How US consumers are willing to spend but are still on the hunt for discounts and the need to buy right first time
With the holiday season about to enter full swing, consumer optimism in the US appears buoyant. Figures from Adobe suggest a 4.8% growth in eCommerce to hit $221.8 billion in spending for 2023.
Within this, Cyber Week is expected to increase 5.4% on last year to $37.2 billion in online spending, accounting for an overall 16.8% share of holiday season shopping. Sales on Black Friday are expected to grow by 5.7% year on year to $9.6 billion, while Thanksgiving sales will grow 5.5% to $5.6 billion.
The figures are supported by further research from Deloitte. Its 2023 Deloitte Holiday Survey suggests that for this year, consumer spending will surpass pre-Covid pandemic levels for the first time, with consumers planning an average spend of $1,652, up 14% year on year.
Positivity has also returned, with 95% of consumers now expecting to take part in the holiday season, a figure which is back to pre-pandemic levels after slumping in 2021 and 2022. While the growth figures are encouraging, it’s important not to get complacent. Although rises in spending are expected, consumers still have particular demands.
The value customer
Pricing and quality are both still key. In the Deloitte study, nearly three-quarters of consumers said they expected higher prices and will be buying fewer gifts as a result. They will also be hunting out deals, with two-thirds (66%) now planning to shop over the Black Friday to Cyber Monday period, compared to less than half (49%) in 2022. It predicts that higher spenders will be focused on quality products while others will focus on getting a good deal. Discounts are expected to hit record highs of up to 35% over the season, according to Adobe’s research, with discounts deepest during Cyber Week.
The mobile customer
For the first time ever, the biggest share of this spend (51.2%) will be via mobile, with Adobe predicting that online spending on mobile will overtake desktop for the first time this holiday season. It predicts that mobile spending will hit a record $113 billion, a figure which is up 13.7% year on year.
Social media will also be a huge influence on shopping decisions for younger generations, with nearly half (48%) of Gen Z consumers planning to buy at least some gifts through social media, according to figures from Shopify, compared to a third overall.
Meanwhile, PWC’s Holiday Outlook 2023 survey suggests that 41% of Gen Z browse for gift ideas on social media, versus 31% overall, and also prefer the channel for comparison shopping (34% versus 27% overall).
Matching the in-store experience online
That said, the fight for online spend over in-store spend will be tough. Deloitte’s study found that consumers plan to spend more than a third (37%) of their holiday spend in-store rather than online, a figure that is back to 2019 levels. This is driven most strongly by the ability to interact with the product (44%) and to ensure product quality (39%).
Yet the opportunity is there for retailers to build their online spend by better emulating the in-store experience with retail tech that aids buying decisions and inspires shoppers. The PWC study suggests that for those who are going online, tech-assisted shopping is on the rise. More than half (53%) will interact virtually with customer service agents online, and a similar amount (51%) are also looking for gift recommendations, while a third (33%) are using technologies that help them search for product information before buying.
How to increase your share of online spending this holiday season
So we have a US consumer who is willing to spend big but is still driven by the hunt for quality value and buying the right product first time. While some are happy to shop online, others need the added reassurance online that they can get in-store, over assurances of product quality and features, as well as being able to understand and interact with the product better. And they are increasingly likely to turn to retail tech online to help.
This collection of trends makes social proof messaging an even better fit than ever. Social proof messaging uses the power of the wisdom of the crowd to deliver online experiences that your customers will love. Couple it with social proof recommendations, and product discovery becomes even more relevant, especially for that Gen Z consumer who is increasingly looking to social media to inspire and influence their buying decisions this holiday season.
Social proof messaging from Taggstar works by harnessing the wisdom of the crowd. It allows you to portray to customers what might be popular or trending onsite with real-time, factual, contextual messages that help shoppers make more confident decisions, whether they are looking at your product list page or category pages or have already moved on to your product detail pages.
Gift retailers, including Hotel Chocolat and The Very Group, already use social proof messaging from Taggstar to drive conversion rates for their business, with Very.co.uk recently introducing animated messages to grab customers’ attention even faster.
Why there’s still time
The holiday season is already as hectic as ever. Despite the renewed confidence of the US consumer, it might feel like one of the worst times to consider new technology. Yet a Taggstar social proof messaging implementation is fast and non-invasive and delivers scientifically tested uplifts in conversion rate and revenues quickly, with statistically significant results in a matter of days for many of our customers and ROI of at least 100%.
Can you afford not to have social proof messaging on your list this holiday season?