Close this menu

How Retailers Are Attracting Customers This Holiday Season

According to the 2023 Deloitte holiday survey, consumers plan to spend an average of $1,652 this season, surpassing pre-pandemic figures for the first time. This is good news for retailers, especially small- and medium-sized businesses, three-quarters of which say they rely heavily on holiday customers. 

With Shopify noting that 41% of Americans are already doing their holiday shopping, retailers are deploying creative ways to attract customers. 

Promoting Great Deals

Customers are on the hunt for bargains this year as inflation has tightened holiday budgets. More than half of 2023 holiday shoppers “won’t be able to buy as many gifts as they’d like to” this year, according to a recent NerdWallet survey

For retailers, “a winning strategy may come down to driving value around key promotional events,” says Deloitte. Black Friday and Cyber Monday are going to be more important for retailers this year than last – two-thirds of Americans (versus 49% in 2022) plan to shop during the long weekend of Black Friday through Cyber Monday. 

Younger shoppers are the most likely to respond to earlier holiday deals. Nearly half of them said they would “probably or definitely start shopping earlier” if retailers began their holiday deals earlier. Retailers may want to focus on tech deals particularly early; Shopify noted that phone and tablet accessories purchases are already on the rise. 

Small Businesses 

The long weekend after Thanksgiving includes Small Business Saturday. Consumers plan to spend almost half of their holiday budgets “shopping small,” according to an Intuit Quickbooks survey. Intuit notes small businesses could see $125 billion in total revenues this holiday season.

As consumers shop small online to find unique gifts from anywhere, small business retailers are taking advantage of new tools. For example, consumers can now search across all Shopify storefronts in a browser, not just through the Shopify app. Etsy is also running a “12 Deals to Shop for One-of-a-Kind Gift Giving” promotion during its Black Friday sales this year, which focus on elevating small sellers and handmade goods.

Small retailers are also getting creative by joining together to entice shoppers. This year, shoppers in Rock Island, Illinois and Davenport, Iowa can pick up a punch card at participating businesses. For people who visit all ten locations, they can enter their punch card for the chance to win $1,000 worth of gift cards.

Attracting Gen Z

This year, retailers are investing more in Gen Z. Thirty-seven percent of consumers ages 18 to 29 say they plan to spend more than last year – nearly double the average across all age groups.

Social media and influencer marketing will be key to attracting these younger customers. Shopify notes that about half of Gen Zers said they’ll buy at least some gifts through social media, compared to one-third of all U.S. holiday shoppers. 

Humor is also a key marketing element with Gen Z. Last month, Samsung released a comedic advertising spot aimed at young shoppers in which interns secretly created the company’s advertising campaign. 

Going “Phygital”

Retailers are increasingly splitting their focus between online and brick-and-mortar deals in marketing. This is an important strategy for all age groups; even among Gen Zers, half said they also plan to shop at malls this holiday season. 

Retailers are also embracing what’s known as “phygital retail”, which combines physical and digital tactics to engage with their customers. This means at a minimum utilizing QR codes and offering electronic payments at physical stores. There has been a particular uptick in QR codes on retail packaging and out of home advertising, as well as in commercials during shows and sports. But retailers are also getting more creative. 

Amazon’s holiday toy catalog mailed to customers this year incorporated games, puzzles, a sticker sheet, a tear-out wish list and an original short story, making it an interactive experience for children. Etsy created a comedic campaign using the Mission: Impossible theme for shoppers seeking out the right gifts. 

Retailers are creating immersive experiences that go beyond just pop-up shops, too. In September, American Eagle showcased its denim collection on the High Line in New York City, featuring 150 mannequins wearing different styles of jeans and a QR code for customers to shop each pair right on the spot. Retailers rely on companies like Clutch to create customizable, immersive “phygital” experiences for consumers in stores or at events, such as interactive games, AR/VR activations, timesplices and custom trading card kiosks. 

Counting on Toy Sales

Toy makers are “counting on the holiday season to save a down year,” according to Forbes. Toys are a $27B market in the U.S., making them a critical part of the holiday retail season. The hot sellers are anticipated to be branded toys like Barbies, Hot Wheels, Jurassic World, Bluey and Lego. In addition, play vehicle sales are up 178% month-over-month, Shopify finds. To attract shoppers, retailers are especially conscious of price this year, listing toys in the under $30 and under $20 range. 

Tech toys are another hot seller this year. Dog-E, an interactive robot dog, was unveiled at CES in January. It sold out of its pre-orders and has already seen hot sales after its October 1 release. 

Retailers are focusing on marketing to toy trends. This year’s top trends are smaller, “quieter” toys like MGA Miniverse Tiny Foods, and Squishmallows. Another trend is nostalgic toys as parents look for more toys from their childhood, Forbes notes. 

This holiday shopping season, retailers of all sizes need consumers to buy gifts despite record inflation. Americans want to shop, too, but they need affordable deals. With the competition for business fierce, retailers are relying on price-cutting strategies and targeted marketing to attract buyers in this tough market.