Haul out the holly: After years of the holiday season being dogged by pandemic restrictions and other disruptions, there’s some indication shoppers are readying their wallets for more spending. That’s to not say financial concerns, including inflation, aren’t top-of-mind. But for marketers, there could also be a chance to complete out the yr on a high note in the event that they can strike a winning tone amid the uncertainty.
Consumers are expected to drop a median of $1,652 this holiday season, a 14% year-over-year increase that surpasses pre-pandemic figures for the first time, in keeping with Deloitte’s 2023 holiday retail survey. Just per week away from the Thanksgiving and Black Friday shopping blitz, the sunny forecasts are likely welcomed by marketers. Still, the pressure to perform well after a turbulent period has created some additional anxiety around brands getting it right, in keeping with David Sant, head of client success at JuiceMedia.IO.
“[There’s] actually a cautiousness … just with all that’s occurring in the world, the economy is slightly bit TBD for some folks,” said Sant. “There’s some added pressure to make Q4 great, because it at all times must be, but this yr has a special, acute focus.”
A goal for a lot of brands in 2023 is finding the right balance between lighthearted sentiment and affordability of their messaging. Meanwhile, others are betting on tech to win digital-first younger audiences. Also observed are shifts in consumer preferences — like a growing desire for in-person shopping — that may lead to some corporations taking things back to the basics.
The gift of value
Consumer sentiment is contributing to marketers’ trepidation. As inflation lingers, three-quarters of shoppers predict higher prices versus last yr, per Deloitte, while savings rates have dwindled and student loan repayments have kicked back in. Similar to last yr, marketers hoping to win shopper dollars won’t only need to return prepared with a relevant value proposition, but additionally to go the extra step by catering to changing customer needs.
“Obviously, inflation continues to be top of mind for a lot of consumers. A big majority of those we surveyed predict higher prices, but they’re not letting that stop how much they’re going to spend,” said Brian McCarthy, a principal in Deloitte’s retail practice. “They’re just moderating their budgets for what they think they can get for those dollars.”
Marketers aiming to attach this yr might want to match the tone of the majority of people that proceed to specific concerns around financial strain. In that sense, messaging has yet to return to the glitz-and-glam tactics of the past, and can more likely echo the dialed-back tone from 2022.
“In terms of the tonality of the creative, I might say it’s probably not as muted because it was last yr, but it surely is unquestionably not as triumphant as we’ve seen in other years where individuals are type of beating their chests,” Sant said.
Emotional appeals are one strategy to engage stressed-out shoppers. Sam’s Club earlier this month unveiled a vacation campaign, made with Arnold Worldwide, that is supposed to advertise togetherness over materialism. Amazon is similarly tugging on the heartstrings with a world “Joy is shared” push that brings together themes of friendship and nostalgia, supported by a version of The Beatles’ “In My Life.”
Trendy technology is providing an assist on some bids at warming hearts. Coca-Cola’s holiday campaign, “The World Needs More Santas,” touts a message that anyone can be Santa through kindness, with a planned element around artificial intelligence as a part of the company’s “Create Real Magic” platform. Meanwhile, Lego is leveraging augmented reality for a transatlantic snowball-throwing contest.
Others are meeting the moment by focusing more squarely on savings. This month, Target launched a seasonal campaign that’s guided by the mantra, “However You Holiday, Do It For Less.” In October, JCPenney revealed a vacation marketing playbook that also revolves around savings opportunities and aligns with the department store’s larger turnaround plan targeting working families and making their dollars stretch further.
With brands expected to emphasise affordability, marketers trying to differentiate from the pack might prioritize purpose and progress on environmental, social and governance (ESG) goals, in keeping with Gartner’s 2023 Holiday Marketing Guide. This approach might be impactful amongst values-driven shoppers, with 38% reporting that their attitude or behavior toward a brand positively modified when their ads were centered around inclusivity, per the report. Nearly half of each Gen Z and millennials said that what a brand stands for aspects into their purchase decision.
In the same vein, during a yr where culture war fallout blindsided brands, Gartner analysts stressed that the season isn’t a time to unveil dedication to a recent cause, but moderately a chance to flex efforts already underway. Brands must also come prepared with an escalation plan in place to deal with any potential backlash.
