phones, consumer electronics
and video games – are all near the bottom of the list.

Here’s how this year’s survey respondents ranked their gift choices,
with the most popular listed at the top:

 
1. Gift certificates (last year 1)
2. Travel and events (including plays and shows) (last year 6)
3. Cash (last year 2)
4. Clothing/accessories (last year 4)
5. Books (last year 3)
6. Entertainment products (recorded music and movies) (last year 5)
7. Toys and hobbies (last year 7)
8. Computer-related (last year 13)
9. Sporting goods (last year 8)
10. Cell or mobile phones (last year 10)
11. Consumer electronics (last year 12)
12. Furniture/furnishings (last year 11)
13. Jewelry (last year 9)
14. Video game-related (last year 14)
 

Where they spend

For the past 15 years, the survey asked shoppers where they plan to
spend their money. In 2002, respondents said they would spend:

  • 51 percent of their budget at shopping malls or downtowns
  • 32 percent at non-mall stores
  • 7 percent via the internet
  • 9 percent in a category that combines catalogs, television ads and
    phone sales

In 2016, respondents said they would spend:

  • 40 percent of their budget at shopping malls or downtowns
  • 17 percent at non-mall stores
  • 39 percent via the internet
  • 5 percent in a category that combines catalogs, television ads and
    phone sales

“Over the past 15 years, internet shopping increased steadily at the
expense of the other categories,” Lundsten said. “But this year, we saw
a leveling off or plateau. Last year and this year, both the malls and
the internet received between 38.5 percent and 39.6 percent of the
shopping dollar.”

To find out what kind of internet sites are most popular with shoppers,
researchers asked respondents to indicate what portion of their internet
spending would be done on four kinds of online sites:

  • “Internet only” sites, such as Amazon, received 43 percent (same as
    last year)
  • “Bricks and clicks” sites, operated by stores such as Target, received
    35 percent (40 percent last year)
  • “Broker-facilitator” sites, such as eBay, received 4 percent (same as
    last year)
  • “Deals” sites, such as Groupon, received 5 percent (3 percent last
    year)

Again this year, respondents were asked to list two stores and two
websites where they planned to shop.

In the store category, the five most popular, in order, were Target,
Macy’s, Kohl’s, Herberger’s and Best Buy.

In the website category, the five most popular were Amazon, Target,
eBay, Macy’s and Best Buy.

Amazon was by far the most popular website; it was mentioned 11 times
more often than second-place Target.

Most-popular malls and shopping areas

Which of the region’s 16 enclosed malls, outdoor shopping centers and
downtowns are going to attract the most shoppers?

The researchers approached that question from two perspectives: first,
which mall in the region are consumers planning to visit at least
once
for holiday shopping; second, which mall are they planning to
shop at most for the holidays? The results are not the same.

When asked which malls or downtowns they planned to visit at least
once
for their holiday shopping, survey respondents listed, from
most-popular to least-popular (note: use caution when comparing this
year’s numerical rank to last year’s numerical rank because last year
there were some ties and this year there are none):

 
1. Mall of America (last year 1)
2. Rosedale (last year 2)
3. Southdale (last year 3)
4. Ridgedale (last year 5)
5. Galleria (last year 8)
6. Burnsville (last year 3)
7. Maplewood (last year 7)
8. Albertville Outlet Center (last year 10)
9. Arbor Lakes Area (last year 7)
10. Downtown Minneapolis (last year 9)
11. Woodbury Lakes Area (last year 8)
12. Eden Prairie (last year 4)
13. Riverdale Area (last year 7)
14. Northtown (last year 11)
15. Premium Outlets of Eagan (last year 6)
16. Downtown St. Paul (last year 12)
 

The Mall of America, Rosedale and Southdale have held these
one-two-three rankings for the past seven years, as well as 15 years
ago, when the survey began. The Mall of America has been the top,
shop-at-least-once-for-the-holidays mall for all 15 years with the
exception of 2004-2006 when Rosedale was No. 1.

When asked where they planned to do most of their holiday
shopping this year, respondents listed, in order (note: again use
caution when comparing this year’s numerical rank to last year’s
numerical rank because last year there were some ties and this year
there are none):

 
1. Mall of America (last year 2)
2. Ridgedale (last year 5)
3. Burnsville (last year 6)
4. Maplewood (last year 6)
5. Rosedale (last year 1)
6. Southdale (last year 4)
7. Woodbury Lakes area (last year 7)
8. Eden Prairie (last year 3)
9. Riverdale area (last year 9)
10. Premium Outlets of Eagan (last year 10)
11. Northtown (last year 11)
12. Arbor Lakes area (last year 8)
13. Downtown Minneapolis (last year 11)
14. Albertville Outlet Center (last year 12)
15. Downtown St. Paul (last year 14)
16. Galleria (last year 13)
 

“It has been interesting to watch the evolution of our shopping malls,”
Lundsten said. “We started with the big ‘-dale’ malls, like Rosedale and
Southdale. Then we started seeing some new locations, like Woodbury
Lakes and Ridgedale, stepping up and competing with the big, original
shopping sites.”

2016 bonus questions

In addition to the same survey questions the St. Thomas professors ask
each year, they added some new ones for 2016: one about the Macy’s
department store in downtown Minneapolis, and another about how much
shoppers plan to spend after Christmas.

Noting in the survey that Macy’s is closing some of its stores, the
survey asked if closing the downtown Minneapolis Macy’s would affect a
shopper’s behavior. Eighty-three percent said they didn’t expect it
would change their shopping habits if the large downtown store closed.
Eight percent said they’d probably do the same amount of shopping at
Macy’s, but at a suburban location.

On the question related to post-holiday shopping, respondents said that
of every $100 they planned to spend on holiday gifts before Christmas,
they would spend an additional $15 after Christmas. Based on the
predicted household spend of $918, that would mean an additional 15
percent, or $135, would be spent after December 25.

“There are changes in holiday shopping patterns,” Seltzer said. “It does
not end on Christmas Day. In addition to the gifts that are returned for
refunds or exchanged for something else, there are all the very popular
cards people receive and the post-holiday sales where retailers are
clearing shelves to get ready for spring merchandise.”

The researchers

Lundsten, Rathod and Seltzer are members of the Opus College of Business
faculty.

Lundsten
is a professor emeritus of marketing who taught marketing research and
strategy. He holds a doctorate from the University of Michigan.

Rathod
is the Opus College of Business Distinguished Service Professor of
Marketing. She teaches marketing strategy, consumer behavior, market
research and applied business research. She holds a Ph.D. in consumer
behavior from Purdue University.

Seltzer
teaches international marketing and distribution channels. A former vice
president of industry and government relations at Supervalu Inc., he
holds an MBA from the University of Chicago.

The Institute for Retailing Excellence, part of the Opus College of
Business, conducts research and offers educational programs for those
who work in retailing.

Survey method

This year’s holiday spending survey included 304 online responses from
households in the 13-county Minneapolis-St. Paul Metropolitan
Statistical Area, which includes two counties in western Wisconsin. The
respondents reflect the demographics of the area as well as those who
responded to previous holiday spending surveys.

Contacts

Opus College of Business
Jonathan Seltzer, 651-962-5472
Cell
952-926-4602
selt9207@stthomas.edu
or
PadillaCRT
Kate
Bissen, 612-455-1793
Cell 612-968-6798
Kate.Bissen@PadillaCRT.com
or
St.
Thomas Media Relations
Jim Winterer, 651-962-6404
Cell
651-308-8686
jcwinterer@stthomas.edu