The holidays often bring a lot of noise in the advertising world. Markets are oversaturated, costs are higher, and inventory is snatched up faster. But when it comes to holiday shopping, the recent shifts in consumer mindset and behavior are particularly interesting. Brands will often keep doing what has worked for them historically, but not keeping up with the trends could leave them behind in Q4.
Here are our retail holiday trends and predictions for 2023:
The holiday season is no longer exclusive to the last two months of the year.
In 2022, holiday shopping began earlier in the year, likely attributed to promotions occurring earlier, such as the Amazon Prime Early Access sale and Black Friday in July for big retailers like Best Buy and Macy’s. According to a global survey from Google, shoppers had wrapped up 21% of their holiday shopping by mid-October.
Consumers are expected to hit the stores in person again, three years after COVID forced a rise in online shopping.
According to eMarketer, brick-and-mortar holiday spending reached $1 trillion for the first time in 2022, a significant gain from 2021. These foot-traffic studies illustrated a rebound around Thanksgiving last year (a 17% increase YoY), with Black Friday in-person shopping growing exponentially to almost 73 million people.
While eCommerce sales will continue to grow, all signs point to brick-and-mortar gains reverting back to pre-pandemic levels. Even so, convenience is still crucial to creating a seamless shopping experience for consumers. Brands and retailers looking to boost in-store sales should consider personalized perks for their customers, such as flexible payment or pickup options.
Given the economic uncertainty, shoppers are more mindful of their spending.
Financial experts indicate a recession could potentially hit the U.S. in the next 12 months, but reports are fairly split in terms of both timing and overall impact. Last year, shoppers were seeking out the best deals in several categories (especially toys and electronics), and there was a notable uptick in online discounts last year.
Price continues to be a top factor in purchasing decisions.
While discounts are a simple way for brands to tap into the consumer mindset, there’s more opportunity beyond lower prices. Creating a smooth overall shopping experience could make a big impact on both sales and brand loyalty. Holiday messaging should emphasize personalization and value, whether it’s a lower price on a recently viewed item, fast and free shipping, or special holiday product bundles.
Additionally, sales ads continue to be the driving force behind both awareness levels and purchases, according to eMarketer.
Don’t underestimate bold tactics.
In line with overall marketing trends, some retailers are leaning into AI technology to serve potential customers with more personalized ads. Others are testing shoppable video ads across CTV and social media — a clever tactic to reach younger generations, who often start shopping searches on social media instead of search engines. Additionally, prioritize tactics that lead to product discovery, instead of only focusing on sales. This balance is likely to lead to a more organic brand connection, which is especially crucial for reaching Gen-Z.
With that said, there are often barriers to trendy marketing tactics, like proving the return on investment and incrementality. Measurement and transparency are the keys to keeping brands invested in retail media. Consider layering on tried and true methods to create actionable learnings, like a loyalty program to provide visibility into what consumers search for and purchase, for instance. This data could also be leveraged to create more personalized media journeys for shoppers.
How can brands and retailers prepare and stand out?
It’s important to grab attention early and create an always-on marketing approach to maintain that attention. This way, regardless of how early someone begins to shop, if they’re in-store or online, or seeking out the best deals, your brand is discoverable and, hopefully, top of mind. Without multi-million dollar budgets, full market saturation can be difficult to achieve at scale, so consider a more creative or localized approach. For example, identifying key markets and doing in-store takeovers, or partnering with retailers for a unique, high-impact digital play is more likely to catch a consumer’s eye.
Embracing the rise of brick-and-mortar popularity, without sacrificing a digital presence, will be another key strategy. Leveraging an omnichannel approach to bridge the gap in both online and offline consumer behavior will help set brands apart during one of the busiest times of the year.
“One retailer that continues to make leaps and bounds within the advertising industry is Walmart Connect. Through Walmart’s robust advertising suite, brands and advertisers are able to leverage Walmart’s closed-loop marketing solutions to drive both on-site and in-store traffic with digital and OOH media. This creates a more powerful and robust advertising strategy that keeps brands top of mind while consumers kick off their holiday shopping.” – Josh Glenn, Vice President of Strategy & Client Services at Macarta.
