A New Competitive Threat Rears Its Head

One-third of holiday shoppers say they will look beyond US borders

Author: Andria Cheng

November 9, 2017

Consumers have a way to penalize US retailers who don't do a good job creating a differentiated experience. They shop beyond US borders.

According to a 2017 holiday survey of 1,000 US adults conducted by Koski Research for PayPal, one-third of holiday shoppers said they plan to buy a gift from outside of the US either in person or online this holiday.

Two-thirds of the shoppers planning to buy overseas said that they wanted a unique gift or that they were looking for something they can’t find in the US. Another third said they were looking for a deal, according to the study, which was released Thursday.

The survey underscores the growing trend of international cross-border commerce. A UPS study earlier this year found that 47% of US consumers said they made an online purchase from an international retailer, up from 43% last year.

Related Links

Challenge Abroad

For US Retailers, a Competitive Threat from Overseas

But the PayPal data also points up a big problem facing many struggling US department stores and other retailers: Despite an increased push to offer private label and exclusive products, the industry, especially come holiday season, still often falls into the price game because retailers are not offering unique products.

Differentiation has become even more important thanks to the use of social media: Consumers are constantly looking for special looks to show off on their feeds. The social imperative was a driver in Ann Taylor’s recent entry into the online subscription rental space. Surveys have showed that this sector of the market is growing because consumers said they want to look different and unique all the time on social media.

Nearly 60% of girls ages 13 to 16 said they would prefer to receive gifts this holiday that are “Instagram worthy” or “shareable” on social media, according to digital media agency Sweety High’s inaugural 2017 Gen Z Holiday Gifting and Influencer Report, which was also published on Thursday.