How retailers can win over shoppers during the holidays

With one in five consumers looking to buy holiday gifts around Black Friday, the retail holiday offers a massive opportunity for retailers to foster loyalty.

“Black Friday is just a huge way to maximize the opportunity because you're going to have as many visitors and customers at that peak time as you can,” Joanna Milliken, CEO of SAP Emarsys, told sister publication CX Dive. “The idea is to make all of those interactions count and make sure that you're delivering [not only] on the quality of the products or cost of entry, but that you're delivering an improved experience.”

Half of U.S. consumers say they will remain loyal to the companies they purchase from on Black Friday, according to a survey of 4,000 U.S. consumers released by SAP Emarsys, an omnichannel customer engagement platform. Tailored experiences foster more loyalty, the survey found. One in four consumers say they stick with brands that deliver personalized experiences and messaging based on their individual preferences.

The opportunity to drive loyalty “often starts with making sure that you're meeting your customers where they are,” Milliken said. “You've got to meet them where they are — on that mobile device. We know when they do that, they're also more likely to convert.” 

Just over half of consumers use mobile apps for shopping, the survey found. Nearly half say they would use mobile apps more if they received personalized messages; that grows to seven in 10 if a brand offers rewards or incentives.

Retailers can build loyalty by directing a customer to shop on a mobile app, according to Milliken. 

“If you can get somebody to download the app, that's a whole different level of commitment than browsing a site oftentimes,” Milliken said. “They’re giving up more information, and there's a different expectation of a give and get right between the brand and the customer.”

To keep those customers coming back time and again, it’s up to retailers to continue giving them value.

“Even if they come in wanting a discount, or they're kind of coming in for that incentive, [businesses] still have to maximize that opportunity,” Milliken said. “It’s taking what would be transactional and finding a way to just add personalization and continued value.”

To encourage consumers to shop early, Macy’s launched its 100 Days to Christmas marketing effort that features a curated list of 100 unique holiday gifts and ongoing sales events ahead of the holiday season. The department store promised to offer more than 40% newness across its assortment, according to a press release.

“Macy’s shines during the holidays and this year our customers will be inspired by newness, the latest trends and exclusive brands,” Nata Dvir, Macy’s chief merchandising officer, said in a statement. “Our curated product will get customers ready for the season, whether they are hosting dinners, dressing up for a holiday party, or looking for the best holiday gifts, we have the most wonderful discoveries to help them celebrate in style.”

The retailer is also boosting its in-store offerings. Following its traditional Macy’s Thanksgiving Day Parade in New York City, the retailer will roll out its nationwide Santa tour that will include a new Santa photo experience debuting at Macy’s Memorial City in Houston and immersive experiences through Santa’s village layouts at the New York and Chicago locations. 

And for the second consecutive year, Macy’s Herald Square flagship will house a Holiday Square experiential market in the store’s 15,000-square-foot lower level featuring customizable gifts, along with ready-to-eat on-site food vendors including hand-painted sugar cookies, freshly made donuts, tea and hot chocolate, desserts and sandwiches. The market will run from Nov. 1 to Jan. 4.

Macy’s State Street store in Chicago this year will debut its own version of a Holiday Square Market that runs from Nov. 26 through Dec. 24 and features locally grown produce, seasonal flowers and festive food done with a French cultural flair.

The 100-day marketing effort comes after Macy’s posted its first growth in 12 quarters. While net sales for the quarter fell 2.5%, comps rose nearly 2% during the second quarter. 

Macy’s is not the only retailer to jump-start holiday promotions. Amazon announced its Prime Big Deal Days event would return on Oct. 7 and Oct. 8 with some early sales already underway. Target will have 20,000 new products ready for holiday selling, double the amount of the 2024 season, and host a Target Circle Week deals event from Oct. 5 to Oct. 11.

Forecasts for 2025 holiday retail sales are a mixed bag. Bain & Company projects that net sales will grow about 4%, with in-store sales expected to increase 2.75%. Others, like PwC, expect holiday sales to decline. That firm projects sales during the period will fall 5%, driven by decreased spending from Gen Zers.

U.S. consumers kept buying discretionary goods in August — as they have all year — but signs indicate they’ll be tough customers at the holidays.

Retail sales in August rose 5.5% in the segments covered by Retail Dive, fueled in part by back-to-school shopping. Electronics sales rose 2.6%; sporting goods 4.4%; and apparel soared 7.6%. Even home goods sales rose nearly 3%.

Some of that was likely early spending that could lower next month’s results, according to Fitch Ratings Senior Director David Silverman. But August’s headline number is undermined by elevated prices from tariffs, as volumes barely rose, according to Wells Fargo and GlobalData research. For the four weeks ending Aug. 30, unit sales were flat or down across all retail segments, according to Circana.

For the back-to-school period, the picture is even worse: For the eight weeks ending Aug. 30, dollar sales fell 1% year over year and unit sales fell 3%, Circana found.

“Both the overall and core numbers are respectable and show little sign of a consumer in major distress,” GlobalData Managing Director Neil Saunders said in emailed comments. “However, the volume numbers and some of the underlying metrics we track – such as shopping around and consideration times – do indicate that greater caution is starting to come through and that consumers are being very considered and deliberate about their spending.”

