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How brands can optimize holiday retail strategies to reach lower-spending consumers

December 15, 2022

The festive period is usually a time of joy and gift giving, but with the rise of inflation taking a toll on spending habits, it would be easy to assume that consumers are less likely to spend this season. However, perhaps surprisingly, a survey from Coveo reports that 80% of respondents have plans to shop just as much as last year, or even more. Additionally, according to McKinsey, shoppers are even looking forward to the season, with 55% of US consumers who responded to their survey saying “they are excited about holiday shopping”, perhaps due to this being the first Christmas in three years that consumers have been able to enjoy freely.

Despite these optimistic statistics, 84% of shoppers are looking to reduce the overall cost of their purchases according to bankrate.com. Brands should therefore optimize their retail strategies to take advantage of the potentially favorable shopping season, whilst keeping in mind that consumers might to on the lookout for the best deals and additional value, even more so than in recent years. Through connecting with consumers, adding extra value onto necessary purchases, and creating small yet memorable moments of joy, brands can ensure that the festive season is merry and bright, as well as profitable.

1. Connect with consumers

It could be easy for consumers to feel alienated from brands that don’t align with their values during this period of economic hardship. Ensuring that brand messaging remains empathetic to consumers and creating clear communication channels is key to maintaining good customer relationships throughout the cost-of-living crisis.

Ads that don’t alienate

Use marketing concepts that consumers can relate to, such as the core values maintained over the festive period. Lidl’s Christmas advert this year is a great example of a commercial that doesn’t focus on buying products, but instead centers around a core Christmas value: being with family. The amusingly unexpressive teddy bear, equipped with its newly shrunk Lidl Christmas jumper, finds fame as the new ‘Lidl Bear’. Following an exciting new life of red carpets and private jets, the bear eventually finds itself back home with its family, where it belongs, sending home the message that material things and flashy lifestyles cannot replace the true value of belonging.

Disney’s trilogy of Christmas adverts ‘From Our Family to Yours’, where a new episode was released each year since 2019, focuses on family at its core and navigating family dynamics over the festive period. The first in the trilogy focused on intergenerational relationships, the second on step-parenting, and the third looks at a how the family dynamics can change when a new baby is born. Though Disney merch and Christmas themes are scattered throughout, at the heart of the adverts is a message about family values and togetherness – something that almost everyone can relate to, especially in times of economic hardship.

A nod to nostalgia

Fresh out of a pandemic and currently experiencing economic hardship, you would be forgiven for wanting to rewind the clocks and escape to a happier time. Using a snippet of the Christmas movie classic, ‘Elf’, Asda’s Christmas advert taps into collective nostalgia from this popular noughties film, tuning into the memories that consumers have when watching these films. Reusing old footage of Buddy the elf, craftily superimposed over an Asda store, also has a double benefit of reusing resources, potentially with an economic benefit.

Open up the conversation

Let consumers know you are thinking of them and value their patronage during this period of difficulty and leverage your social media touchpoints to have open dialogue with consumers. TikTok is one of the most popular apps for brands to create engaging conversations with their customers, particularly due to the ability to embed a comment into a video. Use conversational features on social media channels to listen to and connect with your customers.

2. Provide additional value

When wallets are slim, every purchase matters. Provide additional value for consumers over the festive period with loyalty programs and seasonal discounts.

Loyalty programs

Loyalty programs and reward cards have long been a way for brands to reward the spending habits of consumers. With inflation affecting the limitations of consumer budgets, brands have an opportunity to make reward schemes even more beneficial to customers. In particular, providing rewards for the everyday could be a way to support customers making difficult cutbacks within their daily shops. The yuu Rewards Club that recently launched in Singapore, for example, rewards consumers for everyday purchases, partnering with brands across many different sectors to widen the scope of compensation.

Alternative reward schemes, such as donating to a charity on behalf of the consumer or rewarding sustainable shopping habits, give brands an opportunity to demonstrate their goodwill this season, for both the environment and philanthropic initiatives.

Seasonal discounts

The festive period can be a burden on consumers wallets, as they rush to purchase last minute gifts for all the family. According to a survey bankrate.com, 41% of holiday shoppers are looking to reduce purchase costs through the use of discounts, sales, and coupons. Provide consumers with discounts that make purchasing gifts more convenient and cost effective, such as free last-minute shipping or gift wrapping.

3. Create moments of festive cheer

Through small seasonal signifiers or immersive retail experiences, brands can provide moments of delight for their customers throughout the festive period, building a long-term association between the brand and the holiday season and providing an additional service for customer satisfaction.

Small seasonal signifiers

Create a small update that rings in festive cheer. Each year in Japan, Christmas is celebrated with a Kentucky Fried Chicken (KFC) party barrel shared amongst family. This tradition has been going on since KFC’s successful Christmas party barrel campaign in the 1970s and rings in the sentiment of bringing friends and family together, despite Christmas not being an official festive holiday in Japan. This sense of tradition is part of the Christmas spirit and KFC Japan has been able to align its product and messaging with the values that we celebrate every year.

Similarly, the Starbucks red cup, which is brought out over the holiday season, may not bring real any value to consumers, it symbolizes a festive tradition in the same way that people delight in putting up their Christmas lights every year or tucking into their KFC party bucket.

As a testament to this, Pret brought back the beloved Christmas sandwich in July, as fans missed out on the turkey sarnie the previous Christmas, during the height of the UK’s covid restrictions. Bringing back the sandwich may not have been in-line with festive strategies, being out of season, but the joy that the sarnie represented was appreciated by customers across the region.

Create magical retail in-store experiences

Immerse customers fully during their festive shop to provide an element of escapism that adds another layer of value to the overall experience. In addition to Harrods’ Christmas World, which year on year provides a festive wonderland to shoppers, this year the world-renowned department stores is presenting ‘The Fabulous World of Dior’, featuring a Dior Café, enchanting in-store experiences and luxury window displays. Visitors will be able to enjoy an immersive luxury experience that exudes Christmas cheer and fuels a festive mood, whilst simultaneously promoting the brand.


loyalty cards
customer experience, CX
Christmas ads