The holiday shopping season is both the most magical and maddening time of year for consumers.
Some shoppers love the hustle and bustle of the mall during the holiday season — the halls decorated with garlands and lights, the various holiday-themed music blasting from storefronts and of course deals from their favorite retailers. But other consumers can’t stand malls, and crowds and sensory stimuli can make the shopping experience altogether overwhelming.
Holiday shoppers come in all shapes and sizes: Some shop exclusively online and others buy exclusively in stores — some shop early, some late and some all the time. According to data analytics firm Cardlytics, there are four clearly-defined holiday shoppers:
- Steady shoppers: those who make purchases throughout the holiday season
- Early shoppers: those who front-load their holiday gift shopping
- Black Friday shoppers: those who buy the majority of their gifts on that one shopping holiday
- Late shoppers: those who back-end the whole process
"While a lot of marketers have put all of their eggs in the Black Friday basket, the spend has really flattened out," Dani Cushion, chief marketing officer at Cardlytics, told Retail Dive.
As a marketer, then, it's not advisable to isolate any of these shopper segments. So what does each group have to offer and what are the best ways to target them? Here's what marketers should keep in mind in order to win over these shoppers.
1. Slow and steady wins the holiday race
Steady shoppers are the lifeblood of the holiday season. They might buy some gifts as early as October, they might go out for a gift or two on Black Friday, and maybe they’ll grab their last outstanding presents right before the holiday. No matter what the method, they’re shopping throughout the season and accounting for a large amount of holiday spend.
The steady shopper had an average transaction size of $52.59 in the 2015 season, according to Cardlytics' 2016 Holiday Retail Insights Report — a pretty significant amount when you consider how often they’re out shopping. They also accounted for 44% of season spend that year, the highest of the four groups by a long shot, spending nearly $1,200 per person.
"You really need to be able to, from a marketing standpoint, speak to them for the whole holiday period," Cushion said. "Because they’re not shopping at a particular time, keeping your marketing in front of them is really important, like a steady drip, so that when they do decide to shop, your marketing is in front of them telling them where to go."
The steady shopper segment is growing as the years go by — in 2016, the group accounted for 46% of season spend, up 2% from 2015, according to Cardlytics' data. Online shopping is partly to blame for that, according to Lauren Bitar, director of retail consulting at RetailNext.
"E-commerce has really empowered the steady shopper and that seasonal creep where people are buying things earlier and earlier," she told Retail Dive. "That’s because the value is really important to them rather than the feeling of 'it’s December, this is when I go Christmas shopping.'"
"Because they’re not shopping at a particular time, keeping your marketing in front of them is really important, like a steady drip, so that when they do decide to shop your marketing is in front of them telling them where to go."
Chief Marketing Officer at Cardlytics
Indeed, a recent study from Euclid found that 72% of holiday shoppers were more excited for Cyber Monday than any other end-of-year sale, and AlixPartners found that 92% of holiday shoppers plan on doing online research prior to making purchases. Data from Cardlytics supports the importance of e-commerce, with online shopping peaking during November and December of last year: the platform accounted for 19.5% of retail spend during those months, compared to 15.7% during the rest of the year.
One of the most important things about targeting steady shoppers, according to Cushion, is making sure to reach out early enough and across all kinds of channels, from a retailer’s mobile app to their website
"You need to make sure you’re shifting to the holiday frame early," Cushion said. "While that can be annoying in-store, it’s really important to be prepared early enough so that you don’t leave dollars on the table — that’s really crucial for the steady shoppers."
2. Early bird gets the Christmas ham
There’s usually at least one member of the family who has their shopping done months in advance. Whether it’s because they hate the holiday crowds or because they’re just incredibly organized, the early shopper segment is laser-focused on getting in and out of stores as efficiently as possible. Retailers that want to win with this crowd should have promotions in place early and devise a marketing strategy to take advantage of these shopping habits.
While the early shopping segment is relatively small — they accounted for 9.8% of holiday spend in 2015 — they are still an important group, with an average transaction size of $58.20 in 2015, per Cardlytics.
One of the ways to appeal to this group, according to Bitar, is to emphasize product scarcity. That could pull early shoppers out of their cocoons and convince them to buy whatever the product is now, rather than later. Sephora is just one example of a retailer that capitalizes on the urge to buy unique products early on.
"Every year they release their holiday specials earlier and earlier and they still sell out," Bitar said, explaining that retailers can use these 'scarce' holiday-specific products to convince shoppers to buy. "That’s a really good marketing technique."
"You can no longer market just around Black Friday and expect to meet and reach your spend goals."
Chief Marketing Officer at Cardlytics
Just as important, however, is for retailers to stress the convenience of shopping with them. Early shoppers are trying to find gifts for everyone all at once — and before the season gets too hectic. In the NRF’s 2017 Retail Holiday Planning Playbook, almost all (90%) of the NRF’s respondents said that some aspect of their experience convinced them to make a purchase that they were otherwise hesitant about, with the majority (64%) citing free shipping as the catalyst for their purchase, while half cited limited-time sales or promotions and 33% named buy online, pickup in store capabilities.
Those factors have 'convenience' written all over them and retailers would do well to advertise such services — or anything else that could make the process easier for early holiday shoppers.
"It’s the quick-and-easy method," Cushion said. "Being able to think, 'if I go here, I can get something not just for Aunt Suzie, but also Uncle Bob,' you know? If they see that they can pick up everything they need for everyone in their family and they can save money — done and done."
