It’s a supercharged moment in the U.S.—and it’s coming off a year in which consumer sentiment has been mixed. Even so, consumer confidence has risen to its highest point since 2021, and consumers are ready for this holiday season!
Online sales are expected to rise 9.5% YoY, the highest pace seen in the past two years. That said, ecommerce still reflects a landscape shaped by cautious consumer spending. In order to distinguish themselves, brands need to deliver strategic campaign timing and a readiness to experiment with channels.
This holiday season it is more crucial than ever to focus on the fundamentals of meeting consumer expectations regarding deals, delivery, value, and payment options.
CONSUMER & SHOPPING TRENDS
Even as sales brighten, price sensitivity will persist:
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- 64% of shoppers say they plan to spend as little as possible and 41% are setting a budget for holiday purchases—many will look to stretch those budgets with an eye on deals and discounts.
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Buy Now, Pay Later is growing in popularity as consumers increase their reliance on credit and flexible payment options to support spending. Over 20% of holiday shoppers intend to use these services for holiday purchases—and this figure exceeds 25% for Gen Z and Millennial shoppers.
A focus on quality is at the forefront: 77% of shoppers will try to find unique or meaningful gifts and 65% are prioritizing their spending on big ticket items such as jewelry or electronics.
Digital tools will play a new role this season: 61% of consumers report that digital tools, including AI, play an important tool in organizing their holiday shopping.
THE STELLA (DIGITAL) SCOOP: LET’S PREP YOUR BRAND!
Plan early and get personal. Some consumers still wait for last-minute shopping—but 67% are eager to get their shopping done quickly. Differentiate your brand with personalized offers that resonate with each customer’s needs.
Cut through the noise and clutter: adopting a personalized strategy will help offers stand out amidst the competition and enable consumers to recognize the unique value behind them, making shopping decisions easy and straightforward.
Get personalized, be data-driven: brands should customize their deals by leveraging first party data and individual buying behaviors. Effectively leveraging this data will help distinguish offers amid the holiday noise, encouraging shoppers to engage as the relevance of the offer captures their interest.
Optimize the omnichannel experience. Brands and retailers should promote gift offers across various channels. In-store should lean into signage and dedicated displays, while digital channels should highlight key promotions and activate influencer marketing for connection, especially with younger consumers.
Leverage new technology to promote discovery. Consumers are always seeking fresh tools and formats such as AR, VR, and AI. AI will continue to impact retail as a whole and the gifting experience specifically. There are opportunities for retailers to leverage this technology to provide a curated selection of recommendations based on the occasion, budget, or recipient, enhancing the entire experience.
A (QUICK) GUIDE TO BUSINESS-MOVING CHANNELS:
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- Consider affiliate marketing for cost-effective reach. Expand your affiliate partnerships by engaging with influencers, coupon sites, cashback platforms, and content publishers to reach different audience segments. Remember that while affiliate marketing is powerful, it works best when supported by other channels like media and search, and when approached as a full funnel channel.
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- Overall, Amazon remains the top choice for online shoppers with 65% of consumers beginning their shopping journey on the platform. This year, Amazon intends to launch a new section on its platform dedicated to affordable products shipped directly from sellers in China, positioning itself to compete more effectively with rivals like Temu and Shein. Amazon has also developed a partnership with TikTok as users can now discover and purchase Amazon products directly with TikTok.
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- Gen Z is set to drive the growth of social commerce with over 40% stating that they are likely to purchase gifts through social media, which is double the rate of the general shopping population.
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- TikTok Shop is gearing up to compete with major ecommerce players. The platform gained significant attention during major sales events in the 2023 holiday season and leading up to Prime Day in July 2024. Additionally, TikTok is heavily investing in livestream shopping—and also recently launched TikTok Search Ads!
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Last, but certainly not least, focus on retention beyond the holidays. The goal is not just about getting the sale in December, it’s about creating a fan of your brand who returns over and over again. Stay tuned—we’ll have content coming on how to retain customers after the season ends!
Sources: Mintel: “State of Retail & eCommerce, U.S.,” April 2024, “Holiday Marketing Opportunities,” 2024, “Winter Holiday Shopping, U.S.,” June 2024, eMarketer: “Marketing Strategies for a Shortened 2024 Holiday Shopping Season,” 16 September 2024, “U.S. Holiday Shopping 2024,”
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