I recently was able to do a joint webinar with our Google Strategic Agency Manager, Harika Komandoor Ranganathan, on the topic of Making Every Holiday Connection Count. Targeted to ecommerce clients who are looking to the holiday 2024 season, Harika and I joined forces to discuss the holiday trends that Google is forecasting and share practical strategies advertisers can use to boost holiday sales.
You can watch the webinar here or review the deck here.
But in case you don’t have time to do either, I’ll share the highlights below in a two-part blog series. Part 1 below will cover the holiday trends and shopping mindset. Part 2 covers those practical strategies that advertisers can use.
Google’s Holiday Trends
2024 brings unique timing considerations that will influence consumer behavior and your holiday strategy.
- Early-year economic indicators suggest consumers may have reduced purchasing power, impacting their spending decisions. Early seasonal shopping trends can help us predict this year’s holiday shopping season.
- Thanksgiving’s late arrival this year leaves us with five fewer shopping days post-Cyber Week, intensifying the December rush for both consumers and retailers.
- Finally, 2024 is a presidential election year. We’ll explore how the election’s proximity to Cyber Week could affect consumer sentiment and wallets.
By understanding these factors, we can adapt our approach and maximize opportunities this holiday season.
Holiday Shoppers Will Face Harder Choices
Early signs suggest winning over new customers and increasing holiday spending may prove challenging this year.
- Consumers are relying heavily on credit, with record debt levels and increasing use of alternative options like Buy Now Pay Later, now exceeding $16 billion.
- Additionally, consumer confidence is waning due to concerns about job security, income, and future economic outlook.
- This is reflected in recent surveys, where over a third of Gen Z shoppers plan to cut back on discretionary spending like dining out and electronics.
- Even tax returns, once a source of discretionary income, are now being used to pay down debt or bolster savings. This shift highlights a significant departure from recent years.
As we approach the holiday season, it’s crucial to closely monitor both economic indicators and evolving consumer behavior to ensure our strategies remain effective.
Condensed Holiday Shopping
This holiday season, Thanksgiving’s late arrival on November 28th (five days later than last year) presents an additional challenge for consumers. It’s crucial to analyze early 2024 spending patterns to understand shopper behavior.
- Early season spending showed modest growth of 1-5%, but Mother’s Day marked the first decline in intended spending in six years. However, actual spending slightly exceeded expectations, with consumers prioritizing experiences over tangible gifts like jewelry and apparel.
- Looking ahead to back-to-school, eMarketer predicts the slowest sales growth in 5 years. This, coupled with early season trends, necessitates close monitoring of consumer behavior as we approach the holidays. Understanding where shoppers are investing their time and money will be key to attracting and converting them later in the year.
Election Impact
Lastly, we looked at the implications of 2024 being a Presidential election year.
Many advertisers are concerned about the implications of what this means going into November and into December on both the intent and the spending surrounding shoppers.
- If we take a look at historical search data, we can see that the shift in search volume over the last five years showcases that in an election year such as 2020, shopper spend doesn’t decline, it’s just deferred.
- During an election year, typically, we see the bump fall about seven to nine days after voting day, while in a non-election year, this would typically take place four to five days earlier.
- This expected shift would land the peak for 2024 around November 13th to 15th. This is especially important because this lands roughly two weeks before Cyber – a window that traditionally sees acceleration into the anticipated promotional period.
The Consumer Mindset
Let’s take a look at the season itself and consumer mindsets depending on when they are shopping in the season.
The value of consumer connections can truly be felt when you better understand how consumers shop and where they find value as they progress through the season. Last year, Google introduced the four holiday mindsets, a data-driven approach to uncover what matters to shoppers – giving you more control over landing the right message for the moment.
This year we see the return of the four holiday mindsets:
- From October to early November, the holiday shopper is Deliberate. Holiday shoppers want to get started early, but may take their time with purchases. And those who are buying are even deliberate about that – often purchasing so they can spread out their spending.
- Come Cyber, we see Deal Seeking behavior take off. Not surprising, but you might be surprised to find that the Deal-seeking mindset is reshaping the Cyber period.
- In December, the shopper becomes Determined. Holiday shoppers will do what they need to get what they want – it’s crunch time, and so omni strategy moves to the forefront.
- Finally, the Devoted mindset. Starting Christmas Day, holiday shoppers start buying for themselves, giving you the chance to connect with loyal shoppers and build momentum into 2025.
Since last season, Google has taken the time to analyze shoppers’ behavior as they move between the mindsets – decoding the findings from each. One of the main questions to address: How do shoppers juggle their time, their money, and their decision-making? Google analyzed each of these elements throughout each mindset.
In the chart above, you’ll see a comparison between the percent of calendar days that fall within each mindset starting on October 1st through January 1st. It also includes the percent of decisions that are made within each mindset. And lastly, the percent of spend that occurs within each one as well.
So, What Did Google Learn?
Typically when we think about the Deliberate period, we associate it with research. However, as we take a closer look, the deliberate shopper represents almost two-thirds of the holiday season, with nearly half of the decisions made by the time we enter Cyber Week. While we don’t always associate the Deliberate mindset with spend, based on retail Mastercard SpendingPulse data, 52% of a holiday shopper’s spend for the season falls before Cyber 12 (November 26 through December 7). If you’re not investing here, you’re not changing minds. You’re not establishing consideration, and you’re not capturing a significant percentage of the season’s spend.
Cyber Week serves primarily as a period for finalizing purchases, not for extensive deliberation. The vast majority of decisions are made well before Cyber Week begins.
