With about a month to go until Black Friday, marketers are wondering how this year will stack up against previous holiday seasons. Amazon’s Prime Big Deal Days, which ran October 8 and 9, saw lower U.S. sales than last year. This runs counter to an Adobe projection of a record-breaking ecommerce holiday season.
A closer look at Amazon’s October promotion shows a silver lining, however. Despite extreme weather in the U.S. Southeast this month, promotions in the U.S. and globally seemed to work well with customers, especially when prices were cut. Marketers should take advantage by testing promotions in the lead-up to Black Friday and beyond to see which deals stick with holiday shoppers.
Dig deeper: 2024 online holiday spending set for record year with $240 billion in sales
A look at Prime Big Deal Days
Globally, non-Amazon retailers had flat sales growth compared to last year, according to Salesforce. In the U.S. retailers saw a 5% decline in sales. Europe, on the other hand, was up 9% YoY.
Amazon fared better for conversions than its U.S. competitors, who held promotions the same week. Ecommerce tech solution PriceSpider measured conversion rates on October 8 and found Amazon (12.6%) far ahead of Walmart (8.1%) and Target (4%).
U.S. web traffic was down 2% for October 8 and 9, Salesforce said. Retailers weren’t driving the same traffic or purchases as they did last year. A contentious election and bad weather in the Southeast appear to be key factors.
“Amazon Prime Big Deal Days performance was lower than expected this year, most likely due to recent weather events and consumer uncertainty around the upcoming U.S. election,” said Caila Schwartz, director of consumer insights at Salesforce. “And while discount rates were more enticing than last year, retailers still stayed conservative in preparation for robust Cyber Week deals, contributing to the fall in overall results.”
Europe’s sales numbers raise the possibility that U.S. shoppers will be in a buying mood after Election Day.
Gift buyers seeking deals
Prime Big Deal Days offer a glimpse into shopping trends for the rest of the season. Thus far, the discounts are bigger, according to Salesforce — good news for shoppers and a signal to retailers to consider slashing prices.
During Prime Big Deal Days, U.S. discount rates were up 4% year-over-year, for an average discount rate of 21%. Globally, discount rates rose 9% over last year. The global average this year was 18% for Prime days.
The highest discounted categories globally were general apparel (average discount 27%), electronics and accessories (20%) and health and beauty (17%). The electronics category saw a significant increase in discount rate, up 25% year-over-year.
In the U.S., the biggest discounts were in general apparel (31% average discount), health and beauty (20%) and food and beverage (13%). The health and beauty discount rate was up 27% YoY. Food and beverage’s discount rate was up 23% YoY.
Discounts proved to be an effective tool to drive sales for discounted categories. Here are the top performing categories globally:
- Electronics (+36%).
- General apparel (+36%).
- Health and beauty (+21%).
Preparing for Cyber Week and beyond
Did Prime deals in October catch shoppers off guard? Likely not. This is the third year Amazon launched an October Prime promotion, and other retailers followed suit.
It’s still possible sales will reach or exceed Adobe’s projection for Cyber Week — over $40 billion in sales for those few days. Less than a third of customers in all income brackets only buy gifts in December. Many more budget their gift purchases months in advance or even for year-round purchases.
As Cyber Week approaches (November 28 through December 2 this year), digital marketers shouldn’t skip over Black Friday and focus only on Cyber Monday, according to Omnichannel marketing platform Skai.
“Black Friday was the biggest shopping day in 2023, as data reveals it dominated the Cyber Five with 17% higher retail media spending and 21% higher ad-driven sales than Cyber Monday,” said Megan Harbold, Skai’s VP strategy and growth. “However, marketers need to be aware of how consumer sentiment around timing for holiday promotions is evolving this year to inform their Black Friday strategies.
Seventy percent of consumers see Black Friday as a key date, according to Skai research. Additionally, 60% of consumers surveyed said they’d consider waiting until January for better deals.
Dig deeper: TikTok users have post-holiday shopping plans
“With this in mind, marketers should test early promotions to ramp up for their Black Friday deals to cater to different audiences and drive sales,” said Harbold. “They may also want to explore extending their promotions and media support beyond Black Friday alone to capture potential post-holiday deal seekers.”
The post Discounts and election fatigue: What to expect for the holidays appeared first on MarTech.
