How to Target and Convert Holiday Shoppers Amidst Economic Uncertainty

By Melissa Tatoris, Vice President of Retail, Zeta Global

Many consumers are tightening their belts when it comes to holiday shopping this year. With inflation at a 40-year high, ongoing supply chain issues, the economy top of mind, and a recession looming, this comes as no surprise. As we know, lower and middle household incomes are feeling the pinch, whereas higher incomes are projected to spend more than last year. But it’s not all doom and gloom -- brands can still capture their slice of consumer spending with a more nuanced strategy than in years past. Here are predictions and tips for the 2022 holiday shopping season and how brands can prepare accordingly, based on Zeta’s latest holiday retail survey.

In a survey of thousands of shoppers across North America, 68% of consumers said they’ll spend the same amount (26.65%) or less (26.37%) this year, and nearly 28% will focus on price over brand loyalty or even convenience. Getting more value out of a product will be key. Highlight the quality of your products, as consumers in a recession will want items that last and that they don’t have to replace. Show how shoppers can get multi-use out of certain items. For example, how can they add a new trendy piece to their current wardrobe to update - rather than replace - what’s in their closet?

The majority of those who will shop (67%) will shop closer to the holidays. However, this doesn’t mean they’ll shop on the traditional peak holiday sales days such as Black Friday or Cyber Monday. Zeta data revealed that over half of consumers say these days aren’t as important as in previous years.

By no means should you ignore these key dates—you just don’t need to focus all your efforts around them. In fact, the bulk of your conversions will likely take place in late December, so be mindful of having enough budget to extend campaigns well into the end of the year. Target high-value audiences that will drive greater ROI. Work with the right partners to harness intent and interests to reach only those most valuable customers and their look-alikes based on demographics, sentiment, location, psychographics, and more.

This year, more than any other, is an opportunity to edge out the competition with highly relevant and personalized marketing messaging that shows your audience you truly care about their shopping behaviors.

eCommerce shopping will remain steadfast this year, but the majority of Americans will be shopping in stores, with department stores and discount stores taking center stage. Data is showing those with incomes less than $75k will remain with tighter budgets, shop at discount stores, and spend less than in previous years. On the flip side of the coin, those with greater household incomes are expected to spend more and shop in boutiques and luxury retailers.

Because of this shift back to in-store shopping, marketers must focus on “dwell time,” or ways to keep shoppers in their space. For example, Neiman Marcus in Dallas had an interactive snow globe that kids played in, while other stores and malls had visits from Santa last holiday season. Innovative in-store customer experiences are required to drive traffic and excitement to your brand. Executing on the experiential element using local partners for food samples, wine, DJs, free gifts, interactive games will bring steady foot traffic to your store.

Electronics will be one of the most popular categories of gifts this year, perhaps as consumers gear up for a long recession over the winter. Our shopper survey found that 18% are prioritizing gaming gifts and 17% are eyeing computers. Other “It” electronics items include Apple products, video game consoles, mini pocket projectors, and 3-in-1 charging stations. Almost a quarter of shoppers will also focus on experience-based gifts such as travel and concerts, and almost 37% will seek ways to package up supermarket and other CPG-type gift cards to defray the costs brought on by inflation and recession.

Focus on optimizing your search marketing and website ads, as almost 24% of consumers report finding out about new products via these channels. With the right data partner, you can attach likelihood to convert attribution scores to top audiences and strategically bid stronger for those that will have a better ROI. Make sure your SEO and metadata are up to date, so your brand pops up at the top of search results. Use technology that helps you understand which channels work best for each consumer -- so you don’t waste your budget. Gain access to real-time response data to bolster that 1:1 customer relationship. Be smarter about the items you’re promoting and who you’re targeting in each channel, so you don’t end up with low marketing ROI that results in losing budget next year.

Marketers can still reach their target consumers and convert them into paying customers during times of economic change. This year, more than any other, is an opportunity to edge out the competition with highly relevant and personalized marketing messaging that shows your audience you truly care about their shopping behaviors.

Picture this: It’s the 90s and you’ve got on your favorite graphic tee and are driving to the mall to do some holiday shopping and buy the latest CD for your Discman. Once you’ve finished your shopping at Sam Goody, you aimlessly walk around, pop into stores, and chat with the employees as you throw items over your arm for the dressing room. Almost all your shopping and socializing is done at the mall, and your allowance is spent here nearly every weekend.

