Remember when the holiday shopping season began on Black Friday with a surge in consumer spending at brick-and-mortar stores and websites that peaked near Christmas Day? Those days are long gone. It seems like no one can really predict what constitutes the “holiday shopping season.” In 2020 and 2021, the specter of the COVID-19 pandemic radically altered consumers’ buying behaviors. Here is how the 2022 season is unfolding:
Nearly 40 percent of consumers began searching for gift ideas as early as May according to Google partly because supply chain shortages had conditioned them to do their homework ahead of time to ensure that their holiday treasures would be in stock. This is in line with recent trends.
Retailers responded by unveiling their holiday offers earlier than ever. For example, Walmart shared its annual top toy list in August, which was about one month earlier than in 2021. Amazon used not one but two Prime Days – in July and October – to position hot deals as quasi Black Friday events. This, too, was in line with recent trends, especially when retailers in 2020 began breaking up Black Friday type sales into smaller events earlier in the year at a time when shoppers were reluctant to visit crowded physical stores en masse.
Consumers are spending carefully during inflationary times. A Gartner survey of 306 consumers during July found that more than a fourth (28 percent) expect to spend less this holiday season while 10 percent will spend more this year than in years prior. According to Adobe, online shopping will grow at its slowest pace since 2015 (2.5 percent year over year).
Cost-conscious consumers will look carefully for deals. As reported in CNN, executives at stores such as Best Buy, Gap, and Ulta expect that consumers expect the holiday season to be loaded with discounts a result.
Forty percent of people plan to do the majority of their holiday shopping online. That’s up 10 percentage points from 2019. And 71 percent of U.S. consumers planning to shop online this Black Friday and Cyber Monday. And although as noted Adobe says online shopping will grow at its slowest pace since 2015, online shopping will still generate $209.7 billion this year.
Digital is as important as ever!
According to Adobe, the hot sellers this year will be pretty much the same as with previous years with toys, sporting goods, and holiday décor being popular categories although Adobe believes the electronics category will show an increase thanks to significant discounting.
But overall, consumers will spend their money the same way that they have in previous years.
It’s already a competitive season as the bellwether retailers such as Amazon and Walmart amp up their deals. Discounts are going to range from 10-percent to 32-percent on average, and they’re already hitting the market. Online retailers will need to stress deals and value in their holiday campaigns.
Cyber Monday will still be an important day for holiday sales despite the slow growth of holiday spending overall in 2022. But as Adobe notes, some hours of the day will be busier than others. During the golden hours of eCommerce (7:00-11:00 p.m. PST), consumers will spend $2.6 billion or 26 percent of the day's total revenue. The spend per minute should surpass $12 million during the peak of 8:00-9:00 p.m. PST. All of this suggests that brands need to be targeted in their ad spend to account for surges such as this.
Throughout the season, use tools such as Google’s demand forecasts on the Insights page. This predicts upcoming trends relevant to your business so that you can adjust your budget and bidding strategy to capture spikes in demand.
In addition, Product-specific insights let you spot underperforming offers, identify products with missing feed attributes and compare your bidding strategy with your top competitors’.
As we have discussed on our blog, online shopping continues to become more visual and sophisticated. Google continues to develop tools to help merchants adapt to the changing way we shop. For example, Google recently launched Shop your way with new filters. This is a whole page of shopping filters on search are now dynamic and adapt based on real-time search trends. If someone is shopping for jeans, they might see filters for “wide leg” and “bootcut” because those are the popular denim styles right now. But those filters may change over time, depending on what’s trending.
And per our recent post, merchants should apply best practices for displaying content visually, such as offering numerous images and great photos. (Read this post for more detail.)
By now most every merchant has locked in its campaigns. But it’s never too late to modify your approach where you see a need to adapt.
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