Consumers Are Willing to Spend This Holiday Season — if Experiences Are Meaningful and Memorable
After months of saving for the future, consumers appear eager to embrace the upcoming holiday season. Bain & Company is forecasting that 2021 holiday retail sales could achieve the second-highest growth rate in two decades, rising 7 percent to $800 billion. When was the highest growth rate during November and December over that same time period? Last year, when retail sales grew an unexpectedly high 8.3 percent, according to the National Retail Federation.
However, it’s not enough to assume that just because consumers seem ready to open their wallets, they’re going to choose your brand to purchase. In fact, exactly the opposite is true. In our survey of 1,000 U.S. residents, more than three-quarters (78 percent) said the pandemic has made them think more carefully about how they spend their money. That means instead of a broad approach, you need to think in a more targeted way and focus on delivering experiences that are truly meaningful and memorable.
Create Experiences That Are Meaningful
What consumers buy is not only influenced by what they want — they're also increasingly considering how and where products were made. While half of the consumers we surveyed are setting aside more savings, even more (53 percent) are prepared to make bigger and more mindful holiday purchases this year. For example, our research found that 63 percent of consumers are willing to pay more for locally made gifts. In addition, 62 percent of consumers believe it's essential that retailers offer more products from Black/minority-owned businesses.
As heartening as it is to see that consumers want to support their local communities and Black and minority-owned businesses, they can only follow through on that desire if retailers offer that kind of merchandise. Unfortunately, only 28 percent of those we polled reported seeing more Black/minority-owned products when shopping. Set yourself apart from your competition by taking note of these preferences and better aligning your offerings with consumer expectations. This will enable you to satisfy customers with your product mix and help you create a superior, more meaningful buying experience overall.
Connect With Consumers in a Memorable Way
Holiday shoppers are notorious bargain hunters. However, today’s consumers are hoping for something different. Nearly eight out of 10 (78 percent) survey respondents said the pandemic has made them more aware of their own mental health needs, as well as the needs of family, friends and colleagues. In addition, 43 percent told us they view self-gifting as a form of therapy.
Results like these underscore how shopping is becoming more and more of a personal experience. Seize this opportunity for your brand to make a stronger, more memorable connection with consumers who are looking for gifts for themselves or others. With the right technology, you can provide personalized digital experiences even while showcasing promotions. This type of outreach can incentivize early holiday spending and get shoppers excited to engage. Just keep in mind: The pull through to the in-store experience is equally critical. The goal is for consumers to feel connected to your brand no matter where or how they choose to shop.
Be Mindful of Consumers’ Evolving Perspectives
Along with an increased willingness to spend on products from locally- and/or minority-owned businesses and the growing acceptance of “retail therapy,” our research also found that more than three-quarters (76 percent) of those under the age of 44 now “value travel and appreciate other cultures more.” Looking across all age groups, the results showed that 22 percent of consumers overall would like to give themselves the gift of travel.
Unfortunately, as we all know all too well at this point, travel isn't always possible. That’s why it came as no surprise to me that nearly all respondents (86 percent) said that they have also come to appreciate time at home and other simple pleasures more than they did pre-pandemic. This is particularly true for young shoppers, with 75 percent of Gen Z and 69 percent of millennials saying they're more willing to make big life enhancements post-pandemic. Brands that are mindful of these types of evolving perspectives will be better prepared to develop rich, relatable and engaging experiences that resonate with consumers from start to finish.
Build Powerful Connections and Lasting Relationships
Whether buying gifts for themselves or others, people are ready to spend. However, survey results indicating that consumers plan to increase their holiday spending this year tell only part of the story. You also must recognize that most consumers have shifted their spending priorities.
The 2021 holiday season isn't likely to be characterized by broad sales and marketing in which shoppers purchase items casually without a second thought. Instead, many consumers are now taking the time to research products, learn about the brands they support, and consider the impact the gifts they buy will have on the manufacturer and the recipient. Take advantage of these trends by telling your story in a relatable manner and creating personalized connections. When you do, you’ll be building relationships that will endure long after the holiday season has ended.
Paige O'Neill is the chief marketing officer of Sitecore, a digital experience platform and content hub that apply the power of data science and marketing technology to shape your business around new possibilities.
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Paige brings over 20 years of experience in senior marketing roles crossing many areas of enterprise software, customer experience, and cloud computing. As Chief Marketing Officer, she combines product marketing expertise with an extensive background in communications and a passion for developing thought leadership programs that build awareness, differentiation, and demand. Prior to joining Sitecore, Paige was CMO at digital workplace platform provider Prysm, where she rebranded the company and helped it transition to a combined SaaS and hardware business. She previously served as CMO at SDL and as Vice President of Marketing for Aprimo, where her thought leadership, demand generation, and communications programs contributed to rapid growth. Paige also served as CMO at PHH Arval and two early-stage startups—Aravo and GreenRoad Technologies. Prior to PHH, Paige spent a decade at Oracle Corporation leading a variety of marketing initiatives.