The holiday season is upon us once more, with Christmas shoppers filling the high streets and festive adverts dominating the space across nearly all types of marketing platforms.
This means that, once again, brands and retailers are turning their attention to selling the perfect gifts and drawing in the much-needed sales boost the season brings.
But as rising inflation and a higher cost of living causes many to rethink their spending, research from the Post Office shows that half of those in the UK are planning a ‘smaller’ Christmas this year and gift spending in the US is expected to drop by $30 billion. Is this holiday season then still going to bring the uplift in revenue that retailers need?
The short answer is yes. Though the current financial climate will have an impact on consumers’ purchasing, and it may be a smaller Christmas for many this year, there is evidence to suggest that the intent to purchase is still there – with forecasts from Statista suggesting over $209.7bn will be spent globally across the holiday season.
That said, the economic pressures people are faced with aren’t to be ignored. Buying habits will change for consumers, and there are certain elements that should be kept in mind when planning marketing strategies.
To see success over Christmas this year, brands need to remain agile, act on the marketing lessons learned in previous times of crisis and approach their sales with a healthy dose of empathy – understanding that the average consumer will not be as financially confident as they were this time last year.
Lessons learned from past crises
It’s no secret that the economic climate is having an effect on brands, and cuts to spending will need to be made. However, it has been shown numerous times that those who keep a strong marketing strategy during times of crisis often come out on top.
During the 2008 recession, advertising expenditure dropped 13%, yet statistics revealed 3.5 times more visibility for brands maintaining their results. More recently, the performance of P&G and Coca-Cola at the beginning of COVID-19 reiterated the importance of ad spend during times of crisis.
The results from this year’s Black Friday and Cyber Monday weekend echoed this. Though the forecast for this year didn’t look promising, and retailers prepared for a quieter period, the event saw a record breaking $20.4bn in online sales. Cyber Monday itself saw $11.3bn in sales, and has now become the biggest US online shopping day in history.
The key takeaway is that it pays to be involved. While brands and retailers may have been apprehensive going into the cyber weekend, wondering whether it is worth the additional marketing spend, the results speak for themselves. During this festive period, marketers need to make sure they are in front of their customers, offering additional value, or they may miss out on seeing that sales boost.
The importance of being (reasonably) earnest
There is something quite jarring about people conducting ‘business as usual’ in the face of chaos. It’s ostracising, suggesting that the situation you and everyone else have been enveloped by has had no effect on this particular person – leading to a feeling of dissociation between you and them.
This is equally true of marketers that refuse to acknowledge a crisis. And as we head into the depths of the holiday season, those that are struggling financially are likely to find adverts presenting the ideals of wealth and excess over Christmas a little hard to stomach. That’s not to say festive marketing strategies at this time need to all doom-and-gloom either. Rather, there needs to be balance.
Brands need to focus on showing value, purpose and empathy to their customers. People will be looking for reassurance, and this can be provided through your messaging. Instead of trying to sell big ticket items, which consumers may be unable to afford, use your advertising to remind audiences that they can still enjoy the season without spending huge amounts of money.
Focus on providing a great user experience
With many having a reduced budget for festive shopping this year, there is a good chance they will be less loyal to a brand and more likely to shop around for deals. It is therefore crucial to ensure a smooth, seamless customer journey – or risk losing the sale.
Provide your customers with an easy to navigate website that provides information and deals upfront so that visitors know exactly what is on offer. While there have been advances in the technology of chatbots, a survey from TCN has shown the importance of the human touch, so make sure you have the staff available to manage the increased traffic over the Christmas period.
Now is a great time to reward your loyal customers. As purse-strings are tightened and people have less money to spend, consider offers that give something back to those who have stuck with you, reaffirming how valued they are to your brand during these difficult times.
Keep festive and carry on
Rising inflation and the cost of living crisis will have an impact on the holiday season, but it isn’t all doom and gloom. It has been a difficult year for many, and people want Christmas, albeit on a bit of a budget.
By empathising with the customer, demonstrating value and providing an excellent user experience, brands can still make the most of the holiday season and increase their revenues – while ultimately ensuring they remain a part of their consumers’ festivities in 2022.
Global Director, Principle Consultant