**Holiday Outlook: Discounts and Election Fatigue – What to Anticipate**
As the holiday season approaches, consumers and retailers alike are gearing up for what promises to be a unique and potentially unpredictable end to the year. With economic uncertainty, inflationary pressures, and the backdrop of a contentious election cycle, the 2023 holiday season is shaping up to be a mix of excitement, stress, and strategic decision-making. Here’s what to expect as we navigate holiday discounts and election fatigue.
### 1. **Discounts and Promotions: A Shopper’s Paradise**
The holiday season is synonymous with sales, and 2023 is no exception. However, this year’s discounts may be more aggressive than usual, as retailers look to clear excess inventory and entice cautious shoppers.
#### **Why the Discounts?**
– **Inventory Glut**: Many retailers overstocked in 2022 due to supply chain uncertainties and are now sitting on excess inventory. With warehouses full, businesses are eager to offload products, especially as new merchandise for 2024 arrives.
– **Inflationary Pressures**: While inflation has moderated compared to its peak, many consumers are still feeling the pinch. Retailers are aware that shoppers are more price-sensitive and are likely to offer deeper discounts to encourage spending.
– **Competition from E-commerce**: The rise of online shopping continues to put pressure on brick-and-mortar stores. To stay competitive, both online and physical retailers are expected to offer significant deals, especially during key shopping events like Black Friday, Cyber Monday, and the weeks leading up to Christmas.
#### **What to Expect**
– **Earlier Sales**: Retailers are likely to start their holiday promotions earlier than usual, with some already kicking off sales in late October. This trend, known as “Black Friday creep,” has been growing in recent years, and 2023 will be no different.
– **Bigger Discounts on Electronics and Apparel**: Categories like electronics, home goods, and apparel are expected to see some of the steepest discounts. With new tech releases on the horizon and fashion trends constantly evolving, retailers will be keen to move older models and styles.
– **Buy Now, Pay Later (BNPL)**: The BNPL trend continues to grow, offering consumers the option to spread out payments over time. Expect to see more retailers offering this service as a way to encourage larger purchases, especially for big-ticket items.
### 2. **Election Fatigue: A Cloud Over Holiday Cheer?**
The 2023 holiday season coincides with the lead-up to the 2024 U.S. presidential election, and the political climate is already heating up. While the holiday season is traditionally a time for family gatherings and celebrations, election fatigue could cast a shadow over the festivities.
#### **What is Election Fatigue?**
Election fatigue refers to the exhaustion and frustration that many people feel after prolonged exposure to political campaigns, debates, and media coverage. With the 24-hour news cycle and social media amplifying every political development, it’s easy for people to feel overwhelmed and disengaged.
#### **How Election Fatigue Could Impact the Holidays**
– **Family Gatherings**: Politics has always been a hot topic at the dinner table, but in recent years, political polarization has made these discussions more contentious. Many families may choose to avoid political discussions altogether to keep the peace during holiday gatherings.
– **Mental Health**: The constant barrage of political news can take a toll on mental health. For some, the holiday season may feel less joyful as they grapple with anxiety or stress related to the election. Retailers may respond by promoting self-care products and experiences as gifts.
– **Consumer Confidence**: Political uncertainty can impact consumer confidence, which in turn affects spending. If voters are feeling uncertain about the future, they may be more conservative with their holiday budgets, opting for practical gifts or cutting back on non-essential purchases.
#### **Retailers’ Response**
Retailers are likely to be mindful of election fatigue and may adjust their marketing strategies accordingly. Expect to see campaigns that emphasize escapism, nostalgia, and togetherness, as brands seek to create a sense of comfort and normalcy during a politically charged time.
### 3. **The Role of Technology in Holiday Shopping**
Technology will continue to play a pivotal role in shaping the holiday shopping experience in 2023. From AI-driven personalization to the rise of the metaverse, retailers are leveraging cutting-edge tools to enhance the customer experience.
#### **AI and Personalization**
Artificial intelligence (AI) is helping retailers offer more personalized shopping experiences. By analyzing customer data, AI can recommend products based on past purchases, browsing behavior, and even social media activity. This level of personalization can make holiday shopping more convenient for consumers while boosting sales for retailers.
#### **The Metaverse and Virtual Shopping**
While still in its early stages, the metaverse is slowly becoming a part of the retail landscape. Some brands are experimenting with virtual
Recent Comments