Fast forward to 2020 and the COVID-19 pandemic has temporarily closed almost all in-person retail, and an accelerated wave of digital-native stores are popping up. They’re setting the stage for the future world of commerce which will be built online, not in store. Your allowance has turned into a salary and is spent via Shopify-powered shopping carts on ecommerce websites inside Google Chrome, while your store browsing consists of Instagram photos, social shares, and online ads.

Today, especially during a stressful time like holiday shopping, customers expect fast, painless, and easy digital experiences whenever they interact with a brand—whether it's through the online store, social media, or customer service. Now, in the midst of 2022, this reality is even more extreme, with 45% of shoppers buying more directly on websites than ever before. Yet Gladly’s 2022 Customer Expectations Report found that businesses are losing $75 billion a year in revenue due to inadequate customer service alone.

With the barriers to start a new brand being lower than ever, today’s e-commerce world is both diluted and noisy, creating endless options for consumers, shortening their attention spans and customer-support fuses. So how can companies take advantage of the busy holiday season and use these touchpoints as an opportunity to differentiate themselves from competitors and meet customer needs at the same time?

Below are 4 mind shifts to help your brand stand out in the crowd during the busiest months in retail in this digital-first era of commerce.

Unfortunately, we have all undergone a long and painful customer service experience at some point in our lives and the fact is, returns rise during the holidays. Whether making a return or chatting to a help bot to learn more about a company's exchange policy, bad customer service experiences have become a common occurrence that we’ve started to expect and accept. Customer service has such a bad reputation that 58% of shoppers said they would rather stand in line at the DMV than jump through hoops to get help from a live agent. Brands that have identified this pain point have been able to repair this reputation by making the customer the center of gravity.

In order to center customer service around the customer journey, brands must provide their service agents with a way to easily and quickly understand the individual journey of each customer. Though almost every company thinks with a customer-first approach, their technology partners rarely support them in this. They might be customer-first at their core but if they’re still using old-school methods for support like separate tickets for each channel (voice, email, chat, SMS, social), they’re saying one thing to the consumer but treating them like an outsider when it comes to how they’re helped. Nobody likes repeating themselves! Customer service agents need to be able to access all relevant information on who the customer is (their past purchases, etc.) and their customer service conversation history in one place (independent of channel) in order to make fast individualized recommendations that leave a lasting, positive impression with the customer.

Today, 57% of consumers want to be able to easily transition from a chatbot to a live customer service agent, leading brands to use an omnichannel approach to customer service. The term omnichannel was well-intentioned, but unfortunately it’s now code for “bolted together”. Historically, the CX systems brands used tended to have various channels bolted together—a one system per channel type approach—because new channels become available over time. First voice, then email, then SMS, then chat, then all the separate social channels. Bolting all these together creates a type of “franken-monster” that leaves disgruntled customers and distressed service agents in its wake.

But more tools does not necessarily mean more functionality—in fact, it usually means more work. Service agents spend the critical first minutes of a support interaction flipping between channels looking for info and context before they can even address a customer question. This creates stress and chaos on their end and impatience and irritation on the other with customers.

The problem with the omnichannel approach is that it creates a new service ticket for every interaction—something that takes away from the human experience of shopping. Shoppers (73%) found the idea of being treated like a person rather than a ticket number appealing, telling us that customers still look for the human element of shopping even if they're doing it from the comfort of their own homes, interacting with a self-service bot, or on the phone with an operator. When brands rely on case numbers, customers often have to repeat their issue to each and every agent because information is hidden in different tickets from different channels, taking time away from solving the problem and causing frustration for the customer.

In today’s world, where 42% of shoppers say they would stop buying from a brand altogether after just two bad service experiences, channel independence is crucial. Just as Frankenstein's inability to love was his ultimate downfall, an omnichannel approach to customer service without a centralized view of the customer journey will inevitably cause customer frustration and risk violating the two-strike rule.

Just as Frankenstein's inability to love was his ultimate downfall, an omnichannel approach to customer service without a centralized view of the customer journey will inevitably cause customer frustration and risk violating the two-strike rule.

Jason Finkelstein is CMO at Gladly, a customer service platform helping the world's most loved brands deliver loyalty through radically personal customer service. Jason is a 5-time CMO with experience at high-growth startups, private and public SaaS businesses including AdRoll, Traitify (acquired by Paradox), AVG Technologies (acquired by Avast) and Location Labs (acquired by AVG). He is also a co-founder of Numa and serves as a GTM advisor for several B2B SaaS businesses.