Step 1 - Understanding the mindset of 2022’s holiday shoppers
Klarna (flexi-payment provider) have released a global report on holiday shopping across the globe. It suggested that holiday shopping was still going ahead in full force, with circa 50-60% of consumers planning to spend the same amount as last year. The prospect of spending less vs spending more is then very different per market - for example in the US 40% of consumers said they plan to spend more, vs just 15% in Italy.
With general prices for goods and services increasing significantly since the start of the year, has/will this have an impact on how you shop for the holiday season?
When looking at demographics, reduced spending appears to be higher amongst older generations and women, whereas increased spending is amongst younger generations and men.
Step 2 - Early results we are seeing from around the world
Early indications in the US (via Retaildive.com) suggest that overall holiday spending in 2022 did increase from 2021 by 6.7%. This does appear to differ per holiday spending event - circa 8.4% on thanksgiving, 6.9% on black Friday and Cyber week, and 6.5% during Christmas.
This is mainly driven by inflation though, meaning thanksgiving volumes only rose 0.2%, and Black Friday and Cyber Week volumes dipped by 1.1%, while Christmas and other holiday season volumes declined by 1.6%.
Early indications in the UK highlight there was a surge in shoppers on Boxing Day 2022, when footfall rose 38.8% higher than in 2021 - when shoppers were urged to stay away from the highstreets and opt for online shopping if possible. It's worth noting though that the gap between the end of 2021 and 2022 was at its narrowest on New Year’s Eve, which impacted footfall at only 1.9% higher vs 2022.
Step 3 - How this impacts our media decision making in 2023
- As demand remains, brands should be confident to maintain investment with an always on approach, but look to optimise where possible for efficiency vs making drastic cuts - i.e. trimming budget from channels of lower ROI or reallocating spend to higher margin products within the portfolio based on supply and demand.
- There is no one size fits all approach when it comes to consumer spending, in particular holiday and gifting moments. Identifying the behaviours and needs of the audience segments you are targeting in the market alongside wider category trends is key. Custom research may be required to fill any gaps/deliver real time intel.
- Think omnichannel, understanding the role your owned channels play in a price conscious path to purchase is key for efficiency and real-world insight. It might be that consumers are visiting your instore/website to explore the range, but then head to 3rd parties to find the best deals. Incentivising owned channel engagement therefore is key to maximise profitability vs relying on promotions and discounts.