For most businesses in retail, eCommerce, CPG and adjacent industries, the next few months will make or break their bottom line.
Holiday sales alone accounted for 20% of retail industry revenue last year. With the stakes this high, you can’t afford to have a peak marketing strategy based on outdated information.
Understanding your customers is the first and most important step in breaking through the noise of a competitive holiday season. Smart marketers will rightfully turn to data for those crucial insights—but data can be deceiving, especially if the information you’re using is no longer accurate.
For instance, looking at last year’s holiday shopping data provides a powerful roadmap for an effective strategy driving into this year’s peak season. But that data is almost a year old, and today’s consumers are changing faster than ever—how confident are you in the data you’re using to shape your peak campaigns?
Register for the upcoming eec webinar: Email Marketing Holiday Readiness to equip yourself with everything you need to bring your brand happy holidays. Then read on to see how your customers are changing and what you need to do to adapt.
Consumer Confidence Nears 18-Year High
Consumers today are the most optimistic about their financial situation and the state of the economy they’ve been in almost 18 years. The Consumer Confidence Index stood at 133.4 in August, a figure not eclipsed since October 2000.
That’s huge for holiday shopping. High confidence correlates with higher spending—especially on non-necessities like gifts and luxury goods. People become more willing to make big purchases and splurge, and feel less urgency to save or pay down debt.
Growing consumer confidence is not a brand-new trend; it’s been slowly recovering for several years:
Consumer confidence data depicted by shopfloor
But consumers heading into the 2018 holidays now have a significantly rosier view than they had this time last year. For comparison, the Index heading into the Holidays last year looked like this:
If you’ve been conservative with your holiday offers and messaging in recent years in response to economic uncertainty among consumers, now might be the right time to start thinking bigger. When your customers are willing to make larger purchases and take more chances, give them what they want!
Unemployment Down, Wages Up
Recent months have been good for job seekers—part of the reason consumer confidence is peaking. This kind of good news for consumers can also be good for your bottom line, if you’re proactive in taking advantage of the upward trend.
Unemployment dipped to a remarkable low this year. In August 2017 the national unemployment rate was 4.4%, according to the Bureau of Labor Statistics. The latest results for August 2018 saw that number drop even further, to just 3.9%.
Additionally, average hourly wages have risen 2.9% since this time last year.
These changes might not look like huge shifts on paper, but combined they make for an enormous impact on the economy. The YoY difference manifests in the form of millions of added jobs and billions of dollars in additional income.
That means a huge pie of available disposable income that simply wasn’t available during last year’s holiday season. If you’re going to get a slice of it, don’t overlook consumers who were not customers last year, but have since re-entered the workforce or been on the receiving end of a promotion or raise. This is a great opportunity to start new relationships, build loyalty, and boost your holiday numbers.
More Mobile Than Ever
More and more consumers are turning to their phones first to make a purchase, whether they’re in a brick-and-mortar location or engaging in eCommerce online.
Mobile is now driving 60% of eCommerce traffic. Additionally, “71% of shoppers use mobile devices in-store to read reviews, make purchases and other behaviors.” That’s an enormous shift, and critically important to understand as holiday retail shopping ramps up.
For comparison, about 34% of holiday ecommerce was mobile driven in 2017. And while many consumers were doing real-time product research and price comparison in stores last year, that proportion was a more moderate 60% heading into peak season.
Your customers are thinking, acting, and buying on more devices every day. It’s important that you’re there to communicate with and support them wherever they go if you want to be their brand of choice through the holidays.
Word of Mouth Shopping Returns—with a Twist
2018 has seen an explosion of researching and purchasing products through word of mouth—but not in the way you might think.
No, people aren’t suddenly in a frenzy asking friends and coworkers about the best deals and recommendations (at least, not more than normal). They are, however, speaking up and shopping through the quickly growing selection of voice assistants now available on the market.
More and more consumers are making purchase decisions by speaking with digital assistant apps on their phone like Apple’s Siri or ‘smart speakers’ like Amazon’s Alexa. A short conversation with such a device can have a pizza delivered to your door, direct you to the nearest antique shop, or add dwindling household staples like laundry detergent to your digital shopping cart.
That has big implications for anyone in the retail and eCommerce world. According to Think with Google, 44% of those who regularly use voice-activated speakers say they order needed household products like groceries at least once a week. 62% say they’ll likely make a purchase through their speaker in the next month.
The meteoric rise of voice search and virtual assistants has thrown the world of SEO into chaos as businesses scramble to adapt to a new kind of search and online interaction. Those that have the best AI and semantic analysis capabilities and deliver a seamless experience to voice shoppers will reap the rewards as holiday buying ramps up.
Media Trust Ups and Downs
Consumer trust in certain media channels has shifted drastically since last year’s holiday season. That should influence your media mix as you head into peak.
Unsurprisingly, advertisements and marketing executed on trusted platforms tend to be more compelling and successful. So it makes sense to consider shifting your investments away from channels viewed with growing suspicion and toward those that are considered more reliable.
Two forms of media have seen especially large shifts in public perception since peak 2017:
Since last year, trust in social media is down 11 points on the Edelman Trust Barometer as accusations of fake news, bots, foreign influence and more have been thrown in all directions.
On the other hand, trust in traditional media has recovered almost entirely after bottoming out last year:
Trust in Traditional Media Trends from The Drum
Last year’s data would lead many marketers to consider diverting investments away from traditional channels and toward emerging digital media like social. But if your advertising ROI through the holidays depends on getting placements on channels your customers trust, you may need to reconsider your approach—fast.
Copywriter, Zeta Global