5 Key Insights from BFCM Consumer Trends Report 2023

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📆 Wednesday, 25th October 2023

Hi, and welcome to this edition of Growth Espresso - Your one-stop destination for 👏 all things 👏 DTC.

Today, we’re dissecting BFCM Consumer Trends Report 2023 (full report) and deriving key insights which will shape your sales figures this festive season 📈 

So are the holiday trends looking….good? cautious? a mix of both? 🎅

Answers to all of that, coming right up! 👇️ 

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…Now back to BFCM consumer spending forecasts

1. Customers are cutting costs

The US economy is a bit uncertain right now. Some things are good, like inflation going down, but interest rates are going up, and it's hard to find a job. People's feelings about the economy are also mixed.

Although consumer spending has gone up since late 2022, we have also witnessed consumers trying to save by buying cheaper stuff and sometimes splurging on specific things.

Under the influence of inflation and economic impact, most customers will either buy holiday items on sale or buy fewer items overall.

According to Numerator, 88% of respondents acknowledged that inflation would affect their holiday spending, with 67% of them planning to hunt for significant bargains as their strategy to mitigate the impact.

2. Customers are embracing social commerce

As brands increasingly embrace social media checkout and shopping features, tech-savvy millennials and Gen Z, who are influenced by and familiar with influencer content, are expected to actively engage in social commerce.

Online retailers now have the advantage of using integrated eCommerce platforms like TikTok Shop, Instagram Shopping, Facebook Shops, and Pinterest's shoppable ads to effectively target potential customers. The growing trend of shopping through social media platforms is exemplified by TikTok's recent introduction of in-app shopping, eliminating the need for external web browsers.

The key to the success of social shopping lies in influencer marketing, where shoppers are more likely to make purchases if recommended by a popular social influencer. By combining influencer marketing with live shopping, you can further enhance your holiday sales potential. This approach not only drives organic traffic and attracts new customers at a lower cost but also provides an impressive return on investment!

3. Cyber Monday will continue to be the biggest shopping day for customers

Although Black Friday comes first, the spotlight for the biggest sale event of the year belongs to Cyber Monday.

Online sales during the BFCM 2022 period reached a staggering $11 billion on Cyber Monday and $9.12 billion on Black Friday, as reported by TechCrunch.

During Black Friday 2022, consumers showed a higher inclination towards purchasing clothing, shoes, and accessories, with 53% of shoppers allocating their budget to this category.

On the other hand, Cyber Monday 2022 saw a greater focus on electronics, as 43% of consumers chose to spend their money on electronic items.

4. Expect and prepare for a high return rate

Annually, the holiday season typically witnesses a return rate of around 17.9%. This is mainly influenced by various factors, including recipients not being thrilled with their gifts or shoppers having second thoughts about their holiday spending.

As a result, eCommerce companies see a significant increase in returns during December, January, and February, especially when compared to other times of the year.

Dealing with the high return rate during the holiday season

• If you're an online brand with physical stores, offering the option for customers to return items in-store can be a win-win. It provides convenience and an opportunity to engage with customers

• For eCommerce-only brands, a popular returns process involves customers sending items back to the brand's warehouse for eligibility confirmation.

5. The most popular products to sell during the holiday season

According to Statista's research on holiday gift intentions, more than 75% of respondents plan to buy gifts for their loved ones in the upcoming holiday season. In addition, Adobe's research for 2022 highlighted popular holiday products, including toys, games, electronics, and items like air fryers and gift cards.

Fashion and apparel emerged as the most popular gift category, making up 45% of gift purchases during the 2022 holiday season, followed by toys and games at 35% and beauty items at 32%.

A better proxy to judge the most popular category could be to see the trends during Amazon Prime Day 2023

As in the report, the top categories purchased are Home Goods (27%), Household Essentials (26%), Apparel & Shoes (25%), Consumer Electronics (21%), and Beauty & Cosmetics (20%).

Parting note

By keeping up with the latest information about holiday shopping and understanding what customers like, you can confidently do well in the 2023 holiday season, which is a busy time for businesses.

If you follow these trends and focus on making your customers happy, you're on the right track for a successful holiday season.

Happy Black Friday and Cyber Monday! 🎉