Why it matters:
- U.S. Consumers plan to spend an average of $567 during Black Friday/Cyber Monday shopping events, up 13% from last year, according to Deloitte.
- Millennial consumers are poised to be the most active shoppers, accounting for 43% of spending during the kickoff to the holiday selling season. This year self-gifting will be big among both Millennials and Gen Z.
- Businesses in the retail ecosystem ranging from Kohl’s to Simon Property Group are tapping artificial intelligence to personalize the gift-buying experience for shoppers this holiday season.
The Black Friday/Cyber Monday
(BFCM) shopping bonanza is poised to be a solid one for merchants
this year, despite increasing competition for holiday spending
dollars from company-specific promotions such as Amazon Big Deal Days
and others.
According
to Deloitte's
2023 Black Friday Cyber Monday Survey, U.S. consumers plan to spend
an average of $567
— up
13% from last year —
during
the BFCM shopping events from Thursday, November
23 through Monday, November
27.
The survey found that 57% of
shoppers plan to take advantage of as many deals as possible, and
that about 40% plan to complete all their holiday shopping during the
BFCM time frame.
Retailers and brands seeking to
capitalize on the weekend spending splurge should keep in mind a few
key trends that have emerged, such as the strong interest of
millennials in shopping during the BFCM period, the opportunities to
target consumers shopping for themselves, and the possibilities of
artificial intelligence to personalize the gift-buying process.
Young consumers are ready to spend: Millennials and Gen Z will gravitate to deals and ‘doorbusters’ at stores ranging from Target and Five Below to SHEIN
The Deloitte research found that
millennial consumers promise to be the most active shoppers in the
BFCM period, accounting for 43% of spending, which creates
opportunities for merchants to connect with this huge demographic.
Millennials’ share of BFCM spending is forecast to be up from 30%
in 2019.
In addition, the Deloitte survey
found that millennials gravitate toward the “doorbuster”
tradition of shopping as soon as Black Friday sales begin. Fifty
percent of millennials said they plan to go to stores between
midnight and 7 a.m. on Friday, vs. 31% of all other shoppers.
Another
spending forecast from Boston Consulting Group
predicted that young consumers overall would spend generously
throughout the holiday season.
“While
healthy spending is expected across generations, Gen Z and
millennials could be the driving force for sales growth this holiday
season, relative to their Gen X and baby boomer counterparts, who are
less optimistic,” the report concluded.
The
report found that 38% and 36% of Gen Z and millennials, respectively,
expect to spend more
this year than last, compared to 20% of boomers.
These
young shoppers will seek out the best deals they can find, however,
and will go bargain hunting at dollar stores and other low-priced
merchants, including Five Below,
SHEIN,
and Temu,
according to YPulse’s
Holiday Shopping Plans report.
The report notes that SHEIN and Temu are among the most popular
shopping apps for Gen Z and Millennials.
“These shopping platforms have
become synonymous with trendy, budget-friendly products —
especially fashion — and both are pushing a ton of holiday deals
and discounts right now,” the YPulse report concludes.
Still,
the most popular holiday shopping destinations overall for 13- to
39-year-olds are Amazon,
Walmart,
and Target,
in that order.
[Read more: 5 Trend Opportunities for Marketers to Monetize This Holiday Selling Season]
Self-gifting trend yields
opportunity for marketers to ‘invite shoppers to treat themselves’
One of the key characteristics of
Gen Z and millennial shoppers is their intention to spend on
themselves. The Deloitte survey found that 68% of millennials plan to
spend gifts on themselves, for example. That compares with 65% of Gen
Z, 46% of Gen X, and 32% of baby boomers.
In turn, marketers would be wise to lean into the popularity of self-gifting by framing “your sales not only around gift-giving, but also around inviting your shoppers to treat themselves,” according to Shopify.
As holiday shoppers engage with our lively, knowledgeable helper elves, they will experience the thrill of pinpointing just the right gift thanks to the latest advancements in AI.
Lee Sterling, Chief Marketing Officer, Simon Property Group
Businesses tie holiday shopping to causes such as ‘Movember’
Amid increasing consumer concern
that excessive consumption runs can run counter to their belief in
sustainability and charity, many consumers are rethinking their
gifting traditions.
A
consumer survey by NerdWallet,
for example, found
that 36% of shoppers said they’d rather have an experience with
their loved ones instead of exchanging gifts during the holiday
season, and 28% said they’d prefer to receive fewer gifts. About a
quarter — 26% — said they have discussed or plan to discuss
limiting holiday gift spending this year with their friends and
family.
In
addition, 11% plan to regift this holiday season, and 14% said they
will purchase some gifts secondhand this year.
Against
that backdrop, some retailers are tying gift-giving to charitable
causes, such as Movember,
an initiative that supports men’s health. It encourages men to grow
mustaches during the month of November to call attention to issues
such as prostate cancer and men’s suicide prevention.
The
effort is supported by retailers including Amazon,
Walmart,
and CVS,
as well as some men’s grooming brands, including Every Man Jack
and Just for Men.
[Read more: Adapt These Strategies From Big Retailers to Boost Your Small Business Saturday Sales]
Black Friday weekend as a
loyalty grab: A prime time to sign up customers for membership
programs
The excitement around the BFCM
shopping window is a prime opportunity for growing customer
membership in loyalty and subscription programs.
Walmart,
for example, has been promoting membership in its Walmart+
subscription platform by offering early access to Black Friday
discounts to those who sign up. The online-only offer — which is
being promoted with a countdown timer on the retailer’s website —
will enable paid Walmart+ subscribers be begin shopping Black Friday
deals at 12 p.m. on Wednesday, November
22.
Walmart+ offers its members free
shipping and delivery and discounts on fuel and streaming services,
at a cost of $98 per year or $12.95 per month, with discounts for
seniors and qualifying consumers who receive government assistance.
Target,
meanwhile, is promoting membership in its Target Circle
loyalty program, which allows users to earn discounts based on a
percentage of eligible spending, as well as access to special deals
and other perks. The retailer has been encouraging shoppers to
“[j]oin
Target Circle for free and score new deals every day” as part of
its “Deal of the Day”
campaign promoting early access to Black Friday-style discounts.
Tapping AI to personalize the
gift-giving experience
It could be argued that 2023 is
really the first year that artificial intelligence has become truly
mainstream, and some merchants are dipping their toes in the AI
waters.
Retailer
Kohl’s,
for example, is offering personalized gift recommendations using AI
through its new Kohl’s Storybook Magic
platform. Customers can input details about themselves or their gift
recipients, such as their hobbies and interests, and the AI engine
will generate a holiday story woven with gift recommendations.
Likewise,
Coca-Cola has debuted an AI platform called Create Real Magic
that allows users to craft AI-generated holiday cards.
Simon Property Group,
a real estate company specializing in retail, dining, and
entertainment destinations, is planning a Black Friday debut for its
HolidAI platform designed to help consumers shop for gifts this
season. The service will combine on-site shopping assistants with AI
search tools at two locations beginning November
24: Roosevelt
Field
in
Garden
City, New
York,
and Del Amo Fashion Center in
Torrance,
California.
“As holiday shoppers engage with our lively, knowledgeable helper elves, they will experience the thrill of pinpointing just the right gift thanks to the latest advancements in AI,” said Simon Chief Marketing Officer Lee Sterling, in a statement.
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