Agency leaders on the 5 undeniable trends marketers must plan for this holiday season
Growing economic uncertainty, a lasting shift to digital-first consumerism and rising environmental concerns are all sure to throw a wrench in the works for marketers preparing for a busy holiday season.
As economic woes grow, consumers are rethinking spending / Adobe Stock
1. Economic woes will drive more intentional spending
Widespread inflation, rising interest rates and cost-of-living woes are causing consumers to rethink their spending habits. This will force them to be more intentional about their purchases, per experts.
“Consumers are going to be focused on essentials versus indulgences,” says Bruce Williams, executive vice-president, head of performance media at Dentsu Media US. In light of this shift, Williams predicts that “this year’s holiday retail season is going to be a battle for every sale due to tighter discretionary spending, unprecedented growth comps from 2021, marketplace competition and rising publisher costs.”
Marketers will be forced to adapt their approaches to answer these emergent challenges. As Williams puts it, “Brands will have to be strategic about the value their products provide to consumers and ensure promotional offers are clearly communicated and easily accessible for consumers who are price hunting and willing to compromise brand for a better price.” He adds that they will need to be “smart but aggressive to stand out.”
Others, like Ogilvy’s global chief strategy officer Mick McCabe, suggest that while consumers may not slash spend with indiscretion, they’ll certainly be “more intentional” about their spending this holiday season.
Like Williams, McCabe says that brands are likely to get creative to meet these changing behaviors. “[We’ll see] more ingenuity on the marketers side,” he says. “We'll see brands encouraging early spending deals, bundling and collaborating with other marketers to share audiences and costs.”
He offers the caveat, however, that some categories will fare better than others. Pets, food, children as well as health and wellness, he predicts, “will be relatively immune.”
2. Sustainable spending will grow
While consumers are likely to be more stringent with their dollars this holiday season, the money they do spend is likely to go toward more conscious consumerism.
“A big trend we anticipate for the 2022 holiday season is the shift toward conscious convenience. We’re collectively becoming more aware of the social and environmental costs of cheap goods and free two-day shipping, driving shoppers to reconsider the impact of their spending,” says Skyler Hubler, senior cultural strategist at Backslash, TBWA’s cultural intelligence unit.
As a result of environmental and ethical concerns, many consumers are focused on how they can better support a circular economy. “Shopping secondhand is not only becoming more acceptable, but more in-demand,” says Lisa Gramling, senior vice-president of research innovation and intelligence at IPG’s Momentum Worldwide. In fact, data from ThredUp indicates that 76% of consumers globally don’t believe there’s any stigma associated with secondhand shopping anymore.
This growing demand is creating new opportunities for retailers of various kinds who may be poised to take advantage of reselling. The market for resale luxury goods, for instance, is ballooning. Data from WARC reveals that secondhand luxury shopping is growing at five times the rate of new luxury sales. “Yes, thrift stores and online markets like eBay have long catered to those who might be seeking out a good deal, are in search of a long-coveted item or are simply there for the thrill of the search, but newer outlets like The RealReal, Poshmark and ThredUp have evolved ‘thrifting’ to ‘thriving’ by providing an outlet for anyone to seek out secondhand luxury goods, regardless of where they may live,” says Gramling. Expensive labels like Gucci and Anthropologie themselves are increasingly promoting the resale market with new online activations or pop-up events.
And beyond resale commerce, marketers are likely to create new opportunities for consumers to scratch their sustainability itch this holiday season. “Think ethical shopping guides, receipts that list out the carbon footprint of each product, partnerships between local shops and mass retailers and made-to-order clothing that minimizes wasteful returns,” says Backslash’s Hubler. “These are the types of initiatives that will help people buy better – and will help brands stand out among the holiday chaos.”
3. New sources of inspiration will abound
For shoppers, sources of inspiration are rapidly diversifying. While channels like Instagram and Pinterest remain fairly dominant “social media is now almost exclusively the place where people get inspiration for purchases,” says Lucien Etori, vice-president and executive strategy director at R/GA.
“This holiday season, niche newsletters will hold greater influence in the fashion sphere than the always-popular, mainstream gift lists,” for instance, says Chelsea Freitas, vice-president of partner, strategy and innovation, at UM’s innovation division the IPG Media Lab. “Newsletters are the new homepage, and in the fashion world, increasingly the arbiters of taste, allowing creators to build community around specific interests and passions.” Here, brands have a valuable opportunity to team with creators to offer special promotions for subscribers.
A similar trend is the rise in what Freitas calls “crowdsourced inspiration.” Community-focused platforms like Discord and Reddit are drawing in more users based on specific interests and hobbies, creating fruitful grounds for commercial inspiration.
Ahead of the holidays, Freitas says, “We anticipate brands will tap into these community channels for specialty drops, promotions, digital collectibles like NFTs or even to crowdsource seasonal feedback.”
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4. Digital touchpoints will elevate convenience
For modern consumers, convenience is the name of the game. Of course, the most blaring example is found in the ongoing boom of e-commerce. Though the growth rate of e-commerce is plateauing, the medium is still capturing a larger portion of total sales each and every year.
During the 2022 holiday season, it’s sure to prove its dominance – especially with consumers more worried about money. As economic uncertainty dominates consumer habits, says R/GA's Etori, “consumers will be hot, hot, hot on the trail of discounts; in fact the search for deals will be comprehensive and unremitting.” He predicts that “e-commerce will… be instrumental in that quest, especially as it opens up opportunities for shopping overseas as we've seen the pound hit its lowest level in 50 years and the US dollar stronger than the euro.”
Outside of e-commerce, however, retailers and brands are also increasingly investing in new digital innovations to streamline the shopping experience.
Much of this innovation is materializing at the in-store level. “Retailers are investing in in-store self-service technology that alleviates pain points like long lines and labor shortages to create a more seamless shopping experience,” says IPG Media Lab's Freitas. But this is just the start, she predicts. In the near future, perhaps in-store convenience will evolve to the point that retailers begin deploying over-the-air promotions, for example.
Of course, the maintenance of convenience-oriented technologies and offerings is no easy task. “Widespread adoption of fulfillment touchpoints like ‘buy online, pick up in-store’… have met high consumer expectations of convenience and speed, but come with continued upkeep,” Dentsu Media’s Williams points out.
He stresses that brands will be forced to “adapt investments, messaging, partners, products and buying preferences” to stay on top of inventory and demand as consumer activity picks up during the holiday season.
5. Holiday shopping will begin earlier than ever
Global supply chains are still suffering the knock-on effects of the pandemic. And while conditions aren’t as grim as they were last year (when countless shoppers placed orders for gifts only to realize their products would never arrive on time), consumers are likely to anticipate hold-ups. As a result, the holiday shopping season will kick off sooner rather than later.
“With consumers’ fears of shipping delays, supply chain issues and the focus on finding deals due to tighter budgets, ‘Cyber Five’ [the period between Thanksgiving and Cyber Monday] has shifted to become more of a midway point rather than a kickoff to the season,” says Dentsu Media’s Williams.
Other experts echo this assessment: “Shopping earlier has now largely been absorbed as a common consumer behavior in the US,” says R/GA’s Etori. In response, he says, brands have had to keep pace. Brands and retailers are launching special promotions and discounts earlier, too, to meet earlier surges in demand – especially as they realize “people's wallets may not stretch out all the way to December,” per Etori.
As Williams puts it, “Brands will need to be thoughtful about budget flighting across media and pacing to capture early demand, while also being prepared to pivot plans.”