The holiday shopping season is pivotal for retail advertising. This period spans from October to December, depending on who you ask. For these short few months, spending booms, and retailers garner the revenue (and profit) they need to sustain them through the next year. They bank on this rise in spending.
So, with the cost of living rising continually, can retailers still count on a booming 2024 holiday season? And if not, how can they ensure they get ahead of the competition and survive to sell another year?
The holiday season 2024 and how it’s shaping up
While many shoppers are ready to open up their wallets for the holiday season – savings are top of mind in 2024 and the most important retail season of the year is no exception.
In its first holiday forecast of 2024, Deloitte predicts that holiday retail sales will increase between 2.3% and 3.3% from 2023’s numbers. Canadian consumers plan to spend an average total of $1,853 on gifts, travel, and entertainment this holiday season, a 13% increase over last year.
Consumer’s economic outlook is brightening as inflation and interest rates decline: 65% believe the economy will stabilize or improve over the coming months, up from 48% a year ago. In a 2024 PWC survey, consumers report they are expecting to spend more than in 2023 when planning this year’s holiday budget.
With savings top of mind for most of North America, PWC reports that 77% of consumers intend to spend the same amount or less than in 2023. Consumers recognize that rising costs will likely impact their holiday spending, but they are hesitant to spend any more than they have to to have a jolly holiday.
But even though customers are expecting to have to shell out some cash, they don’t want to. Consumers are still looking to save wherever possible. With the cost of living still causing strain, saving money remains highly desirable.
Bottom line: These findings show consumers want to cut costs wherever possible. They are keen to reduce expenses and that means sales and discounts will be critical to getting a competitive edge this holiday season.
Gen Z are hard to please
Younger generations are usually a key demographic for retailers. But in 2024 Gen Z is a difficult advertising target.
Every generation is cost-conscious right now, with millennials, Gen X, and baby boomers switching brands and finding new loyalty programs to stretch their dollars as far as possible.
The problem is that loyalty programs aren’t as big a draw for Gen Z customers. While this younger demographic is great at finding new brands online, they’re more likely to choose quality over quantity or loyalty – spending based on ethics, sustainability, and product lifespan.
In PWC’s report, 39% of Gen Z respondents said they were more likely to buy higher-quality products that last longer. Of the same group, 38% said that to make their holiday budget stretch further they would use savings, 33% said they would use financing options, and 33% said they would buy second-hand.
Gen Z are still keen to save, but are harder to target, with sales and loyalty perks missing the mark. To get twenty-somethings on board, retailers need to focus on quality products and easy-to-use financing options like Afterpay and Klarna.
Key holiday shopping trends to follow for 2024
These are three of the most important trends to watch for the 2024 holiday season.
Ethical practices are top of mind for consumers
In a recent survey, 73% of consumers reported that ethical practices were an important decision-making factor when choosing where to shop. Ethical business practices are currently one of the highest-ranking ESG (environmental, social, and governance) factors among consumers, closely tailing product safety and quality.
Ethical business practices also include sustainability, something deeply important to consumers and something they are willing to pay more for. This holiday season businesses should highlight their strong points to attract customers and make an impact on their bottom line, as well as the world.
In-store shopping makes a comeback during the holidays
Nearly one in five (17%) consumers reported shopping in brick-and-mortar stores more frequently than online during the holiday season. Retailers should pay close attention to in-store shoppers, since during the holidays this cohort spends, on average 9% more than the average consumer.
Shopping starts early for Gen Z
Gen Z is a critical demographic for retailers. This generation can be difficult to target but spend well. Gen Z notably shops earlier than older generations, with 21% of Gen Z reporting plans to complete most of their shopping before American Thanksgiving (compared with 11% of the total population). Most shoppers still plan to complete most of their holiday spending over the Black Friday weekend, but targeting the early market could pay off for retailers.
The takeaway
The holiday shopping season can sneak up on you if you aren’t careful. Here are three essential things to consider when planning your holiday campaigns.
- This year the cost of living will heavily impact how consumers spend, so prioritizing quality products and reasonable prices will be important.
- This three-month period is of utmost importance to retailers. Get ahead and understand the landscape as soon as possible. It’s ideal to plan in Q3 or even Q2.
- Aligning your priorities with your target customer will be critical in having a competitive advantage during the 2024 holiday season. This means considering macro trends like sustainability and ethical manufacturing.
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