Navigating shifting tides of 2023 holiday shopping trends

In this climate of economic uncertainty, where financial prudence is top of mind for many consumers, retailers are seeing a notable transformation in shopper behavior.

Our team recently conducted an extensive survey including over a thousand participants across the United States, aiming to gain deeper insights into this year's holiday shopping mindset. The findings highlighted a shift in how people are approaching their holiday spending, particularly concerning gifts and holiday indulgences.

This year, holiday shoppers are reevaluating their spending patterns, across not only gift-giving but the entire holiday experience. For retailers, understanding and adapting to these evolving consumer needs - quickly — is imperative.

Consumer behavior

Financially speaking, people are exercising restraint this season, with approximately 30% of surveyed individuals reporting a reduced holiday shopping budget compared to the 2022. Additionally, roughly 33% intend to scale back their purchases of holiday-themed or seasonal items, suggesting a departure from more extravagant decorations and themed products.

Several factors underpin this change in behavior. Nearly half, 46%, of respondents expressed a desire to save money and exercise financial prudence during the holiday season. Economic uncertainty looms large in the minds of 39% of respondents, while life changes, such as job losses, renewed college debt repayments, or income reductions, are influencing the spending choices of a whopping 38%. The impact of inflation on purchasing power is still affecting around 31% of individuals, and nearly 29% are prioritizing essential expenses over discretionary spending.

Despite these tightened purse strings, the holiday spirit remains intact. People are still planning to purchase gifts but are doing so strategically, seeking discounts and deals. A resounding 76% identified price as the most influential factor guiding their online shopping decisions.

When it comes to holiday gift purchases, consumers are becoming more astute. A notable 66% of respondents will actively seek out product discounts this holiday season, an increase from previous years.

Moreover, 56% plan to shop in discount stores and 42% are eyeing specific sales events such as Black Friday and Cyber Monday.

However, price considerations are just one facet of the shopping mindset. Shoppers are conducting thorough research before making a purchase. They're checking product reviews and ratings online (57%), exploring retailer websites and apps (55%), seeking recommendations from friends and family (45%), visiting physical stores (41%), and even soliciting advice on social media (16%).

Online search engines (64%) and coupon websites or apps (48%) are the preferred resources when finding specific discounts on products. Additionally, consumers turn to store loyalty programs (38%), retailer websites or apps (38%), retailer newsletters (37%), and social media (34%).

What findings reveal

What do these findings mean for retailers? It's yet another call to adapt and personalize.

Shoppers are on the lookout for wallet-friendly options and optimal deals. Retailers can capitalize by timing their sales and discounts precisely, crafting campaigns that feature personalized recommendations and discounts, and offering rewards to loyal customers to help them save.

When every shopper dollar counts, retailers can truly help by producing pertinent, informative content. No matter the medium - email content, newsletters, tailored ads, or engaging social media content - maintaining a connection and delivering value can be game-changers in moving a shopper from undecided to decided.

Equally important for retailers: enabling informed purchases. High-quality, transparent imagery matters — 88% of consumers attest to this. Retailers can build confidence in customers, even during financially challenging times, by automating product description pages and presenting more, better visuals, like showing products from many multiple angles, with features like 360° spins and augmented reality to help the shopper put the product into their own life.

In short, as shopper spending undergoes yet another transformation this year, retailers hold the key to making this holiday season beneficial (and profitable) for their shoppers, their shareholders, and their suppliers' brands by adapting to the shopper's life and her perception of value.