January 14, 2022

The Holidays are Not Over Yet

Michael Cheng

The Holidays Are Not Over Yet

Keep the momentum going into the new year

Last year’s holiday season was unique as supply chain challenges, inflation fears, and pandemic volatility impacted consumer behavior. Retailers invested more ad spend into earlier weeks leading into the holidays than previous years, as consumers were shopping earlier than expected. Contextual marketing propelled sales as consumers increasingly shopped in places outside main shopping portals. Ecommerce continues to grow year-over-year and there’s no signs of slowing down.

Though last year’s holiday season has officially ended it does not mean consumers have stopped shopping. The new year starts ripe with opportunities and we encourage retailers to keep the momentum going to avoid missing any potential revenue gains.


New Year, New Opportunities

Ease up after the holiday season and you will miss the window of opportunity within the first few weeks of the new year. There’s holidays and new year’s themes to capitalize on, so here’s our recommendations that are worth additional ad spend to drive revenue:

  • New Year’s sales: Consumers are patiently waiting for more or better deals in the new year. They expect New Year’s sales in general, specifically for retailers to clear out excess merchandise through final sale or blowout sales that offer significant discounts.
  • Health and wellness sales: Every year consumers make new year’s resolutions that consist of improving their health and well-being. This is a lucrative time for retailers to capitalize on fitness, wellness, and related categories as they look to jump-start their new goals.
  • Valentine’s Day: Last year, consumers spent an average of $165 on Valentine’s Day gifts. If there’s anything we learned in 2021 is that even with financial concerns looming, consumers are still willing to spend when it comes to their loved ones. We expect this to continue as consumers celebrate safely.
  • President’s Day: This is the last national holiday for US based retailers until Independence Day on July 4th. That’s over four months until the next major holiday campaign to drive sales for your business. Typically home goods, appliances and tech items are discounted during this time.


Returns Can Provide More Opportunities

Consumers will return from the holiday break sorting through gifts, and will likely find items they want to return or exchange. A recent survey indicates 38% of consumers plan to return gifts this year. As consumers are actively seeking replacement items, this creates an opportunity for retailers to get in front of them. While on the journey to find a replacement product they might find additional items or something of higher value they want to purchase on your site. Returns can also create in-store traffic, and similar results to online shopping where they might browse and find another item on-top of what they’re returning or exchanging.


Delayed Gift Card Purchases

Every year consumers forget about gift cards they received during the holidays. Pandemic worries continued into last year’s holiday season, so gift cards became a safe and easy gift to give. With a significant amount of gift cards given and unused, this becomes a great time to increase your ad spend to monetize gift card holders. In fact, a consumer survey found that 58% of gift card recipients plan to use their gift cards after the holidays. Gift card usage this year looks like it’s creating big buzz as retailers have joined to create and promote an official “National Use Your Gift Card Day” on January 15th.


Take Action Now

Adjust your budgets accordingly and don’t take your foot off the gas pedal just yet. Using performance marketing can help influence and connect consumers to more products in your catalog. When you utilize these tactics properly on high-intent users, a simple promotion or a best selling holiday item could be enough for them to convert. Users that are completing returns or using gift cards can actually end-up spending more overall.


Sights On Q2 And Beyond

The new year arrived fast and we expect the same for Q2/Summer. What we typically observe during this period is seasonality. However, what we know about seasonality has changed. It’s heavily dependent on ever changing consumer behavior, which has become even more unclear in recent years and is already very hard to predict. This can be frustrating for retailers and marketers alike, and in general a difficult task to get ahead of.

We also face the challenge of what’s next as we continue to deal with the pandemic. Companies are trending towards a hybrid office return. Does this mean a rebound for the clothing and apparel sectors? The US government is talking about raising interest rates back to pre-pandemic levels. Will consumer confidence and spending continue? Consumer privacy is a hot-topic and companies are taking more measures to ensure their customers are protected. Is this the end of cookies as we know it? It’s all hard to say but the best we can do is follow the story the data illustrates for us. Stay tuned for our Q1-2022 Strategy Guide!


For more information about retail performance marketing, contextual targeting and empowering your first-party data, contact Connexity.


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