If It's The Holiday's It's Matching PJs Season!
The holiday season is here, with decorations going up and sales starting, but while retailers are hoping for a little cheer, the economic outlook suggests it might be slightly less than merry for some. Yes, U.S. consumers are feeling better about their finances, but they’re also dealing with higher levels of credit card debt. So, how will this impact holiday shopping trends?
Well, according to Deloitte, holiday retail sales are expected to grow between 2.3% and 3.3%, reaching somewhere around $1.58 to $1.59 trillion. That’s still an increase, but not quite as robust as last year’s 4.3% growth. Bain & Company is also predicting a modest rise of 3%.
Even e-commerce, which has been on a major surge in recent years, is slowing down. Deloitte anticipates a 7% to 9% increase this year, totaling up to $294 billion. While this marks the smallest gain in six years, it’s closer to pre-pandemic norms—letting retailers move past the massive pandemic-driven sales spikes.
What’s Behind the Numbers?
With cooling inflation, there’s a double-edged sword: consumers have more purchasing power, but retail sales growth will likely be more modest. Adding to the challenge, credit card debt is climbing, with balances now 5.8% higher than a year ago, reaching $1.14 trillion. Many shoppers have already dipped into their savings, which could lead to more cautious spending. What can brands do to stand out?
Connecting with Holiday Shoppers: What Retailers Need to Know
Despite economic uncertainty, the holiday season remains a prime time to engage shoppers. But how do you connect with today’s more cautious consumers? Let’s dive into some key insights on holiday shopper behavior:
Buying Styles:
Many holiday shoppers are considered shopping influentials--the go-to people for advice on what to buy, often taking pride in being the first among their friends to try new products. They love to share their opinions, frequently posting reviews and ratings online, and for many, shopping is a form of relaxation; in fact, they score a 163 index for believing shopping is a great way to unwind. Impulse purchasers also remain a key group (hello Instagram shoppers), often disregarding economic caution, with many holiday shoppers identifying as spenders rather than savers.
- In 2025, social commerce will continue to grow as brands tap into vast user bases and advance targeting capabilities. With 42% of businesses using Instagram's shopping features seeing significant sales increases, social commerce is solidifying its place as a key revenue driver.
Source: MRI Simmons, Spring 2024
Tactics to Capture the 2024 Holiday Shopper
This season, retailers will need a bag full of digital solutions to get creative and maximize engagement and sales. Here are a few tips:
- Look-Alike Shoppers: Use AI-driven targeting to find and engage customers who are similar to your existing ones. This approach, like Media Now’s AIM targeting, helps keep your prospect funnel full throughout the season by identifying shoppers likely to respond well to your brand.
- In-Store Visitors: Leverage location-based targeting to capture holiday shoppers right where they are—at specific retail locations. You can use this tactic to promote products available at those stores or even drive customers to visit a specific retailer.
- Drive Engagement: Utilize interactive, high-impact ad units to keep shoppers engaged. This can be especially effective before they make final purchase decisions, helping you influence their choices at the most critical point in the buying journey.
With these strategies, retailers can better connect with holiday shoppers, even in a season where consumers are looking to stretch their budgets a little further. These tactics are the gift that keeps on giving, helping you maximize sales during the holiday rush and setting the stage for success in the year ahead—kind of like wearing those matching PJs year after year.