Inflation and employment are on people’s minds. Consumer sentiment slipped for the second straight month over concerns about job security, prices, tariffs and prospects for U.S. businesses, according to research from the University of Michigan. Unemployment has indeed ticked up, while companies have slowed their hiring, a double risk to the economy, according to UBS economists.

Right around the holidays, inventory affected by tariffs will be hitting shelves, and that is likely to weaken sales, according to Fitch. Just 22% of shoppers plan to spend more at the holidays than they did last year, according to an Experian survey.

“We believe keys to success remain a sharp understanding of a retail brand’s relationship with consumers, good negotiating positions with vendors, and a strong balance sheet and cash flow profile to withstand near term volatility,” Silverman said.

Another is a better understanding of consumers’ approach to seasonal shopping these days, according to Marshal Cohen, chief retail industry adviser for Circana. In particular, the season is longer for shoppers than for many retailers, he said.

“Consumers are charting their own spending path and changing the way retail seasons are measured. There is a new cadence to shopping that goes beyond traditional retail calendars or seasons,” he said. “Instead, shifts in consumer lifestyle, shopping behavior, and media influence are behind today’s retail performance – a dynamic that marketers need to prepare for through the 2025 holiday shopping season and beyond.”

Prime Big Deal Days is set to return — this time on Oct. 7 and Oct. 8. 

The event is Amazon’s kickoff to the holiday shopping season. Some promotions are already underway, including early sales on a curated list of holiday gifts, Amazon private brands, Amazon devices, Kindle books and grocery savings, according to the company. 

Other deals include the new Amazon Essentials denim collection starting at $15, 40% off festive decor, fall fashion starting at $10 and Halloween costumes and accessories from $5.

Prime Big Deal Days’ discounts can also be found on popular brands such as Samsung, Dyson, Clinique, Beats, KitchenAid and Milk Makeup. 

"We're excited to help Prime members save money this year with some of Amazon's best deals of the season so far, including amazing deals on an expanded selection of Holiday Amazon Exclusive items,” Carmen Nestares, vice president of North America marketing and Prime tech, said in a statement. “With Prime Big Deal Days, members can check off their holiday lists early and make the most of their holiday budget."

The shopping event follows Amazon’s July Prime Day, which was expanded to four days for the first time this year. The summer event resulted in record sales and more items sold compared to any previous four-day period that included a Prime Day event, according to the company. Amazon previously declined to provide Retail Dive with specific numbers related to those results. 

There are currently more than 200 million Prime members worldwide, per the company. Amazon recently announced that, as of Oct. 1, it is ending legacy access to the “Prime Invitee” program that allows Prime members to share free shipping with people outside of their households.

In its latest quarter, Amazon’s online store net sales were up 11% year over year to $61.5 billion and physical store sales increased 7% to $5.6 billion. 

Amazon’s retail business, while growing, is being increasingly outpaced by the company’s other endeavors like advertising, subscriptions and marketplace seller services. 

J.C. Penney started the holiday season early with the launch of the third season of its “Really Big Deals” program. As it did last year, the retailer kicked off the campaign during “Thursday Night Football” on Amazon Prime Video, and a new deal will be revealed every Thursday on the streamer’s gameday programming through Christmas.

The department store chain thinks its new deals are so laughably good that each promotion will debut with an individual spot that finds actual comedians riffing on products in a J.C. Penney store-turned-comedy club. The campaign was created in-house, with all 13 original spots hosted by returning brand ambassador Shaquille O’Neal.

“Each week, we’re going to have a different comedian do a short routine born out of real world observational humor that is so universally relatable about everyday things in our homes, our lives and our wardrobes,” said Marisa Thalberg, executive vice president and chief customer and marketing officer at J.C. Penney parent Catalyst Brands.

Along with the return of “Really Big Deals,” J.C. Penney launched an exclusive collection from legendary designer brand Bob Mackie that looks to deliver Hollywood glamour at low prices. The collection comes as Mackie designs have been embraced by pop stars Taylor Swift and Sabrina Carpenter — fortuitous timing for a retailer looking to reclaim its place in culture.

Thalberg, who officially joined Catalyst Brands in January, has been aggressively marketing J.C. Penney as it continues work on a $1 billion turnaround plan. The executive discussed her efforts and how marketers can engage holiday shoppers amid economic uncertainty during a virtual event co-hosted by Marketing Dive, Retail Dive and Supply Chain Dive.

Editor’s note: The following Q&A draws from a larger conversation that occurred during a virtual event and has been edited for clarity and brevity. You can register here to watch a replay of the full event.

MARKETING DIVE: How are you expecting the macro environment to affect retail holiday sales this year?

MARISA THALBERG: We all read these reports and get the best macroeconomic data and retail data we can. But no matter what, you just have all the best intuitive and data-driven ways to play to win, and in that sense, I don’t know that it materially changes your game plan.

