Look into the Wallet of the 2022 Holiday Shopper
By Bobby Johnson
November 16, 2022
By Bobby Johnson
November 16, 2022
Holiday shopping is obviously of huge importance to most retail brands, making up a significant chunk of yearly revenue. But, when shoppers feel more crunched than ever, how are they going to spend those vital holiday dollars?
Inflation has risen to 7.7% as of the time of this writing, up almost a full percent from last year and up over 6x what it was in 2020. By contrast, average hourly earnings are actually down for employees in the US. The family wallet is looking slimmer than ever, and with Christmas approaching, there’s some cause for alarm.
However, let’s not get too gloomy–’tis the season and all that. In looking at how consumers feel about their spending this year, we can learn how to successfully market the products, services, and brands that can help them at the right prices.
And after looking at the data, it turns out what shoppers are really looking for is a way to feel less scared about shopping.
According to YouGov’s “Holiday Habits and Attitudes Analysis,” the number of Americans who believe their financial situation is worse compared to last month has increased by 10% in the past year.
Their analysis of the data shows that consumer worries about their current financial situation track awfully close to the US rate of inflation.
It isn’t a perfect one-to-one correlation, and there are outliers, but it’s pretty clear from the comparison in the chart that inflation and financial fear go hand-in-hand.
When asked if inflation would impact their holiday spending this year, almost three-quarters said it would to some degree, with “major impact” making up 30% of the total answers.
Those consumers deemed “inflation sensitive” in the survey were showing plans to spend less and shop more carefully. 59% of those sensitive to inflation said they’d be buying fewer items this holiday season, compared to the 22% of the less sensitive who said the same thing.
Discounted items, sales, second-hand shopping, and “buy now pay later” all tracked highly with those holiday shoppers who had inflation on the mind.
Strangely enough, the number of people who believe their financial fate will get worse and the number of people who believe their financial fate is getting better are both growing in number.
There are 5% more consumers that believe their finances will improve in the next 12 months compared to the same time last year. Conversely, there are 2% more people that answered that their financial situation will likely become worse in the next 12 months.
So, combined with the data from #1, it seems like consumers aren’t doing as well as they did last month, but are somewhat optimistic for the future. This is absolutely good news for holiday spending, which is generally more about how consumers feel than the exact number in their bank account.
Shoppers aged 18-29 and 30-44 showed the most optimism for their financial future, with 41% and 44% respectively saying they expect their wallet to get a bit fatter in the next 12 months.
This tracks with a GOBankingRates survey that found that those same age groups were also not as keen as their older counterparts to scale back their holiday budgets this year.
Shopping and “eating too much” are both trending down this Thanksgiving and Black Friday, which makes perfect sense considering the economic woes many families are fearing.
YouGov’s “Holiday Habits and Attitudes Analysis” found that spending and eating have been on a downward trend since 2018, while “decorating,” “spending time with the family,” and “spending time with friends” have all taken their place.
Brands that can lean their marketing on enhancing quality time with friends and family are going to have a big advantage this holiday season.
YouGov’s data showed an interesting trend: the most inflation-concerned shoppers are also the ones who seem to want a personal connection with brands and products.
For instance, 80% of the inflation-sensitive shoppers said they plan to shop local, and don’t mind paying extra for products they perceive as being of good quality. That’s a fascinating point there, showing that money isn’t the only factor even for those worried about inflation.
Secondly, it was the inflation-sensitive shoppers who showed a remarkable distrust for advertisements. 57% said they didn’t trust advertisements on TV (compared to 48% of the non-inflation sensitive), and 67% said they are actively “creeped out” by personalized ads (compared to 49% of the non-inflation sensitive).
Together, these data points make a strong case that brands, products, and shops that make inflation-sensitive consumers feel safe and heard are going to pick up more holiday shopping business.
Marketing to the cash-strapped isn’t always easy, but in this case it may be a matter of combining the right product with messaging and experiences that holiday shoppers will find helpful to the lives of their loved ones. Messages and experiences that relieve some of their fear about shopping.
Let Inspiring Marketing help you create a campaign that can reach Christmas shoppers of every financial situation. With trust in ads and TV lower than ever, experiential marketing may be the key to connecting with shoppers this holiday season.
Source: YouGov’s “Holiday Habits and Attitudes Analysis”
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