As we find ourselves in mid-October, it’s tempting to dive headfirst into holiday discussions. The concept of an early start to the holiday shopping season has been dubbed the “smearing effect” in a CNN article—a phenomenon caused by national retailers launching their holiday sales campaigns earlier as a strategic response to the pandemic’s uncertainties. Interestingly, data from a survey conducted by Justuno reveals that 17% of consumers plan to shop now, with nearly the same percentage waiting for Black Friday and Cyber Monday. A noteworthy 21% intend to shop in November leading up to Black Friday.
Despite the perception that the holiday season is already upon us, the data says “it’s complicated.” Coresight Research projects only modest single-digit growth in year-end holiday sales compared to 2022. This isn’t entirely unexpected, given factors like impending interest rate hikes, resumption of student loan repayments and record-breaking credit card debt. A CNBC Supply Chain Survey reflects concerns that consumers may cut back on spending this year.
Nonetheless, it’s not at all the time for retailers to hit the brakes or for shoppers to abandon their wish lists. Holiday promotions, deals and discounts have already begun, according to the most recent data provided by The Washington Post, and consumers plan to take advantage. After prioritizing necessities and essentials for so long, there’s plenty of pent-up desire to indulge in gift-giving.
So, what should retailers be considering?
One notable trend is the rebound of in-store shopping. Many of the e-commerce trends that emerged during the pandemic are now unwinding. According to a PricewaterhouseCoopers survey, 43% of respondents plan to increase their online shopping, a drop from the 50% recorded in 2022. Conversely, shopping in physical stores declined from 33% to 23%.
This conflicting data suggests that consumers are making choices based on their preferences for each channel. High delivery costs deter online shoppers, and 41% of respondents in the same survey expressed a longing for the in-store shopping experience.
What might sway the decision-making process? It comes down to experience, connection and core values.
Retailers should consider offering a customer-centric, hyper-personalized experience in their physical spaces, if they haven’t already. Shoppers increasingly want the physical shopping experience to be augmented, facilitated or enriched by digital technologies. Examples include “click and collect,” “scan-and-go,” and immersive digital experiences. But it’s not just about technology; customers also seek knowledgeable and helpful sales associates—real human beings.
According to a Forrester report, emotion is the driving force behind the customer experience. An impressive 83% of those surveyed were more likely to buy from a brand with which they felt an emotional connection. Deeply emotionally connected customers hold more long-term value than those who are merely highly satisfied. One way to achieve brand loyalty is by creating experiences and welcoming spaces that bring people together for authentic engagement.
In a joint survey conducted by McKinsey & Co. and NielsenIQ, consumers have shown a growing concern for sustainability—and they’re backing it up with their wallets. Products making ESG-related claims (Environmental, Social and Governance) have averaged 28% cumulative growth over the past five years, compared to 20% for products that do not. Sustainability’s rise has been largely driven by consumers, particularly Gen Z, and retailers need to catch up.
A recent Harris Poll commissioned by Google Cloud revealed that 82% of shoppers want a brand’s values to align with their own, and three-quarters of those surveyed said they would sever ties with a brand over a values conflict. In addition to savings and convenience, shoppers want to feel ethically aligned with their purchases.
Happy Holidays!
Above all, this time of year is about celebrations, both big and small. While the focus tends to shift towards fourth-quarter revenues, it’s essential not to forget the importance of making time for friends and loved ones and remember those in need. This is also a time to pause, reflect and express gratitude before rushing into a brand-new year.
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