I would be remiss not to mention the additional pressure that every retailer is feeling because of the unexpected pressure of tariffs, and that really has created a whole new level of discomfort and tension in the business. Trying to navigate that, we always want to put the customer at the forefront of our thinking. 

As a marketer, along with the rest of your business partners, you have to think about managing to the different beats of the season, thinking about where people might be pulling forward their spend, where they might be actually holding back and waiting until the end, and then just navigating through that.

During tough economic times, how are you marketing around delivering value beyond just price?

It really became most poignant to me when I first went from from luxury beauty to fast food when I became the CMO of Taco Bell. It was sobering and important to understand how real Americans live — so many people truly live paycheck to paycheck — and the reality that someone actually might be navigating a decision between a few gallons of gas and buying some tacos is the reality of more people than not. 

If you’re marketing to the masses, you have to be in touch with that. I think there can be a real tendency sometimes, especially if we get in our little coastal worlds of marketing, to forget that there is a profound difference between what people can afford and what they want. I try to never lose sight of that.

People want value without compromise, and value is not just price. Price is one function of value. People would not buy an Hermès Birkin bag if value were only a dimension of price. Sometimes we actually forget that. 

For me, the real equation in marketing, the value of J.C. Penney, is what I call that one-two punch: First, I want to wow them with what we’ve got [and] then the fact that we really help you get these things at a much better price than they deserve to cost. That is a value proposition to me.

How can marketers adopt emerging channels beyond traditional advertising to connect with consumers?

You have to take a media-agnostic approach and allow your insights to guide you [to] the customer that you’ve had today and how you are going to continue to reach them. Where is the opportunity to bring new customers in? Those may not be exactly the same thing from a channel strategy. 

I’ll give you an example of being agnostic when we talk about modern media. Direct mail really works with some of our customers, so I have a responsibility to incorporate that into my strategy. It doesn’t mean it’s the main thing we do or [that we] do it for all people, but it means it’s part of our mix. At the same time, not playing on TikTok wouldn’t be responsible for how we can reach younger, emerging customers who we want to have in our customer base. 

When we talk about playing across the spectrum of media channels, I love how we’re showing up in social more and more. We’ve been leaning in more on audio. We’ve been integrating into podcasts, we’ve been marketing on Reddit. The measurement is still a bit of a thorn in all of our CMO sides relative to where we wish it would be. But nonetheless, being able to orchestrate a comprehensive program that plays a lot of different musical notes, so to speak, is not just a good idea — it’s essential.

Artificial intelligence remains the elephant in the room. Is there one facet of AI that has your attention as an opportunity for marketers during the holiday season and beyond?

It’s very hard for me to reduce it down to one thing, and I don’t know that it’s something really at this point, specific to holiday. It’s more just thinking about how marketing and business in general is transforming through AI. 

It was true of digital and social media back in the early 2000s: You have to have confidence and you have to be humble. No one knows it all, and you have to be curious and learn and try. I think creative transformation is certainly a key area of focus for us, but it’s going to touch a lot of everything. It’s already impacting how we think about media. It’s even going to touch a real world physical activation that we’re doing over the holidays. 

I don’t know that it’s going to be totally self-evident right away to consumers, and that’s okay. I think it’s more about getting really smart about how it’s impacting our ability to do business and get the work done.

Walmart and Target are joining Amazon in bringing back their early holiday events, with special perks for their subscription members.

Walmart’s savings event, dubbed Walmart Deals, returns from Oct. 7 through Oct. 12. Walmart+ members will be able to access the event five hours earlier on Oct. 6 and all shoppers have several delivery options, such as same-day and express services.

The company has deals on toys from brands like Hot Wheels and Lego, seasonal decor such as artificial Christmas trees, home electronics such as smart TVs, and more. 

And Target’s previously announced Circle Week event, from Oct. 5 to Oct. 11, features deals spanning from everyday essentials to holiday merchandise. For example, the mass retailer will have 40% off Halloween costumes and will offer Circle 360 members first access to Shea McGee holiday ornaments. Circle 360 members also get access to sales 24 hours early.

The announcements indicate that the holiday shopping season continues to start earlier in the year. Walmart's announcement emphasized that “October has become a critical starting point for holiday prep.” The company’s CEO Doug McMillon sounded positive about the upcoming holiday period during an August earnings call.

“Back-to-school is usually something of an indicator of how the holidays will go, and we feel good about how it went for us in terms of units and dollars sold and inventory sell-through at both Walmart and Sam's Club,” the executive said on a call with analysts. “We had our Walmart U.S. store managers together last week for our holiday planning meeting where they got to see many of our new items in pricing for the upcoming season. We liked what we saw and heard, and we like our position for the back half of the year.”

A solid H2 performance would add to Walmart’s successful quarters so far this year. In Q2, the company saw revenue jump 4.8% year over year to $177.4 billion, while consolidated net income improved 51.8% to $7.2 billion. Walmart raised its full-year outlook for net sales, now expecting growth between 3.75% and 4.75%.

For Target, a successful holiday period is necessary to help right the business following declining sales and traffic.

Target's second quarter net sales declined 0.9% year over year to $25.2 billion, with both store and digital comps down in the period.