Holiday retail trends show spending is alive and well has been saved
Holiday retail trends show spending is alive and well
Leverage social commerce to build retail brand loyalty
The 2022 holiday shopping season is here, but inflation is on everyone’s mind. Many shoppers expect prices—and their spending—to be higher compared to last year. Consumers are also concerned about continuing pandemic-era product shortages and delivery delays. What do the trends show?
In response, shoppers are rethinking their spending strategies and retail brand loyalty. According to the 2022 Deloitte holiday retail survey, 65% of shoppers will trade brands if prices are too high, and many are willing to shift spend based on product availability and delivery dates.1 However, the holiday spirit is alive and well; consumers still plan to purchase gifts, and many are turning to social media platforms for inspiration and shoppable media to purchase products conveniently in-app.
Gen Z and millennial shoppers rely on social platforms and influencers
Social media usage is at a decade high and continues to grow as a resource for holiday shopping.2 Leading in usage are Gen Zs, who have $360 billion in disposable income,3 and millennials, the largest consumer group and highest-spending generation.4 Among important holiday retail trends, 60% of Gen Z shoppers and 56% of millennials plan to use social media to visit a specific retailer’s account, make a purchase, and/or view product reviews and feedback this holiday season.
Social media is a growing resource for holiday shopping
These generations of shoppers rely heavily on influencers when looking for gift ideas, trending items, and product reviews. According to the 2022 Deloitte digital media trends report, one-third of US respondents say these online personalities influence their buying decisions—a figure that increases to more than half for US Gen Zs and millennials. Among surveyed holiday shoppers, 30% say they follow influencers (vs. 24% in 2021; 22% in 2020). Influencer-generated content includes short-form videos, unboxing content, live-streaming channels, and product recommendation lists.
High inflation, delayed shipments, and two years of COVID-disrupted holidays have created a unique environment in which shoppers are willing to change retail brand loyalty to fulfill their holiday shopping lists. At this critical time, retailers and brands can use social commerce strategies to engage with holiday shoppers effectively, strengthen existing customer relationships, and quickly build new ones.
Increase ‘share of mind space’
In the wake of COVID-related stockouts and extended delivery times, consumers are accelerating their 2022 holiday shopping timeline: 38% plan to start shopping earlier than last year and spend one-quarter of their holiday budget by the end of October.5 To capitalize on this and other holiday retail trends, retailers and brands should act quickly and leverage social commerce strategies to increase “share of mind space” before consumers make their final purchase decisions. Specifically, retailers and brands can build relationships with new consumers through creator partnerships to expand awareness of their brand and drive new holiday sales.
Content creators can help retailers and brands expand into adjacent customer segments, acquiring new, impressionable consumers prior to the holiday season. Partnering with creators who have a desired target following can enable brands to reach this new customer base and build trust at a much faster rate. Notably, 37% of consumers trust influencers over brands, and Gen Z and millennials are two times more likely than boomers to trust influencers.6
Brands promoted by authentic and trusted creators help shoppers move through the consideration and evaluation phases quickly because there is a transference of credibility from the creator to the brand. For example, creator content focused on product comparisons showcases the attributes of similar products at different price points and provides recommendations based on price sensitivity, which are especially popular among Gen Z users, who are known for being “thrifty consumers.”7 By working with creators on product review content, brands can promote their products with millions of users and acquire new customers who are open to switching retail brand loyalty.
It’s also critical that brands provide users with accurate and updated information on inventory across SKUs and estimated delivery dates within the social platform. Since holiday shoppers are starting earlier, retailers and brands have the luxury of time; however, transparency into availability and delivery is critical to building loyalty and trust with Gen Z and millennial shoppers. By offering this information in-app, retailers and brands can help nudge holiday shoppers into purchasing the product without leaving the platform.
Generate referrals, build loyalty, and encourage repeat spending
These social commerce strategies are not unique to acquiring new customers; they can also help reinforce existing customer loyalty. As much research shows, the cost of acquiring a new customer can be up to six to seven times more than retaining customers.8 Still, what makes social marketing and shoppable media particularly effective, is that organic content or paid advertisements targeted for top-of-funnel engagement, such as building awareness to attract new customers, have downstream impacts on current customers, who see the same content and are reminded to purchase. For example, existing customers may not require as much time in the consideration phase, but retailers and brands can use social commerce strategies to build awareness of new product lines and help inspire holiday purchase ideas. Whether organic or paid, social content targeted to existing followers and previous purchasers should encourage referrals, retail brand loyalty, and repeat spending.
In addition, providing a seamless purchasing experience within social channels and shoppable media is critical to nudge users toward purchase. Enabling product tags, embedding the brand website into the app, or enabling in-app transactions will help reduce friction on the shopping journey, since users can quickly identify and purchase products with a few clicks. Because holiday shoppers are particularly impressionable now, retailers and brands need to reduce any friction points to help ensure users move through the shopping journey and purchase on the platform.
With eager shoppers already crossing items off their gift list, retailers and brands should work fast to deploy a social commerce strategy that focuses on both retaining loyal customers and acquiring new ones. Retailers and brands that conduct creative and targeted campaigns and offer a frictionless purchasing journey on social platforms will help inspire shoppers and increase holiday sales and revenue.
1 Nick Handrinos et al., 2022 Deloitte holiday retail survey, Deloitte Insights, 2022.
3 Amelia Pollard, “Gen Z has $360 billion to spend, trick is getting them to buy,” Bloomberg, November 17, 2021.
4 Alexandra Pastore, “Big spenders: Millennials are projected to dole out $1.4 trillion in 2020,” Women’s Wear Daily, January 6, 2020.
5 Handrinos et al., 2022 Deloitte holiday retail survey.
6 Oracle, “37% of consumers trust social media influencers over brands,” press release, May 3, 2022.
7 Pollard, “Gen Z has $360 billion to spend, trick is getting them to buy.”
8 Kate Silver, “Retaining customers vs. acquiring customers,” American Express, November 21, 2019.