With the holiday season right around the corner, consumers and brands alike have started planning early amid the challenges raised by the current inflationary environment. Not so surprisingly, this seasonal period is an important opportunity for retailers and DTC brands to win customers over. But what are consumers seeking and how should you enhance your holiday marketing strategy? We gathered the latest insights into this year festive shopping so you don’t have to. And we are sharing 6 tips to level up your marketing this holiday season in a creative way to stand out from the competition.
The State of Holiday Shopping
According to Deloitte’s latest analysis, holiday sales are expected to reach $1.47 Trillion US dollars, growing by up to 6% and representing an increase of 15% compared to last year festive season. In terms of distribution channel, e-commerce is leading, with e-commerce sales forecast to grow by up to 14.3%, recording $264 billion dollars in revenue.
Consumer-wise, Holiday Shopping has started earlier, with holiday shoppers starting their festive shopping earlier in October in contrast to previous years and taking advantage of the promotional days. 49% plan to shop during Thanksgiving week, 29% on Black Friday and 27% favorite Cyber Monday.
Brands across Europe, UK and US are getting ready for the holiday season too, starting with Black Friday deals, Cyber Monday discounts, Christmas and NYE festive treats, and Boxing Day sales. Brands have started leveraging the promotion season to meet customer needs, and 60% of retailers will start holiday promotions earlier by 2 weeks. Big retailers like Amazon and Target have been launching offers for the sales period including the Festive season, and have begun to recruit additional associates to provide agile customer support.
The reasons behind these changes and shifts in both consumer and brand behavior are attributed to the pressure of inflation on consumers’ budgets, and the declining demand for goods in contrast with the lower spending patterns during the pandemic.
6 Key Insights You Need To Know
High Customer Excitement for the holiday
According to McKinsey, 55% of consumers are most excited about the festive shopping this year and are ready to spend on both gifts and personal purchases as the pandemic led to an increase in their savings. Higher excitement about the holiday can be seen across all ages and income groups, with younger generations like Gen-Z and Millennials being the most excited for this festive shopping season.
Eager to spend
This holiday season, customers are more eager to purchase: 74% of consumers admit they plan to spend more or the same on their festive purchases than last year. Surprisingly, 40% intend to splurge this season. A higher intention to buy additional items is seen among younger generations, specifically Gen-Z (60%) and Millennials. Aside from shopping for products, consumers are increasingly seeking experiences, with a 7% rise in shifting spending from purchases to experiences according to Deloitte.
And while they’re excited about the festive shopping and eager to shop, 55% of consumers started shopping earlier in October for the Festive season, even before Black Friday sales. This is to avoid high prices due to increased demand near the holiday and inflationary prices – 72% of them expect higher prices -, but also due to concern regarding inflation, product availability, and shipping delays. The majority plan to do their festive shopping in October and November, with only 11% in December.
53% of consumer purchases this festive season are driven by value. Price sensitive and cautious with their spending due to the economic uncertainty and high inflation, consumers are searching for value for money in the following ways:
- seeking bargains and coupons: they are looking for bargains when it comes to gifts with 32% buying resale and 44% seeking sales coupons
- switching retailers or shopping online for a more affordable price: 43% of customers are switching retailers and shopping online to buy an item at a lower price point. Additionally, 74% of consumers across age and income groups are trading down, prioritizing spending on essential goods and delaying the purchase of discretionary items
- purchasing during promotions even for gifts for their friends and family: shopping priorities aside essentials such as food and beverage, include gift cards, apparel and accessories, toys and games
Influenced by social media and peers
34% of consumers plan to utilize social media for holiday shopping. When looking for gift inspiration, the majority let their family and friends guide them, with 35% following their wish lists or previous year’s purchases. Factors driving their purchase decision are users and influencers product recommendations, reviews and tutorials across platforms, with 25% of holiday shoppers considering reviews and unboxing videos by influencers, almost a triple increase from 9% last year. Additional sources of inspiration and research include social platforms such as Instagram, TikTok, and YouTube, brand website and promotional emails, as well as internet search.
Prefer hybrid shopping and fast shipping
When it comes to purchasing channels, consumers prefer hybrid: the opportunity to shop in a retail store and online shop at their own convenience. While online shopping is leading with smartphone shopping growing at a faster pace, retail shopping is forecast to grow to 35%. As customers seek experiences and are eager to shop in-store, this creates opportunities for brands to deliver meaningful retail experiences to drive traffic and sales. Consumers are also planning to experiment and engage in social shopping via social media. Shipping is also an important aspect: 52% of consumers expect same-day or next-day delivery, with 15% preferring fast, 2-days shipping over free shipping. While free shopping is mostly preferred, 26% of them are willing to pay for shipping if it guarantees expedite delivery.
Do you need help with your influencer marketing strategy this holiday season? Get in touch. Our experts will be happy to assist you.