Cushion also recommends marketers capture this shopping demographic through loyalty programs, as well as by giving promotions before the Black Friday period.
"Forty percent of spend occurred in the first four weeks of the holiday season," Cushion said, referring to numbers from 2016. "It’s about hitting every single segment. You can no longer market just around Black Friday and expect to meet and reach your spend goals."
3. Black Friday, best Friday
That’s not to say that Black Friday doesn’t matter anymore — a recent study found that shoppers would spend 47% more this year on Black Friday and Cyber Monday, while another said that Black Friday would be the busiest online shopping day in history. But according to Cardlytics, the shopping day is losing its significance.
While last year, the shopping holiday garnered 19.8% of the season’s spend and $60.58 per transaction, that decreased to 16% in 2016 — suggesting that the stalwart shopping day may not be as important anymore.
"Black Friday and Cyber Monday purchases are decreasing year over year due to two factors: an increase in last-minute holiday shoppers and the introduction of earlier November deals," a report from Cardlytics states. "Major big-box retailers rolled out pre-Black Friday deals as early as Nov. 1 in 2015, contributing to an increase in pre-Black Friday shopping."
That being said, the Black Friday demographic is still a powerful one to market to and retailers looking to appeal to those shoppers have a variety of avenues through which to do so — whether it’s price, value or even social habits.
"People don’t generally go Black Friday shopping by themselves — it’s a social event," Bitar points out. "So any marketing you can do to support that, like a buy one, get one free for anyone you’re with, would be helpful."
"Having rich images and helping me understand what’s special is so key because we’re getting a million emails here."
Director of Retail Consulting at RetailNext
There’s a balance in Black Friday marketing between giving customers 'exclusive' deals and not making those deals so narrow that they isolate other shoppers. While brands can probably count on big fans, to an extent, to make use of the offerred deals — 88% of holiday shoppers actually enjoy receiving ads from their favorite brands — others might not take the step unless they have a reason to. To help solve that problem, Cushion recommends retailers make social deals, like those that Bitar mentioned, highly shareable in order to drive more traffic.
Still, when you get down to it, the majority of Black Friday shoppers are there for the sales.
"It’s all about price. It’s all about exclusive deals. It’s all about deep discounts and special things," Cushion said. "If you’re signed up for emails and you get one from J. Crew or someone that says 'we’ve got 60% off' — I’m there."
When it comes down to that kind of email marketing, though, retailers should consider the fact that customers are getting emails from all of their favorite brands. It becomes more about proving to the consumer why you deserve their business over someone else.
"Having rich images and helping me understand what’s special is so key," Bitar said, "Because we’re getting a million emails here."
4. Better late than no gifts at all
Holiday marketing doesn’t end when Black Friday winds down, though. As the crowds head home, laden with gifts, and retailers prepare for a return to normalcy, their marketing strategy should be ready to take on last-minute shoppers and all of the adjustments to websites, mobile apps and in-store offerings that entails.
"Things that resonate before and after Black Friday week are different," Ryan Deutsch, senior vice president of global customer success at Persado, told Retail Dive in September. While the marketing strategy building up to Black Friday should emphasize exclusivity, during the shopping day itself it should focus on price — and that changes yet again when the holiday is over.
Last-minute shoppers can’t be easily ignored, either. According to Cardlytics, they accounted for 27.8% of season spend in 2015 and had an average transaction size of $58.72. A good portion of that spend (16%) came in the last week before Christmas. They also make up a good third of holiday shoppers (33%), according to a study by Pepperjam.
"Anything that can help out a customer is going to help a retailer win."
Director of Retail Consulting at RetailNext
When reaching out to this group, retailers should emphasize convenience and be clear about what they can offer last-minute shoppers.
"From a store perspective, that’s figuring out how to extend store hours, things like expedited shipping," Cushion said. "Amazon has changed the game with Prime. Consumers have come to expect it so to compete in the space you have to know your delivery strategy."
Bitar added that with late shoppers, having more store associates on deck and gift-wrapping stations available for customers is important — "anything that can help out a customer is going to help a retailer win," she said.
Convenience isn’t the only piece of the late shopping puzzle, though. Online shopping continues to be a huge factor for shoppers — 84% said they’ll shop online this holiday season, according to PwC, and Cardlytics found that the spend at online-only retailers grew 16% between 2015 and 2016.
"Compared to the rest of the year, online share of spend increases an average of 3.6 percentage points during the holiday season," Cardlytics’ study states. "This growth is particularly strong at the end of the holiday shopping season, with nearly 15.4% of all online holiday purchases happening one week before Christmas."
That’s not to mention the growing desire for online wish lists — the NRF found that 63% of shoppers would like to use online wish lists to help organize their gift purchases, although only a quarter of respondents currently do. With that kind of interest, marketers should consider making those types of features available during the holiday season, as well as adjusting SEO to drive traffic off of popular searches like "good stocking stuffers" and "gifts for kids."
Most importantly, though, Bitar said marketers need to keep customers in the loop as the season winds down. Sending out updates about shipping offers and pushing store gift cards is a must.
"For the late shoppers, it’s really important to keep them informed," Bitar said. "Put it in huge letters on your website, too, so that they don’t fill up their cart and then find out it’s not going to get there in time."