‘Tis the season: Advertising advantages that win customers and accelerate sales

The holidays are a time of year filled with wonder, joy, and merriment. Holiday advertising campaigns surprise and delight consumers with shopping experiences, deals, and great gift ideas. The winter holiday season only comes once a year, but gift shopping has become a year-long sport. The search for the “it” gift, shipping times, supply delays, and other hurdles can pop up, driving consumers to get a jump on holiday gift shopping.

Over the past several years, winter holiday shopping has started earlier and earlier, inviting months of research, gifting, and household purchases. Since the onset of the pandemic, consumers began to celebrate with smaller, more frequent gatherings that honor many of life’s small moments. This opens more opportunities for brands to connect with consumers and impressively increase sales. Advertising campaigns will need to continue to start earlier and extend for longer periods to stay top of mind with shoppers.

In addition to Back-to-School, and Halloween, there are a few special holidays that create a reason for a deal that both consumers and retailers recognize; those known as the “Cyber Five.” This includes Thanksgiving Day, Black Friday, Small Business Saturday, Cyber Sunday, and Cyber Monday. In more recent years, additional days have begun to gain traction and open wallets. Giving Tuesday, for example, has gained popularity in recent years as a way to complete holiday shopping and give back, with many brands and retailers offering a donation match or promotion in conjunction with a purchase to a charity of choice. These premier shopping days appeal to consumers’ interest in bargains and a desire to search for something great, like a treasure hunt. Consumers don’t want to miss out on the hot new gift or exclusive promotions and discounts.

Dedicated shopper days in prime time

Other popular shopper holidays created by brands include Amazon’s Prime Day, where Amazon offers its Prime members special discounts and limited-time shopper perks. Since its inception in 2015 Prime Day has consistently taken place one time per year in June or July, except in 2020 when the holiday moved to October due to pandemic concerns. What began as a single-day event grew in 2019 to include two promotional days. While many retailers offer discounts on these two days, several others do not, though still benefit from the exposure and increased online traffic. With the July 2022 Prime Day being the biggest yet, rumors in the market indicate that Amazon is closely considering a second Prime Day weekend in 2022, potentially in October.

At the July 2022 Prime Day event, members purchased over 300 million items racking up over $1.7 billion in savings, making it the biggest Prime Day to date. Shoppers bypassed items that may have been a discounted deal but weren’t considered a necessity. Top selling product categories included consumer electronics, household, and home goods. This included sales of TVs, headphones, laptops, and smartwatches; with Amazon’s own Fire TV, Echo, and Blink devices as top sellers worldwide. Household necessities like diapers, food, light bulbs, and pet products were other top Prime purchases.

Shoppers value products from brands they know and trust. Many shoppers on Prime Day, however, buy new products from brands they’re not as familiar with because of a bargain. As a matter of fact, July 2022 Prime Day sales by small and medium-sized Amazon shopping partners surpassed that of Amazon’s retail business. This may be a sign of what brands should expect from holiday shoppers this year. A recent survey from Numerator shows that one in five Prime Day shoppers said they took advantage of the sales event to start their holiday shopping.

More than 80% of Prime Day shoppers bought everyday goods or items for personal or household use. For brands, this means that holiday gifts this season will not be limited to the usual gifting categories like apparel, electronics, and toys. Brands in food and beverage industries, along with everyday essentials like toilet paper and tissues, can stand to win new market share as well. Bigger ticket items such as tires and furniture may also see a bump as savvy shoppers take advantage of increased deals and discounts being offered.

Inflation’s impact on shopping

This year, inflation is sure to impact the sales cycle with less concentrated spending around these brand-driven holidays. Inflation hit its all-time high in the middle of the July Prime Day event. However, the average spend increased moderately compared to the 2021 event.

After topping out at a 40-year high, inflation continues to drive dramatic increases in food and transportation costs, resulting in more money going to household needs and leaving consumers with less to save, put toward debt, or spend on discretionary items. Yet, price increases, along with rising interest rates, volatility in the stock market, and concerns of a looming recession have not kept consumers from spending. Dollars just don’t stretch as far when things cost more. This may be a sign that consumers will shop for more practical gifts for the holidays. Retailers like Amazon, Wal-Mart, and Target are likely to advertise heavily for these types of gifts as shoppers look for the best bang for their buck.

Supply chain woes

The inventory shortages of 2021, coupled with the shifting focus on essentials driven by inflation, have left many brands with inventory surpluses to deal with heading into the holiday. If your brand is in this situation, prioritize product SKUs or Amazon Standard Identification Numbers (ASIN) to aid in depleting excess surplus without draining supply of the best-selling items. We recommend forecasting how much demand for priority products will come from organic traffic compared to paid traffic and budget advertising accordingly. This reserves paid media spend for reinvestment in other product lines where there may be a supply surplus. Increasing advertising spend and promotion on inventories that are higher than optimal should help brands convert more customers and sell more products.

On the other hand, finding the best gift at the right price is only one piece of the puzzle. A whopping 50 percent of consumers will also start holiday shopping earlier to avoid items being out of stock due to continued supply chain issues. Early in 2022, marketers saw significant shifts in consumer spending that veered away from what was forecasted, resulting in a surplus of inventory. Brands will look to discounts and promotions to drive sales, though not without concern. Brand equity could fall if consumers believe the image or quality of a brand’s products and services has decreased, a threatening perception when consumers see loads of products on deep discount.

This holiday season, brands will need to work hard to match consumer inventory with ever-evolving demand. As if this wasn’t enough to challenge retailers this holiday season, you’re also competing with tourism travel. These macroeconomic conditions are no deterrent to consumers who want to travel “no matter what.” From high fuel prices to monkeypox, consumers said they will find a way to travel this summer and throughout the holidays. This may mean traveling closer to home or cutting back on excursions, lodging choices, and length of stay rather than foregoing the trip altogether. We expect shoppers to look for travel-related gifts and actual travel experiences to make this holiday merry and bright.

All together now

One thing is for certain, consumers love experiences. From pop-ups to brick-and-mortar, shopping in person can provide consumers with a unique brand experience and premium customer service that just can’t be replicated online. Consumers are eager to get out of their homes and [home] offices to reconnect and explore.

2021 was a blockbuster year for retail sales with strong eCommerce activity and a return to in-store shopping. Companies seeing the biggest boost from increased foot traffic are those that also have a strong eCommerce presence. Consumers will likely spend more time comparing potential purchases as they evaluate brand affinity, product and service quality, and value this holiday season. This research will come from a combination of online and in-person visits. With an extended sales cycle and heightened competition for consumer attention, brands will want to evaluate strategies, plans, and budgets in order to maintain a consistent positive presence among consumers across all consumer touch points.

With so many macroeconomic conditions influencing what consumers shop for and how they purchase, don’t lose out to your competition when it comes to your advertising strategy.

Stay tuned for the second part of this blog series to learn specific recommendations for maximizing your revenue this holiday season. You can also schedule a call with our eCommerce and retail experts to learn how DEPT® can help you build and implement effective digital strategies that grow audiences and convert more customers.