The Determined Shopper phase, despite its relatively short duration, witnesses a disproportionately high volume of transactions and decisions. This is driven both by the urgency of completing gift lists and the time constraints pushing shoppers towards last-minute choices. This year, with the Determined phase shortened by five days, retailers must establish a strong omnichannel presence early on. Shoppers will be eager to quickly assess inventory availability and local pickup options.
Finally, the Devoted Shopper segment reveals continued spending and decision-making activity. However, the implications of this phase extend far beyond the final week of the year, significantly influencing Q1 strategies and outcomes — a topic we’ll explore in more detail shortly.
The Deliberate Shopper
When we consider the Deliberate Shopper mindset, we often default to associating it solely with research and openness to new brands. While this is certainly true, the Deliberate phase is far more critical than we might initially assume. As we’ve seen, it’s a period of active decision-making, with shoppers not just exploring options, but actively narrowing their choices.
Data shows that branded searches significantly accelerate and peak before Cyber Week. This means shoppers are actively seeking out specific brands and products before the promotional frenzy begins. For retailers, this underscores the importance of establishing strong brand awareness and positioning yourself in the shopper’s consideration set early on. If you haven’t made an impression by the time Cyber Week arrives, it becomes increasingly difficult to break through the noise as branded searches decline.
This pattern isn’t limited to general brand searches. Even when we examine brand-specific promotional queries, such as “Lululemon promotion” or “La-Z-Boy Cyber Sale,” we see the same pre-Cyber Week peak. Shoppers are clearly conducting their research in advance and deciding which brands to prioritize before they enter the peak promotional period. This highlights the need for retailers to not only build brand awareness but also to actively communicate their promotional offerings early in the season.
Additionally, October and November present a prime opportunity for retailers to attract new customers and reignite relationships with lapsed buyers. A recent analysis of similar web data reveals a notable trend: several top retailers experience a higher influx of new users in October and November compared to the post-holiday months of January and February.
This heightened receptivity isn’t confined to the holiday season; in fact, retailers won’t encounter a more open shopper base until well into Q1. This emphasizes the critical importance of capitalizing on this window of opportunity now. By fostering brand loyalty throughout the holiday season, retailers can ensure a lasting impact that extends well into the new year, setting the stage for sustained success in Q1 and beyond.
The Deal Seeker
Last year, we saw Cyber shoppers ready and waiting to strike the best deals from retailers across the country.
According to Google’s slides, two out of three shoppers held out for retailer’s discounts before buying gifts, and 74% of holiday shoppers chose where to buy based on who offered the best deals.
This behavior delivered two record-breaking sales days – Black Friday and Cyber Monday.
We expect this behavior to continue into Cyber 12 during the upcoming holiday season.
The Determined Shopper
The Determined mindset is one to pay close attention to this holiday season. It may be the most challenging to win with five fewer shopping days – but the reward is with the effort, as it could redefine your season. Dates for the determined shopper run December 8th to 24th.
The next shopper mindset transition is critical – moving from Cyber shopping into the final December push – entering the “Determined” shopper phase.
This year’s holiday success – even more so than others in the past – is highly dependent upon your ability to win the Determined shopper. These consumers will have HALF of their shopping still left to compete – but with nearly a week less time to do it this year.
What Does This Mean?
Those five fewer days post-Cyber 12 represent over $100B ($21B / day x 5 days) that will need to be reallocated or shifted to make up for the lost shopping window.
Let’s take a closer look at the value December brings to the table by comparing it to Cyber 12.
In a head-to-head comparison, we can see that Determined exceeded Cyber in both demand AND click growth last year. Additionally, both periods matched on average consumer daily spend. However, when you look deeper, you’ll notice that the 12 days prior to Christmas have a higher average daily spend at $22B – making it a highly critical period.
Cyber 12 may be known for “milestone” days like Black Friday and Cyber Monday. However, December holds eight top spending days versus only six during Cyber 12. Cyber Monday was actually only the 15th most valuable day of the season. Super Saturday is especially one not to underestimate, as it rivaled Black Friday in-store traffic leading into Christmas Day.
The Devoted Shopper
Our last shopper mindset is the Devoted Shopper, and you can’t afford to miss it. The final week represents the same percentage of sales for the season as Cyber Week. After Black Friday, the day after Christmas was the second-highest day for shopping-related YouTube searches! And interestingly, App downloads skyrocket.
The Devoted Shopper phase is marked by a significant focus on self-gifting, with nearly half of shoppers indulging in purchases from beloved brands. As mentioned earlier, this period sees a lower propensity for exploring new retailers, making it a prime opportunity to capitalize on the loyalty and brand affinity cultivated and earned throughout the holiday season.
Loyalty programs play a pivotal role in driving shopper decisions during this phase, with nearly two-thirds of consumers considering such programs when making purchases. Furthermore, a substantial 40% of shopping searches on Google in January and February explicitly mention a brand or retailer name, underscoring the importance of establishing a strong brand presence and fostering customer loyalty.
This is the moment for retailers to reap the rewards of their holiday efforts, offering personalized incentives, exclusive access to products, and tailored experiences that reinforce the emotional connection with their most valued customers.
The 2024 holiday season presents unique challenges and opportunities shaped by economic pressures, a condensed shopping timeline, and the impact of a presidential election year. Retailers must adapt to these dynamics by closely monitoring consumer behavior and strategically engaging with shoppers throughout the season’s distinct phases. Understanding the deliberate, deal-seeking, determined, and devoted mindsets will be crucial in capturing consumer attention and driving sales.
By prioritizing early brand positioning, offering compelling promotions, and maintaining a strong omnichannel presence, businesses can navigate the complexities of this holiday season and position themselves for success well into the new year.
Read here for part 2, all about how to take that information and best position paid search advertisers to be ready for the holidays.