“I believe all marketers are skeptical of ending up in the headlines this holiday season,” said Kassi Socha, a director analyst for Gartner. “Our biggest advice is holidays, when there’s lots of volume, it’s not the time to start out a recent campaign or put a recent tent pole down and say, ‘This is what we stand for.’ It’s a time to speak progress.”
Time for inspiration
As consumers cross items off their holiday shopping lists, traditional savings windows are gaining a renewed sense of interest from shoppers, with promotional events during Black Friday-Cyber Monday week expected to draw 66% of shoppers versus 49% the yr prior, per Deloitte. Nearly one-third of purchaser budgets might be spent in the last two weeks of November.
“Retailers have been attempting to get shoppers to start out the holiday spending a bit earlier, but this yr, it’s gonna start more in November and more of the spend is gonna be concentrated in November and December,” said McCarthy.
While consumers have indicated that they won’t start their holiday shopping as early this yr as they did in 2022, 19% report shopping year-round for holiday gifts versus 16% last yr, in keeping with Gartner.
The timing of consumer spending has affected when brands activate their campaigns and on which channels, including those running holiday TV ads. Consumers last yr were most definitely to have interaction with TV ads by direct-to-consumer clothing brands the week after Christmas, in keeping with measurement company EDO’s Holiday TV Outcomes report. Meanwhile, malls like Walmart or Kohl’s saw TV ad engagement last yr peak in mid-October when there have been fewer ads, an indication that an earlier start could bear fruit.
“A variety of categories of promoting see high engagement rates of their holiday campaigns after they start in October,” said Kevin Krim, president and CEO of EDO. “They see higher response rates, as measured by people looking for their brand, looking for these products, going to their web sites.”
Social media is gearing up similarly, with 34% of consumers planning to make use of the channel for holiday shopping this yr, Deloitte found. Gen Z consumers are wasting no time in trying to social for gift-giving inspiration, an insight that brands should tap into as they try and drive awareness with the younger generation, in keeping with Imani Albert, associate strategy director for Movers+Shakers.
“It’s necessary to match that Gen Z is talking about [the holidays] earlier, they’re prepping for it earlier, they’re feeling festive earlier, so starting to market earlier in the season is basically necessary to provide people gifting ideas, especially in social,” Albert said.
Among trends for holiday marketing on social this yr, Albert anticipates that gift guides might be popular as Gen Z focuses on intentional gifting versus a one-size-fits-all approach. Accordingly, influencer partnerships might be a often used tactic to attach with consumers on the lookout for advice.
While results thus far have been tepid, Albert can be betting on the newly launched TikTok Shop as a strategy to close the loop on the shopping experience. TikTok continues to be a top platform for Gen Z consumers, and its commerce feature, which officially launched in the U.S. in September, could prove to be an efficient way for brands to supply a full-circle shopping experience.
“We tell our brands, in the event you’re not on TikTok Shop, get on there,” Albert said. “As far as the algorithm goes, it tends to prioritize those posts.”
Make in-store shopping merry
Regarding preferred shopping venues, online-only retailers and mass merchants reign as the preferred formats amongst consumers at 63% and 53%, respectively, in keeping with Deloitte. Those totals match trends observed in 2019, the consultant said. In-store buying has also recovered to pre-pandemic levels, commanding 37% of purchaser budgets in 2023.
Numerous brands this yr try to capitalize on rebounding consumer interest for tactile experiences. JCPenney has created more destinations in-store to advertise larger gifting. Target is bringing back experiential marketing with a Target Wonderland pop-up that may tour several cities, together with upping its deal with brick-and-mortar activations.
A resurgence of in-store shopping is a key opportunity for CMOs to battle the decline of store profitability, Gartner’s report detailed. Brands should enhance IRL experiences with added conveniences like same-day services and curbside pickup and returns, elements that might make a difference in a sea of red-tag clearance sales, in keeping with Gartner’s Socha.
“If we can create some type of pop-up experience or cool in-store shopping experience or strategy to connect with the brand in real life, that’s going to resonate with the consumer,” said Socha. “There’s an appetite to be in a physical place with a brand that there hasn’t been over the previous few years coming out of the pandemic.”
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