Christmas—it’s the most wonderful time of the year. For brands and agencies, the holiday season offers a significant opportunity for sales growth.
This year, however, things might look different. With pressures like high interest rates and inflation, consumers are more cautious and adjusting their shopping habits.
As a result, marketers and agencies need to evolve their communication strategies. Instead of focusing on sweeping store-wide sales, consumers are now seeking brands that genuinely care about their needs this holiday season.
So, What’s New?
Consumers feeling the pinch isn’t new, but this year, notable changes are emerging in how they’re planning to spend their hard-earned cash.
New research from unified data and marketing automation platform Klaviyo found that consumers aren’t simply cutting back across the board. Instead, they’re being more strategic, reining in spending in some categories and halting larger purchases to prioritise discretionary buys—ensuring there’s still money for holiday gifting.
Nearly nine in ten of the more than 8,500 consumers surveyed by Klaviyo said inflation is causing or will soon cause them to reduce spending. Plus, two-fifths of consumers are scaling back large purchases, and two-thirds are tightening their budgets due to high interest rates in Australia and globally.
Despite these financial pressures, consumers remain undeterred. Four-fifths still plan to spend the same or more this holiday season, even with rising prices for goods and services.
However, consumers are changing when and how they buy, rather than how much they spend. Klaviyo’s research predicts most holiday shopping will occur between October and November, with most consumers preferring to hear about offers during that time. In contrast, only 14 per cent shop consistently throughout the year.
Consumers are also rethinking their relationships with brands during sales. More than ever, they value exclusivity and special treatment. Brands don’t need to overhaul their discounting strategy—just reframe it.
“While retailers have traditionally focused on building hype through offering blanket discounts, it does not make financial sense to boost revenue at the cost of profit this holiday season,” said Adam Sharon-Zipser, Managing Director of Sydney-based ecommerce and paid media agency Elephant Room.
“We’re now seeing a shift from brands maximising volume toward more targeted promotions that maximise value and protect margins. Brands are offering bigger discounts on less popular or older stock, while maintaining the value of bestsellers and fast movers.”
Download the full report here.
Here’s How You Can Supercharge Your Sales This Holiday Season
Your first priority should be to get your first- and zero-party data strategies in place. With 44% of consumers preferring to shop online, and many planning to shop both online and in-store, now is the perfect time to gather actionable customer data and personalise their experiences.
“Understanding customer intent is crucial to standing out from the clutter of holiday sales noise,” said Paul Pritchard, Group CEO of Melbourne-based complete commerce agency Overdose Digital. “With tightening privacy regulations, data strategy, SEO and personalised marketing messages should be par for the course nowadays for brands looking to grow in an era of uncertainty.”
“Customer behaviour and historical buying data will help brands communicate the right messages to the right people who have the intent to purchase. Being purposeful with promotions will help brands achieve financial targets while still keeping their customers happy.”
Consumers are moving away from one-to-many channels like TV. Instead, social media and web surfing—both used as one-to-one channels—rank as the second and third most influential for holiday gift purchases.
Email and SMS marketing take personalisation even further. Whether incentivising online sales or driving in-person retail bundles, marketers can use these channels to reach consumers with automated, tailored messaging based on past purchases, delivered directly to the right customers.
Nick Whiteacre, Managing Director of Auckland-based digital marketing agency Calibrate explained how brands can make the most of all the channels available to them, whilst still hitting the core consumer desire for individualised messaging and discounts.
“Brands can generate buzz by dropping hints about upcoming offers through teaser emails or social posts, building anticipation and urgency,” he explained. “Invite customers to start planning their purchases by wishlisting or bookmarking gift ideas. Lastly, offer early access to sales for VIP customers who sign up for SMS notifications.”
While creating these messages via email and SMS may seem challenging, Klaviyo’s robust segmentation tools make it easier. Sydney-based fashion brand MESHKI, for instance, transitioned from a “batch-and-blast” SMS strategy. Klaviyo’s multi-channel customer profiles gave the brand a holistic view of each customer’s interests, purchase history, and interactions, allowing the team to create tailored messages instead of one-size-fits-all communications.
Individualised messaging shows customers that brands care and understand the economic challenges they face. For example, brands can offer discounts on frequently ordered products. This empathetic approach to marketing will humanise the brand, build positive associations, increase loyalty, and boost customer lifetime value.
After adopting Klaviyo, MESHKI increased revenue from email campaigns by more than 160 per cent during sales periods—growth anyone would be happy to unwrap this holiday season.
Download the full report here.
To learn how you too can make this holiday season one to remember with smarter email, SMS, and analytics—book a demo with Klaviyo today.
