The 2023 holiday shopping season kicked off strong, with Adobe Analytics reporting a record $9.8 billion in Black Friday online sales, up 7.5% from 2022.Cyber Monday numbers were even stronger, with consumers spending $12.4 billion, a 9.6% increase over last year. So, what does this mean for December sales and the rest of the holiday shopping season? ThinkNow recently conducted a nationally representative quantitative survey of 1,500 consumers revealing insights into what Americans buy and spend for the holidays. From shopping habits to spending patterns, let's delve into the top five trends shaping the 2023 holiday shopping season.
Download the report here.
Top Holiday Shopping Trends
- Pre-Holiday Shopping: According to the survey, 2 out of 5 consumers preferred to kick-start their holiday shopping before Black Friday with many aiming to beat the holiday rush and avoid potential price increases and last-minute shipping delays. These early birds plan to strategically spread their purchases over the entire holiday season to help reduce feelings of overwhelm and keep the budget.
- Spending Sentiments: The robust start to the holiday shopping season may not last. Dollar sales growth is projected to slow from 6% last year to 3.3% this year, according to S&P Global Market Intelligence. Our survey corroborates this trend and shows that:
- Planned gift spending is waning: This year's average planned expenditure on gifts is $433, a noteworthy dip from $506 in 2018.
- Gift-giving opt-outs are rising: Nearly 20% of respondents are opting out of gift-giving altogether this season.
- Interest-free loans are gaining traction: 30% of respondents plan to leverage interest-free installment loan services like Pay in 4, AfterPay or Klarna.
- Spheres of Influence: Multicultural consumers rely heavily on their social circles for holiday gift ideas. When shopping for holiday gifts, family and friends remain the top source of inspiration for consumers, followed by in-store displays, with Hispanic consumers particularly receptive to the latter.
- Digital-First Shopping: More than half of consumers plan to make holiday purchases online this year, with e-commerce giants like Amazon, eBay, and Temu leading the way. Most online purchases will be made via smartphones, highlighting the growing role of mobile devices in the shopping experience. Asian consumers are most likely to shop online, while Millennials are most likely to use mobile apps.
- Top Gift Categories: Clothing, gift cards, and toys/games emerge as the frontrunners in this year's holiday gift categories. Gift cards are most popular with Baby Boomers, while Millennials are most likely to buy a voice-controlled product like Google Home or Amazon Alexa.
Implications for Businesses
The changing consumer landscape presents challenges and opportunities during the holiday season. Our findings suggest that businesses should focus on the following strategies to engage multicultural consumers during this time to build goodwill that could spill over to other peak spending seasons:
- Embrace cultural nuances. Multicultural consumers are a growing and influential segment of the U.S. population, and spending habits differ by ethnicity. For example, 41% of Asian consumers planned to start their shopping on Black Friday compared to the 27% Total Market Average. Over 40% of Hispanics (most commonly foreign-born and Spanish-dominant) plan to celebrate Three Kings' Day on January 6, extending the holiday shopping season into the new year. This presents a unique opportunity to engage these consumers with targeted campaigns and promotions.
- Prioritize e-commerce and omnichannel experiences. Online shopping soared during the COVID-19 pandemic and has continued to grow, but consumers are also enjoying the ability to gather in person again. Businesses must optimize their e-commerce platforms and mobile app experiences to cater to the growing mobile-first consumer base while offering seamless integration between online and offline experiences, like in-store pickup.
- Offer competitive prices and promotions. Inflation woes and government shutdown rumors have made consumers more price-sensitive – they are actively seeking deals and discounts. Use data-driven insights to tailor offers and discounts to specific cultural groups based on their preferences. Offer flexible payment solutions like installments or buy-now-pay-later options to cater to various financial situations.
- Provide exceptional customer service. Good customer service is always important, but it is especially critical during the stress of the holiday season. Train employees on cultural sensitivity and offer multilingual customer service options to make it easy for customers to communicate in their preferred language. Most importantly, respond promptly to inquiries and concerns and demonstrate empathy and understanding.
The 2023 holiday shopping season is starting strong, with several key trends emerging. Early birds are taking advantage of extra discounts and promotions, while spending sentiments are mixed due to economic uncertainties. Online shopping continues to dominate the landscape, with over half of consumers planning to purchase online. This presents a unique opportunity for businesses catering to multicultural consumers who are expected to drive significant growth during the holiday season.
Download the full report here for a deep dive into the findings and more cultural insights.