Use First-Party Data as Your Competitive Advantage This Holiday Season
November and December are the two biggest months of the e-commerce year by a significant margin. Yet while e-commerce holiday sales are projected to grow between 10.3 percent to 12.8 percent vs. the 2022 season, business is still slow. However, by utilizing first-party data to target the right customers at the right time, you can make holiday shopping trends work to your advantage. This article reveals three data-based insights into 2023 holiday spending, before showing how first-party data can be leveraged to beat the holiday spread.
Discounts Are King
Although inflation is easing considerably, customers are still feeling the impacts; three-quarters of the population are worried about the cost of essential goods, with 80 percent admitting to adjusting their spending behavior accordingly. Meanwhile, U.S. consumers are feeling frugal after finding themselves with an ever-diminishing pool of pandemic era savings. These financial strictures have created consumers who are hungry for discounts and need to feel like they're getting the best value for their money.
Smart e-commerce sellers will give them exactly what they want. Given that 67 percent of U.S. consumers say they’ll respond to inflation by buying items on sale this holiday season, you would be wise to get discounts out there promptly. However, be aware that many consumers will wait for big discounts later in the season, so don’t throw all of your bargains out there at once. For example, 62 percent of U.S. consumers surveyed were more likely to delay a nonessential purchase until a discount was available compared to a year ago. Therefore, it makes sense to begin with small discounts and ramp them up at key moments.
However, don’t be fooled. Not all consumers want or need the same discounts on the same kind of products. First-party data such as location, device, and whether they’re a repeat visitor will tell you what sort of concessions you need to make for particular customers to reel them in without breaking the bank.
The Holidays Have Come Early This Year
The holiday season is starting earlier for some generations. More than one-third (34 percent) of Gen Z started holiday shopping before late August, compared to 21 percent the previous year. This indicates that you should already be firing on all cylinders on all of your advertising channels with holiday-related content, especially for products that are popular with younger audiences. Once again, ensure that you leverage first-party data to target Gen Z users with tailored promotions on your own sites.
Meanwhile, a Shopkick survey of 6,000 U.S. consumers shows that roughly 40 percent of Gen X and baby boomers intend to make large purchases on Black Friday this year, compared with only 18 percent of millennials and 3 percent of Gen Z. With this knowledge, you can focus your efforts on tailoring deals to older demographics on Nov. 24 this year.
Be aware that, over recent years, Cyber Monday has overtaken Black Friday in popularity. Deloitte research has shown that 53 percent of people overall will rely on Cyber Monday, compared to 44 percent for Black Friday. Unsurprisingly, tech-savvy Gen Z shoppers are the online holiday’s biggest fans, with 65 percent planning to make purchases this year. For this reason, you’ll want to create Cyber Monday promotions that highlight products for younger consumers.
Of course, it makes no sense to paint all of your customers with the same brush. Rather than simply promoting products that appeal to Gen Z one day and those popular with boomers the next, personalize the promotions on your pages based on all the first-party information available. Machine learning solutions can analyze a vast range of seemingly insignificant data (e.g., the number of tabs a customer has open, their battery status) to target them with promotions for not just the appropriate product, but at the exact moment they're more likely to abandon their cart. These strategies can be the difference between a bleak midwinter and a happy new year.
Know Your Customer
While the decline of the third-party cookie means that targeted ads will no longer provide you with the boost they once did, there are more ethical and effective ways to get your message out there this holiday season. Recent research shows that 87 percent of Gen Z rely on social media for gift-giving inspiration, with TikTok, YouTube, and Instagram driving the most conversions. Millennials are also fans of social media, but prefer to hear from brands via email (45 percent). This is good news because email addresses are one of the cheapest and most readily obtainable means of communicating with customers.
Gen X and boomers are the most receptive to SMS, with roughly 10 percent preferring to receive promotions that way. This is good to know because, like email, SMS messaging is cheap and time tested. Make sure to use available first-party data to customize your emails and SMS for personalized but nonintrusive experiences.
It’s the Most Wonderful Time of the Year … for E-Commerce
It’s vital to remember that while the e-commerce sector is likely to take a hit this holiday season, nothing says that you have to. The smartest businesses will take advantage of the busiest time of the e-commerce year by fine-tuning their approach to discounts and advertising depending on their audience. Gen Z, millennials, and boomers will be shopping at slightly different times this year — make sure that your promotions reflect this. Likewise, these demographics prefer different advertising channels, some more expensive than others. Ensure that you select the right ones for your audience. Follow these simple steps and rest assured that you and your business will have many happy returns this holiday season.
Laura Michon is vice president, customer success at Namogoo, a digital journey continuity platform.
Related story: 4 E-Commerce Metrics You Aren't Measuring ... But Should Be