Sitecore, a global leader in digital experience software working with brands like L’Oréal, Microsoft, and United Airlines, recently released its third annual 2023 US Holiday Report. The report reveals valuable insights into consumer shopping trends for the upcoming holiday season among American shoppers, with nearly one-third planning to spend more this year. At the same time, an almost equal number intend to be more cautious with their holiday expenditures.
The study shows that 29% of American consumers are ready to spend more this holiday season, and 28% have already begun shopping spree. Retailers who have started early with their holiday offerings and have tailored their content to meet customer desires are likely to reap the benefits of this trend. However, the economic uncertainty has made 26% of shoppers more cautious about their spending, with 43% stating they’ve already started saving for the holiday season.
“While we expect many consumers will spend less as they’re still reeling from the financial impact of inflation, we do expect to see higher spending this year compared to last year,” said Hannah Grap, interim CMO at Sitecore. “But this increased spending doesn’t come without strings attached for brands. Consumers will do their homework to keep tight control over their spend and will be selective in what and who they spend their money with this season. Brands must understand their purchasing habits and preferences to win over buyers – and they must build content and experience strategies that reflect these preferences.”
This highlights the importance for brands to understand their customers’ concerns and ensure their promoted products align with shopper needs. In an effort to make the holiday season more affordable, consumers are exploring various strategies. These include cutting back on expenses and subscriptions (55%), taking on side jobs (28%), and selling personal items to earn extra cash (23%).
Interestingly, 19% of consumers are even considering re-gifting items, while a significant majority plan to buy cheaper (74%) and fewer gifts (69%). When it comes to choosing where to spend their money, shoppers are prioritizing early discounts and deals (68%), online-only discounts (59%), and exclusive pre-sale deals for loyal customers (38%).
A few things retailers should know (as 29% of shoppers plan to spend more this holiday season):
- Turn scrolls into sales: Two in five (41%) say they’re influenced by holiday ads to decide what and where they purchase gifts. Two in three look to Tik Tok (62%) and Instagram (67%) to decide the gifts they’ll purchase this year, saying they’ll buy directly from social media posts (66%).
- Forget wishlists, just Ask AI! One in four (22%) say they’ll use GenAI tools like ChatGPT or Bard to help them pick out gifts this year (and wish their family would do the same to pick out a gift for them (23%)).
- Free shipping or bust: 67% won’t purchase an item that doesn’t offer free shipping. 84% will fill carts to meet minimum free shipping requirements
- A Tik Tok and Instagram Inspired Holiday: Two in five (41%) say holiday ads influence them to decide what and where they purchase gifts. Of those who say social media inspires them, Tik Tok (62%) and Instagram (67%) are the top channels of inspiration to decide the gifts they’ll purchase this year. Consumers are also just as likely to trust Amazon gift recommendations (43%) over recommendations made by family and friends (48%). The trust in gift recommendations from Amazon aligns with shopping habits as nearly three in five (58%) consumers say they’ll shop from Amazon the most this season compared to purchasing directly from a brand’s website (34%).
- Functional, Experiential and Sustainable: Americans’ top gift choices this year will be functional (81%), sustainable (75%) and experiential (54%). Additionally, subscriptions (39%) and learning experiences (33%) will be popular gift choices.
- Inventory FOMO: 78% say they want to see inventory levels to understand what products are available. If they know an item is low in stock, it will lead them to purchase it right away (43%) or put it in their cart (26%).
- Online Shopping Is Still King – Just 1 in 5 (20%) plan to do more of their holiday shopping in-store. While consumers plan to do more online shopping this season (47%), they do plan to visit stores in-person to research and browse for items (38%).
- Black Friday Is Bigger This Year – Two in three (66%) plan to holiday shop on Black Friday, which is a higher number of people who shopped in 2022 (56%). Nearly half will shop online only (45%) and 2 in 5 (38%) will shop online and in-store. Beyond the fact that it’s just fun to shop on Black Friday (48%), most shoppers (86%) say it’s more financially advantageous to shop during Black Friday and it helps them avoid last-minute shopping (34%).
Grap adds, “Offering up discounts on big ticket luxury items won’t be appreciated by customers tightening their belts. In fact, doing this may even be brand damaging. Time-poor and cash-strapped consumers will shop with the retailers who showcase the things they want at the price-points they need through an online experience that is intuitive, easy-to-engage with and exciting. Sitecore’s 2023 U.S. Holiday Report reveals that the customer experience matters and things like showing shoppers item availability, offering free shipping and implementing direct-to-purchase options on social media could give brands an edge over competitors.”
Brands must reflect these economic realities in their promotional content by offering targeted discounts, lower-priced alternatives, and curated vintage items. The report also highlights the importance of free shipping, with two-thirds of consumers unwilling to purchase items that don’t offer this perk. Additionally, 78% of shoppers want to see inventory levels to understand product availability, and social media platforms like TikTok and Instagram are significant sources of inspiration for gift purchases.
Sitecore commissioned Advanis to conduct a survey among U.S consumers reflecting on holiday shopping behaviors. The study polled 1,005 U.S. consumers in September 2023. More data is outlined in the full report here.