With Black Friday, Cyber Monday and the holiday season all quickly approaching, it’s time to nail down your marketing strategy.
The winter months are typically when North Americans spend the most money of the year, but with inflation hitting us all, will consumers be spending less this holiday season?
The majority of consumers are already altering their spending habits due to inflated prices, budgeting to afford essentials and decreasing their spending on discretionary purchases like hobbies and entertainment.
Despite the squeeze of inflation, a recent study produced by Klaviyo and Qualtrics revealed that 65% of consumers expect to spend the same amount or more this holiday season despite the financial pressure many are feeling from inflation.
Here’s what you need to know about how consumers plan to shop during the 2022 holiday season and how to reach your target market.
Who’s spending what this holiday season
Inflation is affecting every household in different ways, so who exactly will be changing their holiday gift shopping budget this year? Let’s take a look at how each generation is planning to shop during the 2022 holiday season.
- Over half of the Boomer generation will spend the same amount on holiday gifts as they did in 2021.
- This generation has the highest reported responses stating that inflation will not be affecting their purchasing decisions (14%).
- More Gen X consumers than any other generation are planning to reduce their spending this holiday season (38%). Of those reducing their spending, 29% will spend $250 – $499 less on gifts this year.
- Nearly ¾ feel that inflation is already affecting their purchasing decisions.
- Millennials are the most split on what they expect to spend this holiday season, with 21% saying more, 50% saying the same as last year and 29% expecting to spend less this year.
- 73% already feel that inflation is affecting their spending, budgeting more for essentials and less for discretionary purchases.
- Compared to other generations, more members of Gen Z plan to increase their holiday shopping budget this year (31%), with 17% planning to spend $1,000 or more
- More consumers in Gen Z than any other generation say that inflation will affect their future purchasing decisions.
Online vs. in-person
The pandemic forced both consumers and brands to adapt to an online-first shopping model and though in-person shopping is having a comeback recently, the majority of consumers will be splitting their holiday gift shopping equally between online and brick and mortar storefronts.
With a fairly even split between online and offline shopping, having an omnichannel presence is essential to capturing consumers today. Shoppers expect a seamless experience across social media, emails, ads, texts, eCommerce websites and in-store shopping.
Tips to target each generation
Don’t forget about the Boomers this season. This generation has some of the most disposable income for discretionary spending and reported the highest numbers for not being affected by inflationary pressures.
More Boomers than ever are online, so sending personalized product offers and deals through emails and digital advertising is a great way to get their attention.
This generation is looking for personalized recommendations and customized shopping experiences. They are more brand loyal than younger generations, meaning that your messaging has to capture their attention and connect with them in a timely and meaningful way.
A study revealed that 71% of Gen X consumers are influenced by loyalty programs and member-only perks. To capture this generation during the inflationary 2022 holiday season, try offering free shipping and in-store pickup, payment plan options like AfterPay, easy return policies and members-only discounts.
As the first generation to have modern tech and social media around for a large portion of their lives, it’s important to focus on the cross-channel experience when targeting Millennials. Beyond the standard email, social media and website experience, it’s important to turn to newer channels that this generation is using to inform their purchase decisions, like SMS marketing and TikTok.
This generation is careful about where they invest their money, valuing brands that are environmentally and socially responsible. Gen Z reported that their holiday shopping will be the least impacted by inflation, so make sure to keep them in mind when planning your marketing strategy.
Gen Z wants to know the ‘Why?’ behind a brand and craves authenticity more than any other generation. For this generation, it’s important to lean into your brand’s story and tell them why investing in your product is worth it. Utilizing user generated content is a great way to increase your brand’s perceived authenticity (read why here).
- Inflation is affecting every generation and their future spending habits, though it won’t be affecting most holiday spending budgets this year.
- The younger generations are less likely to decrease their holiday gift budget this year compared to the older generations.
- The days of in-store shopping are not dead – if you have a brick and mortar storefront, make sure to target your customers online and create a smooth experience from digital to in-person shopping.
- It’s important to get specific on who and how you target consumers this holiday season. With inflation affecting purchasing decisions, you have to make your brand stand out and be worth it to consumers.
Read Klayvio’s full Consumer Shopping Survey here.