Insights

Flat is the New Up Web Buzz Also Suggests Soft Holiday Retail Season
Article

Flat is the New Up Web Buzz Also Suggests Soft Holiday Retail Season

Maya Swedowsky, Associate Research Director, Online Division

Despite increased optimism about the economy, the social media landscape indicates that we are in a similar place to where we were this time last year when it comes to spending; buzz about Christmas and holiday shopping is down 3% year-over-year. This activity is in line with other research at Nielsen relative to retail expectations and consumers’ personal finances that indicate modest spending from a cautious consumer base.

However, consumers are still buzzing about the gifts they’ve already purchased or are planning to buy in the coming weeks. Notably, online discussion focuses largely on offline shopping.

While online shopping has been rising over the last few years, we’re also finding that consumers are using the internet to find the best deals at retail outlets, toy stores and more. So what happens online, doesn’t always stay online in the new economy where deal hunting is driving buzz.

As consumers count down the days to the holiday season, we see two key trends emerging:

  1. Parents are actively buzzing about the must-haves of the season within online communities
  2. Buzz about gift cards is on the rise, largely in response to retailers’ use of gift cards as purchase incentives

Games that buzz

When analyzing the product categories shoppers most frequently discuss online, Nielsen found that kid-friendly video games generated more buzz than even the most buzzed-about toys, largely driven by highly engaged gamers. The November 15 release date for New Super Mario Bros is highly anticipated, catapulting this video game to the head of the pack in terms of buzz. Additional buzz in the gaming world has come from price drop and new model announcements for Playstation 3 and XBOX.

toybuzz

Zhu Zhu the next Tickle Me Elmo?

Buzz supports Toys “R” Us’ “Fabulous 15” predictions for the 2009 holiday season, with Zhu Zhu Pets, Bakugan Brawlers and Transformers Revenge of the Fallen figurines topping the list of the most frequently buzzed about toys.

zhu_buzz

Shoppers deem Zhu Zhu Pets the hot toy of the season as parents swap stories of empty shelves and elevated prices at retailers. An emerging Zhu Zhu market has also sprung up on eBay. Strong buzz on LeapFrog’s educational toys are a holdover from the 2008 holiday season; parents are especially interested in the Leapster and Tag Reader product lines this season.

Gift Cards buzz is on the rise, buoyed by incentive programs

A growing proportion of online conversation focuses on gift cards—including gift cards awarded as purchase incentives (15% growth in buzz year-over-year, September 2008 vs. September 09). Amazon.com and Toys “R” Us have experienced the largest year-over-year growth in buzz about gift cards of the retailers and brands measured.

giftcardbuzz

This increased interest in gift cards is largely driven by retailers bundling gift cards with purchase incentives. Gift card bundles essentially provide shoppers with two sets of gifts: the original purchase and the gift card which can either be given as a gift or used to buy more holiday presents. These incentives tend to generate a sizable amount of discussion online—especially when tied to the gaming category. For example, Amazon.com recently coupled a price break on Wii with a $25 gift card, generating a surge in online conversation about Amazon.

Retailers who do not currently use gift cards to encourage purchases may want to consider taking advantage of this growing opportunity during the holiday season.

Related: Watch Nielsen’s Ken Cassar Discuss Online Holiday Sales CNBC