When looking at the consumer trends of 2023 and beyond, many agencies and brands wonder whether customers will be willing to shop in-store again. Or will the online trends of mid-pandemic shopping continue to shape buying habits? Though some purchasing behaviors vary across demographics, the sentiment among U.S. consumers is relatively the same: many are worried about financial implications, such as the recession, but are less worried about COVID-19.
As retailers and brands plan for the upcoming holiday season, the consumer trends of 2023 provide a wealth of insight into shopper behaviors and attitudes. By analyzing the holiday shopping stats of the past and the predictions for 2023, advertising agencies and brands can develop strategies for creating more dynamic experiences with their products.
The Demographics of Economic Concerns
As of September 2022, only 3% of consumers believe the economy is in an excellent state, while around 48% of consumers believe the opposite. Consumers across various demographics also express worries about a future U.S. recession due to the recent price inflation of goods and services. While many continue to worry about inflation, more still are concerned that rising prices will harm their power to continue purchasing the goods they need.
Across all demographics, most adults think that the United States economy will experience a recession in the latter half of 2024. Regarding predicting holiday shopping trends for 2022, media managers and advertising agencies may benefit from exploring how U.S. economic trends affect purchasing behavior.
How Economic Perspectives Affect the Outlook for Holiday Shopping
When looking at 2023 holiday and Christmas shopping stats and predictions, many consumers are shopping from the perspective of inflation concerns and recession worries. By understanding the economic views of different customer segments, marketers and advertisers can tailor their messaging based on differing shopping preferences and sentiments.
1. Higher Spending Despite Inflation
Though there are continued worries about a recession, many consumers in the U.S. continue to spend money on shopping, gifts and general needs and services. Inflation in the U.S. was the highest it had been in decades, but customers still spent more than they were predicted to spend.
Even more consumers have increased their bank savings and are now willing to use those savings to spend money on food and outings now that the pandemic restrictions have eased. While credit card debt is on the rise, many consumers of all ages and income groups continue spending more of their money.
2. Spending on product categories
Though inflation continues to be a rising issue in the United States, consumers continued to buy more than projected. Many categories boomed during the pandemic, such as pet supplies, cosmetics, electronics and sporting apparel. However, now that lockdowns have subsided, goods and services like gasoline, restaurants and travel prices have risen, though inflation has also hidden the drop in consumption of these products.
Consumers prioritize goods over services, despite many states opening up their cities and lessening pandemic restrictions. This trend will likely continue until customers feel comfortable going outside the home again and spending time in crowds.
3. Home nesting
“Home nesting,” a trend where consumers ordered items to make their homes comfortable to spend more time in, saw an uptick during the pandemic. Despite an increase in shoppers venturing out into physical stores this year over last year, home nesting is likely here to stay. Since many employees still work remotely, investing in a multi-purpose home is still relevant. Buying items related to home decorating, cooking, comfort clothing and personal exercise equipment also likely brought positive experiences that consumers want to continue pursuing.
When Consumers Expect to Start Their Holiday Shopping
Looking ahead to the holiday and Christmas trends of 2023, the shopping season will start earlier and last longer than last year. Customers are shifting their shopping later, with 16% relying on Black Friday and Cyber Monday deals for their shopping in 2023 compared to only 6% who did the same in 2022.
Inflation also has customers delaying shopping. Many expect inflation to worsen by the end of 2023, causing customers to stock up on coupons, discounts and other deals to beat the rising prices of holiday gifts. With inflation in consumers’ minds, two-thirds are looking for deals in their everyday shopping more than they usually do.
Where and how consumers plan to shop
Consumers have more shopping platforms open to them than ever before. Whether they prefer to shop in-store, online with in-store pickup or online with home delivery, customers have their pick from a growing collection of retailers that offer it all. The challenge for advertising agencies and brands is offering customers the shopping options they’re most likely to use.
Understanding where and how customers plan to shop is vital for developing successful advertising strategies. Here are a few factors that may impact holiday shopping trends for 2023:
- Pandemic-driven services are slowing down: Several services that grew in popularity during the COVID-19 pandemic are likely to get less use this year. Only 25% of shoppers plan to buy online and pick up curbside, compared with 42% who did the same in 2021.
- In-store shopping still matters: While consumers enjoy the convenience of shopping online, 85% they plan to buy at least one gift in store.
- More shoppers are ordering online: Across all demographics, shoppers are researching and buying more online and in-app this year.
Consumer Expectations From Retailers
As 2023 ends and the holidays grow near, many consumers have built expectations from retailers. Strong omni-channel experiences are critical to unite in-store, online, and in-app purchases across industries and demographics.
Many businesses have begun to change how they offer customer services. To differentiate themselves from the competition, companies have started to provide innovative products and improved service to create an enjoyable customer experience.
Service innovations include:
- Product experiences: Interacting with the product should be a great experience while meeting the customers’ needs.
- Buying journeys: Making the buying journey as smooth and seamless as possible can improve customer experiences.
- Customer interactions: Companies focus on providing excellent and enjoyable interactions between the brand and the company, from unique packaging to engaging advertising language.
- Reliable data: By identifying new data sources, businesses may find what products customers approve of.
Many customers rely on product deliveries that are robust and fast-paced. During the pandemic, many retailers had to improve their product delivery platforms and apps to revolutionize how customers received items. Though supply chains were affected, delivery has improved globally.
Amazon is a pioneer in this aspect, and marketers and advertisers can expect other companies to follow suit with their revolutionized delivery services. From curbside pickups to rapid delivery, the mechanisms in place are ever-changing.
