A marketer’s guide to the 2023 holiday season
The holiday shopping season is right around the corner, and for many brands, this is the make-or-break time of year to capture sales and drive results. With record-high gas and grocery prices causing concern among consumers, retailers are not expecting pocketbooks to open as easily as they did during the explosive holiday shopping seasons of 2020–2022. Indeed, over half of consumers expect inflation or a potential economic slowdown to impact their2023 holiday shopping, while just under half will buy less this year according to a survey conducted by consumer-insights platform Numerator. CNBC predicts a “downbeat holiday spending season” in 2023, with retailers preparing for discount-heavy promotions targeting middle price-point items, as CEOs in the retail sector point to signs that the luxury market has peaked.
Amid retail headwinds and shrinking marketing budgets, what’s a brand (and their media partners) to do? Here are the key tactics and tools we recommend marketers consider ahead of this year’s holiday season.
Key tactics for marketers to employ
Fortifying a brand’s strategy is vital for marketers to capture and convert consumers actively shopping online. To craft an impactful plan, it is key to seamlessly integrate consumers’ behaviors and preferences into your brand’s approach to the holiday season. Here are three tactics to keep in mind:
1. Adopt “Buy Now Pay Later (BNPL)” options
Months of persistent inflation and uncertain economic conditions have led consumers to look for more flexible ways to pay for discretionary items like holiday gifts. BNPL options give shoppers additional buying power and the ability to plan payments around significant moments like bonuses or raises, while at the same time taking advantage of limited-time sales they otherwise may have passed on. BNPL usage increased 20% to 65% of July’s Prime Days purchases in 2023, totaling just under $1B in revenue as popular gift-giving categories like apparel, electronics, and furniture/home decorations continued to be the most popular purchase categories. Amid sustained periods of high interest rates, BNPL options become even more valuable to cash-strapped families and individuals. Adopting BNPL options will increase the likelihood of consumers’ purchases, especially during limited-time sales.
2. Integrate “Buy Online, Pick Up In-Store (BOPIS)” systems
BOPIS options exploded onto the scene in 2020 as brick-and-mortar stores navigated lockdowns and social-distancing rules. It has now become a mainstay for many retailers, with Salesforce reporting that one-in-five orders were fulfilled via BOPIS during the 2022 holiday season. Brands that require customers to enter their retail location stand to gain even more incremental sales from this system. With the customer already in the store, the increased foot traffic can result in incremental in-store sales and drive new levels of success for the brand.
3. Be a part of viral moments
While every brand would love to go viral, and many try to, most are doomed from the get-go. Why? Viral moments, by nature, are moments that happen organically, and brands that try to force the issue often fall flat — especially brands that are trying to leverage these moments to engage with Gen Z, who value authenticity over everything. In fact, the vast majority of Gen Zers reported authenticity is more important than any other personal value tested, with 92% indicating being authentic and true to oneself as being extremely or very important, increasing 16 percentage points from pre-pandemic levels. One way for brands to tackle this challenge is to be the comment underneath the viral post. This is a great way to let the brand shine through in an authentic way and garner a ton of (free) awareness. These impressions from a single comment have the potential to lead to more traffic, and hopefully, more sales.
Helpful marketing tools to consider
Once a brand has their holiday strategy boxed up with a bow, it is important to review the tools available to bring this vision to life. What are the best tools of the trade? To gear up for the season, here are a few marketing tactics to consider to amp up your brand’s ecommerce presence.
1. Google’s Performance Max
Performance Max, Google’s omnichannel upgrade to smart shopping campaigns, will be an essential piece to any retailer’s holiday ecommerce strategy. Performance Max combines shopping ads with full-funnel ad inventory, including display, Youtube, and Gmail, which gives campaigns a multitude of additional user touchpoints to assist in driving conversion. Our experts have assisted clients with upgrading smart shopping campaigns to Performance Max campaigns and have already seen impressive results. In fact, our experts have seen the clients that have made this change experience increased revenues up to 16% without reducing return on ad spend, a truly impressive feat.
Existing smart shopping campaigns will be automatically upgraded to Performance Max campaigns in fall 2023. In the meantime, we recommend manually updating the campaigns to ensure asset groups and product lists are upgraded accurately.
2. Google’s Demand Gen campaigns
Currently in beta, Demand Gen campaigns are Google’s newest AI-powered offering. These campaigns target users in the upper and mid funnel by leveraging the best-performing video and image assets across Google’s most visual, entertainment-focused touchpoints, such as Youtube, Youtube Shorts, as well as the Google Display and Discovery network. A key benefit of Demand Gen campaigns is the ability to tailor audiences via new “lookalike segments” based on existing customer lists or customer relationship management data.
As souring economic conditions put marketing budgets under a microscope, it can be a more cost-effective solution to retain existing customers, rather than to prospect new ones in the face of shrinking budgets. Applying Google’s Demand Gen campaigns in conjunction with Performance Max campaigns allows brands to stay top of mind for past customers and ward off competitor conquesting.
3. Meta’s Advantage+ shopping campaigns
Social media ads are generating an increasing number of online sales, with traffic referrals from social media platforms growing 27% YoY in the first quarter of 2023. The effect of social media on ecommerce cannot be understated, with more than half of surveyed consumers saying they went to a physical store to see or buy products they discovered on their social feed.
The highly visual nature of social ecommerce ads makes it a powerful full-funnel approach, taking consumers straight from the awareness stage to the checkout page. And Meta’s Advantage+ shopping campaigns do exactly that. This tool streamlines campaign creation by leveraging machine learning to determine what creative is most
effective to a specific user at a specific time and removing the need to set targeting parameters manually. This enables marketers to scale their holiday shopping campaigns at an impressive rate.
4. TikTok’s evolved paid search offerings
It is clear TikTok has claimed its spot at the table for its impressive effects on ecommerce and social shopping performance. But, it has been reported that TikTok has search ads listed as part of its “2023 Platform Priorities.” While search ads were already introduced in August, brands are not able to bid on specific keywords for advertising purposes just yet. But, introducing keyword-level targeting to a platform that has demonstrable social ecommerce value creates a valuable opportunity for marketers to consider. Being an early adopter of TikTok search ads will give brands a headstart in share of voice for the ever-coveted Gen Z audience.
If, and when, TikTok releases keyword-focused ads, a strong measurement strategy will be key. Marketers should ensure the key performance indicators are aligned to business objectives to accurately judge performance. For example, if conversions are the goal, TikTok paid search performance should be compared to Google paid search or other low-funnel platform performance to decide where incremental holiday dollars should go. If TikTok search ads are earning stronger return on investment, marketers can more confidently invest incremental budgets. If a brand is looking at TikTok paid search as an awareness or consideration play, consider comparing performance to paid social or display media.
So now what?
Although green leaves are still clinging to trees, now is the time to start planning for the holiday shopping season. Ensure existing digital strategies are utilizing the most up-to-date campaign types like Performance Max, Demand Gen, and Advantage+ shopping, as these campaigns need about a month to ramp up — don’t set them live the day before Black Friday! By evolving your strategies now, brands can enter this holiday shopping season on the right foot and see new levels of success.