If you believe the holiday shopping season seems to start earlier each year, you’re not alone—and you aren’t wrong. One in five adults began making holiday purchases before Labor Day, according to a new report from Samba TV and research firm HarrisX that surveyed 2,500 American adults to ascertain their plans for the festive season. This is partly due to a continued desire for normalcy following two pandemic years, combined with an improvement in the global transportation network that’s allowing more products to reach markets. Yet ongoing economic concerns are also impacting the way consumers plan to shop—which in turn impacts how brands market their offerings. Here’s what you need to know.
Even before Halloween arrived, many retailers had launched their holiday marketing campaigns. Target’s annual “Deal Days” of discounts and promotions kicked off four days earlier than last year, while Amazon launched its own two-day Prime event in mid-October, offering online holiday deals well ahead of Cyber Week. Meanwhile, Walmart executives noted that many customers “will start their holiday shopping research in October and Walmart is prepared to meet their needs.” As such, the retail giant announced plans to hire an additional 40,000 employees while also offering shoppers “no concern” return options on purchases, guaranteeing that anything bought after October 1 could be returned through the end of January. In keeping with the early autumn shopping trend, Walmart also offered a “Rollbacks and More” savings event for three days in October. Ditto for Kohl’s, which introduced a promotion running from October to Christmas that lets consumers save on holiday items in that prolonged time span. “We are definitely seeing brands go forward with earlier sales, similar to last year,” said Katya Constantine, CEO of performance marketing shop DigiShop Media. “With another Prime day being announced for early-mid October, we now see it as the earlier kick off to holiday shopping and brands’ promotional plans.”
Offering Deep Discounts
Unprecedented global factors like Russia’s invasion of Ukraine and the ensuing havoc it wreaked on energy and food markets, plus fears of an impending recession caused by lingering inflation, have caused consumers to be more cautious when it comes to holiday spending. AlixPartners reports that 39% of surveyed respondents plan to buy their gifts on sale, while 40% will shop brands deemed more affordable. “Consumers were fat with cash last year, they had pretty fat wallets thanks to government subsidies,” said Alexa Driansky, AlixPartners director. “The sentiment has shifted drastically this year, relative to the years prior, and that’s mostly driven because of economics. Inflation [is] impacting affordability, and consumers are very concerned about the current economy and where the economy will be a year from now.” Yet not all the news is dire—eight out of 10 millennials will spend the same or more this year than they did in 2021, according to Samba TV and HarrisX. Still, a general tightening of wallets is prompting brands to break out discounts.
Categories like electronics will especially get marked down, as per the recently released annual holiday forecast from software maker Adobe. That category could enjoy markdowns as high as 27%, compared to the 8% reduction on electronics seen in 2021. In happy news for kids, toy costs will get cut by as much as 22%, compared to last year’s 9% toy-sector reductions. Overall, brands will “want to incentivize consumers to spend because the purchase intent is going to be higher than it has been relative to other parts of the year,” said Vivek Panday, Adobe lead analyst. “And they’re well aware they’re going to have to really compete on price because we’re dealing with a very price-sensitive consumer. So that’s going to help drive down prices.” A holiday survey conducted jointly by CommerceNext and The Commerce Collective found that 32% of marketers will boost their promotional activity plans this holiday season, compared to the 13% that activated promotions last year. “There’s a lot of excess inventory on the market, so we’re going to see a lot of discounting and bargain shopping,” said Bill Krogstad, managing director at FTI Consulting. “Also, with the inflationary pressures, we’ll see customers looking for those deals for this season.”
How to Reach Shoppers
Samba TV and HarrisX report that only 48% of US adults still have a monthly cable or satellite TV subscription. That means marketers can’t connect with most shoppers via traditional television campaigns—yet reaching them is important, as shoppers are expected to spend hundreds of billions of dollars this holiday season. On the flip side, streaming has become ubiquitous among nearly every age group, with 79% of Americans now using a streaming service. Mobile is likewise merry—three out of four surveyed consumers say they’ve made mobile purchases, and much of that shopping is happening while multitasking. Connecting with omni-screen consumers across various platforms and multiple campaigns is therefore essential, and targeting moms is never a bad move, as 43% of moms say they do their online shopping while streaming a movie or show. This year’s holiday sales have kicked off earlier than ever, perhaps with good reason, as businesses anticipate a more cautious attitude toward spending. Still, a recent Deloitte forecast predicts that retail will increase between 4% to 6% over last year in the November to January holiday period, amounting to upwards of $1.45 trillion in sales. That would make for a happy end of year — and a bright start to 2023.