Gift giving meets revenge living: Why experiences are so important this holiday season

    Thanksgiving is just days away and brands have begun to roll out holiday campaigns in pursuit of sales. However, the end-of-year retail frenzy is again packed with surprises even as other areas of pressure ease.

    This is the first holiday season not dogged by pandemic restrictions since 2020, and much of shopper behavior reflects consumers entering a new phase of what some brands term “revenge living.” Many are willing to shop, but they are likely to purchase fewer gifts. Some are spending with enthusiasm while others have put a buying spree on the back burner as economic concerns take precedence. A return to brick-and-mortar habits has made headlines, but social commerce could reach new highs. In the end, success this season is going to come down to the strength of emotional appeals.

    Among the themes of this season is the damage to the consumer psyche caused by persistent inflation and economic woes this year, a state of mind that is shaping the way brands market themselves. Among U.S. households, 37% report that their financial situation is worse than last year and 73% believe product prices will be higher, according to Deloitte’s 2022 Holiday Retail Survey,

    “As one of my friends and colleagues says, being on your favorite aunt’s shopping list this year is a lot tougher than it’s been in the past,” said Rod Sides, global insights leader at Deloitte. 

    That’s not to say there aren’t any bright spots. Average consumer spending this year is projected to hit $1,455, a minuscule drop from $1,463 a year prior, the survey found. Overall retail spending is projected to grow 4% to 6% and total between $1.45 and $1.47 trillion in the November-January period, per a Deloitte forecast. During the same period last year, the U.S. Census Bureau reported sales grew 15.1% to a total $1.39 trillion, the largest annual increase in a decade.

    “What we’re finding is that the lower income group this year will come roaring back. I think they have settled into this as the new normal.”

    Rod Sides

    Global Insights Leader, Deloitte

    So while the money is there, the way consumers spend it is shifting, reflecting the experience-driven mindset many have adopted to make up for lost time during the pandemic. The average number of gifts given per consumer is expected to drop from 16 in 2021 to nine this year, while total spend on experiences, like concert tickets or restaurants, is expected to increase 7%. 

    Who is spending is also shifting, with a 7% decrease expected from higher-income shoppers, or those making over $100,000 per year. Lower earners, or those making under $50,000 per year, are expected to grow by 25%, per Deloitte. 

    ”What we’re finding is that the lower income group this year will come roaring back,” Sides said. “I think they have settled into this as the new normal. [They] want to celebrate the holidays, [they] want to spend time with family.”

    Gifting value

    Reflecting consumer concern about the economy, 53% of marketers believe they won’t match 2021 profits, per a holiday benchmark survey by Commerce Next and The Commerce Experience Collective. Top concerns include the potential for a decrease in consumer spending (63%), worries over generating marketing return on investment (47%) and pressure to match deals and discounts (45%). 

    “While ‘tis the season, marketers are mindful that many people are struggling to make ends meet and are fighting the impact of inflation.”

    Mathieu Champigny

    CEO, Industrial Color

    Marketers looking to profit in the critical fourth quarter need to tap into the consumer mindset to be successful this year, said Mathieu Champigny, CEO of Industrial Color. Brands may opt to pursue more somber marketing strategies compared to flashier displays of holiday cheer to create a feeling of understanding that could be more likely to prompt consumers to buy, he continued.

    “While ‘tis the season, marketers are mindful that many people are struggling to make ends meet and are fighting the impact of inflation,” Champigny wrote in an email. “So the message is about enjoyment of real life moments more than extravagant displays of glitters and shiny outfits.”

    Some have already rolled out strategies addressing economic concerns. Kohl’s earlier this month unveiled its “More Gifts. More Savings.” campaign, which features TV spots focused on deals and promotions and a social media activation centered on savings hacks. Similarly, Walmart released an “Office Space”-inspired campaign promoting ongoing holiday promotions. The effort sees the big-box store lean away from Black Friday and instead push for Monday deals, which follows a growing movement away from the annual post-Thanksgiving savings event. 

    In hopes of reaching deal-driven consumers sooner, 45% of marketers plan to encourage consumers to shop earlier — reflected by moves from platforms like Amazon, which for the first time ever hosted a second Amazon Prime Day this year in early October. The shift in the holiday shopping season comes as 23% of shoppers are expected to spend their holiday budgets by the end of October, up from 18% the year prior, and the average shopping window is expected to be 5.8 weeks compared to 6.4 weeks in 2021, per the Deloitte holiday report.


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