01 Dec Spending Habits to Anticipate this Holiday Season
With the holidays coming up and so much uncertainty around the economy, consumers are pinching their pennies more than in other years. A recent Zenzi survey confirmed that 7 in 10 people are either “very” or “somewhat” concerned about an upcoming recession, and 61% of people said they are spending less on discretionary purchases in anticipation of an upcoming recession.
Given consumer’s wariness, what can your business do to “recession-proof” itself this holiday season? How can you be sure you are targeting the right audience with the right messaging to thrive in what figures to be a less robust holiday spending season?
To answer these questions, Zenzi surveyed 503 U.S. residents in October 2022. . We asked participants to complete the Zenzi Values Scale and answer questions about a potential recession and their holiday shopping plans. In this post, we’ll study Shows How 61% of People Are Spending Less This Holiday Season.
Spending Habits to Anticipate this Holiday Season.
Will the Recession Make A Dent This Holiday Season? Here are 3 key findings that reinforce why understanding your customer’s core values is crucial to “recession-proofing” your business this holiday season.
- VALUES DETERMINE GIFT PREFERENCES
Tools such as Amazon wish lists have given consumers an easy way to ask for the gifts they want to receive, rather than relying on their friends and family having to guess. What’s more, our survey revealed that only 28% of people want to pick their own gifts, with everyone else preferring, or at least being open to, buying gifts the recipient asks for. Here is what our survey revealed as the most desired gifts for each of Zenzi’s six value types:
Achievement seekers: Tech Gadgets
Pleasure seekers: Video Games
Freedom seekers: Travel
Purpose seekers: Books
Tradition seekers: Kitchen Gadgets
Security seekers: Perfume & Cosmetics
Knowing which value type(s) want to receive your product or service will allow you to target them and potential gift givers appropriately. This is especially important for e-commerce, given that 67% of our survey respondents said they would like to receive a gift card or money this year, and 33% said they would spend more on gift cards than any other type of gift.
- VALUES INFLUENCE SPENDING BEHAVIOR
We asked respondents to indicate what, if any, changes they were making to their holiday spending this year in anticipation of a recession. The two most frequent responses were:
- “Spending less on discretionary purchases” (61%)
- “Saving more for emergencies” (45%)
We then broke down spending behaviors by our value types and found differences in the changes they plan to make. Here is what the value types are focusing on:
Achievement seekers: “Buying less luxuries and trying to only buy necessities.”
The usually status-conscious Achievement Seekers are toning down their taste for the finer things this holiday season. If they are your target audience, this may be the year to emphasize the practical rather than the prestigious.
Purpose-seekers: “Shopping sales, looking for bargains, using coupons or promo codes” and “Buying for fewer people.”
Community-minded Purpose Seekers are tightening their purse strings this year by looking for bargains and shortening their gift lists. To attract Purpose Seeker dollars, consider running a promotion or highlighting how their purchases help local businesses.
Security-seekers: “Saving or putting money aside for gifts” and “Buying less expensive gifts.”
Family-oriented Security Seekers always keep a close watch on their spending, but this year they’re actively saving to buy gifts for their loved ones. To reach them, consider promoting some of your less expensive offerings and emphasizing the sensible savings they will enjoy.
- BRICK AND MORTAR IS STILL IMPORTANT
It’s no secret that holiday shopping continues to shift online, a trend bolstered even more by the pandemic. Indeed, in our survey, 77% of people say they plan to do most of their holiday shopping online this year. But plenty of people still fill the stores around the holidays. Who are they? Our survey found that Achievement Seekers and Freedom Seekers were 49% and 31%, respectively, more likely than average to say they will primarily shop in-store this year. So if your target customer is an Achievement or Freedom Seeker, don’t overlook those brick-and-mortar locations just yet. Tap into Zenzi’s collection of insights to learn what will attract them to your stores and motivate them to spend their limited holiday budgets there.
To maximize your business’ revenue this holiday season, it is vital to go beyond demographics and get to the heart of what motivates consumers on a psychological level. Want to know which value type you should be targeting? Visit our website at zenzi.com to schedule a call with our team.