The data on Cyber Week 2023 is in! Despite predictions of constrained holiday shopping behavior, the retail results for the five days spanning Thanksgiving, Black Friday and Cyber Monday were record breaking. Salesforce data on Cyber Week 2023 digital sales shows a 6% global year-over-year increase and 5% for the US alone. Adobe analytics data suggests similar Cyber Week growth levels.
As we pointed out in the 2023 Persado Holiday Marketing Guide, however, Black Friday and Cyber Monday may not register as large for consumers as they did in the past. Nor does Cyber Week 2023 spending necessarily signal ongoing exuberance in the weeks to come. In this post, we revisit some of the trends in our holiday guide and align them with the real-time data on Cyber Week to offer some insights for the rest of the season.
Holiday creep is real—but today’s consumer will hold back budget for a better price
One of the major trends unending the retail holiday playbook is the phenomenon of holiday creep. This is when retailers start promoting (and consumers start buying) holiday-related products well before Thanksgiving. Holiday creep requires retailers to treat the end-of-year shopping season with more nuance than in the past. It is not a sprint that launches with Cyber Week 2023. It is a triathlon with three key phases. The first spans the weeks and months before Thanksgiving, as consumers get a head start on shopping and retailers begin to merchandise and market holiday items.
Yet October 2023 consumer spending data showed consumers starting to pull back. Spending growth was .2% in October compared with .7% growth in September. Consistent with the fact that pandemic savings have dried up and the resumption of student loan debt payments, 75% of consumers said they would be looking for deals this year. Forty-six percent planned to shop either well before the holiday season or in early November.
Put those two trends together and you see consumers starting early, yet holding back some spending for a better price. The National Retail Federation (NRF) finds that 55% of consumers who made a purchase during Cyber Week 2023 were convinced to do so by a deal or price promotion.
Deloitte similarly found in a pre-Cyber Week survey that 66% of consumers expected to shop during Cyber Week 2023 in the expectation of having their dollar go further.
These trends of more modest spending growth in October and holding back for better deals follow two observations we have made elsewhere. The first is that consumers no longer feel a sense of urgency now that sales occur for longer. The second is inflation. The average selling price across all categories has grown 4% in 2023 versus 2022. The increases vary depending on the spending category. Toys and learning are up 14% on average, while active footwear is up 17%. These price hikes pressure consumers to spread out spending further and wait longer for better deals.
What does the holiday creep vs. holiday discount reality mean for the next four weeks of the shopping season?
Maintain momentum throughout the rest of the season; adjust your retail approach as we enter the third phase of that triathlon noted earlier. The NRF data says that by the end of Cyber Week 2023, consumers were about halfway finished with their holiday shopping. That leaves significant consumer spending to capture with offers that appeal to them, communicated in language that motivates action.
Technology has become indispensable—including by enabling personalization
Let consumer engagement guide your approach. That includes interactions IRL and online.
The in-store shopping experience is alive and well. NRF estimates that 76.2 million shoppers showed up in-store on Black Friday. An even larger 90 million consumers shopped online, however. The majority of them used their mobile phones. Those digital shoppers drove an almost 8% increase in digital spending on Black Friday, according to Adobe. In fact, across every day during Cyber Week, the number of online shoppers exceeded in-store shoppers.
AI was integral to the online shoppers this Cyber Week.That digital engagement gave retailers an opportunity to deliver compelling omnichannel experiences throughout the customer journey—including by personalizing messages and language using Generative AI. Chatbots enabled by GenAI were common co-pilots as the number of messages they communicated increased 79% globally from the same five-day span in 2022. AI-enabled offers and recommendations, as well as chatbot marketing, influenced as much as $51 billion of global online sales, or one out of every six dollars.
How will AI influence the post-Cyber Week 2023 shopping season?
Retailers are becoming more adept at using AI and customer data to inform product recommendations or offers. How those recommendations are delivered also matters. Persado data from every holiday season since 2018 finds that language evoking the emotions of ACHIEVEMENT, ATTENTION, and GRATITUDE consistently drive the best performance for holiday marketing campaigns. It can even uplevel the impact of personalized offers. That’s according to data from the Persado Motivation AI knowledge base, which contains the results from over a decade of Fortune 500 digital marketing campaigns.
That historical knowledge not only allows us to make predictions about the best language to drive holiday results for our customers, but also enables us to generate that language for their digital channels, so they can share optimized messages that motivate action. That’s what retailers need to deliver for the final phase of this holiday season in order to capture their share of the remaining customer wallet.
For example, Persado Dynamic Motivation delivers a personalized website experience at scale. It leverages Generative AI and the Persado Motivation AI knowledge base to take the insights into web browsing behavior, purchase history, interests, and preferences, and use them to inform the right optimized and personalized words and phrases for a given customer. Brands can be up and running with Persado Dynamic Motivation within days. When used for the online cart page, Dynamic Motivation reduces cart abandonment and increases e-commerce revenue by 3-5%.
Happy holidays!
Cyber Week 2023 may be over, but there is still time to capitalize on the end-of-year shopping season. By sustaining momentum and leveraging technology, retailers can maximize their end-of-year impact.
Reach out today for your risk-free trial.
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