Top Holiday Spending Trends for Merrier Marketing
The weather outside may be getting chilly, but the busiest retail season of the year is heating up. Holiday spend is on the rise, up 2 percent year-over-year, according to Cardlytics’ new data on holiday spending trends.
While retailers have an opportunity to capture more holiday revenue this year, the competition will still be fierce, as consumers have more shopping options available to them than ever before. The retailers offering the most convenient, customer-centric experiences will be best positioned to stand out from the crowd and grow their market share.
To help retailers maximize their sales potential, it’s important to understand where, when and how their customers — and their competitors’ customers — are spending, then adjust their strategies accordingly.
Orange is the New Black Friday
Black Friday no longer marks the beginning of the holiday shopping season. In fact, our data found that nearly 40 percent of last year’s total holiday sales occurred in the four weeks before Black Friday, signifying the importance for retailers to capture shoppers’ attention and drive sales between Halloween and Black Friday.
This isn't to say that Black Friday and Cyber Monday are unimportant, however, the sales spike that's typically expected around the highly anticipated shopping events continue to be less pronounced than in years past. This is partly due to a growing pool of early-bird holiday shoppers, but those last-minute customers who continue to buy gifts well into December also contribute to the trend. In 2018, more than 30 percent of holiday spend occurred in the two weeks before Christmas.
These trends, in addition to the fact that the holiday shopping season is six days shorter this year, indicate that retailers need to continuously engage shoppers all season long — from Halloween to Christmas Eve. Helpful gift guides organized by recipient will appeal to early-bird shoppers, and progressive deals throughout the season will keep them coming back.
Omnichannel Customers Drive Significant Sales
In an age when convenience reigns supreme, consumers are constantly alternating between online and in-store shopping, presenting a valuable opportunity for retailers. Cardlytics’ data shows that customers who shop both in-store and online at the same retailer spend twice as much during the holidays compared to single-channel shoppers.
While the majority of holiday shoppers inevitably spend both online and in-store, they rarely do so with the same retailer. Only 10.3 percent of customers at top retailers are omnichannel shoppers with that brand during the holidays. This means that retailers have sizable headroom to convert single-channel shoppers into more valuable omnichannel customers. They should also cater to their existing omnichannel customer base by investing in convenience-driven offerings to increase sales.
Brick-and-Mortar Dominates, But Online is on the Rise
Despite the hysteria around the "Retailpocalypse" — i.e., the numerous stores and malls shuttering around the country — brick-and-mortar retailers are bringing in substantial holiday sales. Pure-play e-commerce retailers, like Amazon.com, may be the fastest-growing channel, but they’re far from being the largest channel in terms of share. Last year, more than 78 percent of holiday spend still happened in physical stores.
As the landscape continues to change, retailers across all channels can capture more sales by emphasizing their unique convenience factors. For example, physical locations can tout their knowledgeable staff, verifiable quality, easy gift returns, and the ability to shop eleventh hour deals after shipping deadlines have passed. Physical retailers with online properties can encourage valuable omnichannel shopping behavior by promoting buy online, pick up in-store (BOPIS) or curbside pickup. For online-only retailers, a strong mobile experience, shoppable gift guides, and free shipping will go a long way to attract digital shoppers.
This holiday season, marketing campaigns designed with a whole-wallet view of consumer shopping behavior in mind will be the recipe for success. It’s essential that retailers keep a pulse on consumers’ ever-changing spending preferences — both inside and outside of their four walls — and put these insights into action to capture incremental sales and drive loyalty. Providing engaging and convenient experiences for customers throughout their path to purchase will ultimately pave the way for a merrier holiday and more prosperous New Year.
Dani Cushion is the chief marketing officer at Cardlytics, a fraud-free, native advertising platform.
Related story: How Retailers Can Win Over Holiday Procrastinators
Dani Cushion is the chief marketing officer at Cardlytics (NASDAQ: CDLX), a fraud-free, native advertising platform.
With a focus on driving significant company growth, she has built out a best-in-class global marketing and communications team, and helped the company go public with the first tech IPO of 2018. Previously, she was SVP marketing and communications at Millennial Media, where she saw the company through its IPO and numerous acquisitions. She began her career in sports marketing at Major League Soccer, ISL, Millsport, and SiriusXM, and currently sits on the Board of Directors for not-for-profit organization Women in Technology. Dani graduated from Lehigh University with a Marketing major, and minors in Philosophy and Economics. She started every game for the women’s soccer team while there, and captained the squad her junior and senior years. Dani lives in Atlanta with her husband, three children, and a bunch of crazy pets.