The rise in subscription retail services has been pioneered by Amazon and encouraged other brands to follow suit. Amazon Prime offers benefits, discounts, deliveries and easy returns for one of the most used subscription platforms to date. Many fashion and clothing brands have started offering yearly subscriptions for a small fee.
Subscriptions have come to be expected from customers who want more specialized deals and personalized service. Technology will play a critical role in improving and expanding subscriptions across various industries.
In terms of holiday shopping, many subscription services are offering deals leading up to the gift-giving season. Amazon is expected to shift gift shopping even earlier with a Prime Day in October. Almost 40% of Amazon Prime shoppers make their purchases for upcoming holidays.
With financial concerns related to inflation, customers are highly favoring affordable options this year. Almost three-quarters of all holiday shoppers are expecting affordability, while 80% of shoppers who want to spend more are looking to do so in cost-smart ways.
Businesses could do well to advertise holiday sales or deals as well as how their services or products offer value over their competition. Personalized messaging can address these savings-seeking shoppers and speak to this higher priority.
How the Economy Will Impact Purchases at a Category Level
Several industries may be more affected by the current economy than others. While items like sports apparel or cosmetics increased in sales during the pandemic, many retail stores, restaurants and live entertainment industries still worry about their customers’ post-pandemic spending habits.
1. Coupons and generic brands
Groceries are among the highest monthly expense besides housing or rent bills. As a result, many customers look for coupons and deals or have switched to generic brands to offset rising grocery costs. With celebrations like Thanksgiving and Christmas having such a focus on cooking, consumers will likely be on the hunt for grocery savings, from coupons to sales, leading up to holiday meal prep.
That strategic spending can also apply to other goods, including gifts for the holidays. From essential goods to discretionary items, 75% of consumers are looking for discounts this year more than usual. Shoppers are looking to cut back as much as possible, from buying alternatives or generic products to comparing prices from different stores and clipping coupons.
2. Apparel savings
Though food and gas dominate inflated prices, many kinds of apparel have risen in price. Although women say they will try to save money when clothes shopping, that hasn’t stopped clothing from being the most popular purchase category of the season. More shoppers plan to buy fashion and beauty items than any other category of products this year.
Shoppers will conversely reduce their spending on fashion and beauty products more than any other category if economic conditions worsen before the holidays. Yet economic uncertainty may not concern younger generations as much, with two-fifths of Gen Z women shopping for clothes once or twice a month.
3. Electronics spending
Despite inflation concerns, the interest in big-ticket items like electronics is rising. The consumer technology industry in the U.S. generated over half of a trillion dollars in 2022. Consumers are looking to buy tech from smartphones to streaming services.
The gaming industry is also expected to get a boost this year. Home gaming consoles may generate $6.5 billion in sales. Popular tech gifts like smartwatches, wireless earbuds and health and fitness tech are also expected to generate more sales in 2023.
Opportunities to Address These Shifts
There are many opportunities to address these behavioral shifts in consumer purchasing habits. Whether working to drive more shoppers into your store or maintaining their attention throughout the year and past the holidays, the chance to create a more extensive customer base is still achievable.
1. Drive shoppers into stores
Marketing works to drive revenue and encourage customers to purchase your items. Many companies have seen that addressing customer needs on social media or online search tactics brings back positive and measurable results. To create new strategies and drive more shoppers into the store, businesses can utilize mobile platforms and stay updated on e-commerce trends.
Social media continues to be a driving factor in customer purchasing habits, and brands that stay aware of this fact often thrive over the ones that don’t. As 65% of shoppers who plan to spend more will shop in-store this year, retailers and advertising agencies can benefit from creating dynamic, interactive ads that drive customers to retail locations. Emodo’s Advance Native ads capture consumers’ attention and seamlessly connect them with the nearest store location to help motivate more foot traffic to physical store locations.
2. Grab attention throughout the long season
While the holidays are an excellent time for businesses to thrive, keeping the customer’s attention long before and after the holiday season is also a good idea. Prepare new inventory after the holiday rush and locate competitors in the space to see what they are doing. Prepare your website for high traffic, so consumers trust your business’s credibility and server capability. To maintain a larger customer base, consider investing in intersystem automation that automatically completes tasks like updating packets, increasing security and reducing human error during orders.
Another important aspect of capturing customers’ attention is creative differentiation. Cutting through the noise and resonating with customers all season long is essential for meeting your ads’ key performance indicators around the holidays. Emodo enables personal, meaningful creative ad experiences that will make memorable connections that last beyond the holiday season.
3. Connect with specific holiday audiences
Drive engagement with your brand by focusing your efforts on specific holiday audiences. You might target consumers for a specific holiday depending on your products and services — such as a focus on Thanksgiving marketing if you’re in the food and beverage industry. You may also hone efforts on specific consumer segments, keeping in mind the platforms that particular genders and generations prefer to shop on. Use Emodo’s proprietary audiences, like Last-Minute Shoppers and Discount Shoppers, or create custom segments to reach customers based on consumer behavior.
It’s also worth remembering that mobile commerce, using smartphones and other devices to shop, is expected to reach $430 billion this year. Optimizing your site for a mobile shopping experience can target these smartphone-specific shoppers. For the 53% of shoppers who plan to buy online or use curbside pickup, retail brands might consider immersive creative experiences like augmented reality to give consumers a virtual experience with products. Shoppable ads with add-to-cart functionality could also drive sales online.
Stay on Top of the Trends Through a Deeper Dive this Holiday Shopping Season
Check out Emodo’s Holiday Campaign Headquarters, a one-stop shop to help you pick the right ad formats, creative strategies, and audiences in order to maximize your season’s goals.