Black Friday is upon us! And though it seems every marketer is pulling out all the stops to get consumers to buy their stuff, there’s a good amount of uncertainty among the general population about how much they want to or plan to spend.
Horizon Media’s WHY Group, which is charged with understanding consumer behavior at a deeper and more granular level, plans to issue a report identifying three differing psychological states of mind that consumers are in this holiday season. These groups are affected by recessionary fears and inflation.
To amass its knowledge, Horizon conducted two studies of a nationally representative panel, in June (of 1,094 respondents) and October(1,067) of this year.
In short the three groups break down to:
The resilient: this cohort is generally more financially well-off. They apparently plan to spend more this year than last year and are more likely to treat themselves well.
The vulnerable: a younger cohort, they are less established and have less buying power. With real financial worries, they stress more about getting through the holidays. But they deal by looking out for life hacks and reshuffling priorities.
The anxious: This cohort tends to run older and more likely to be retired. As their title implies, the group’s worries may be more psychological than truly financial, nevertheless they’re expected to spend far less this year (23% claiming they will spend nothing).
“The key to understanding consumer behavior during this holiday season is not just economics but behavioral economics. The usual tensions and emotions of the holidays… are deeply affected by inflation,” said Steve Grant, senior vp of human intelligence of WHY Group. “For example, negative emotions drive behavior change, especially shopping. Optimistic shoppers are more willing to spend while pessimists are less likely — all regardless of actual bank balance. Understanding how these critical heuristics play against the three segments means marketers can be much smarter about what marketing and messaging to employ and among what groups to more efficiently achieve seasonal revenue goals.”
Horizon’s research also suggested to brands a few takeaways that should guide their branding activity over the next month:
- Successful retailers will need a multi-part strategy: one that reduces the pain and anxiety that the majority of people are feeling around inflation, and another that caters to the resilient cohort.
- Message to the resilient shopper often, especially for higher-priced luxury items that are within reach for them. Targeted “treat yourself” ads should have an impact, especially with men.
- The anxious cohort will be tough to convince to spend. They are in “real psychological pain,” the research concludes, and upbeat messaging won’t be of help. Focus on the season and avoid personalization, which turns them off. Practical goods, especially those made in the U.S. hold the most appeal to them.
- The vulnerable cohort are looking for deals, opportunities like Black Midnight and Black Friday – where they are twice as likely to shop.
- Men are more likely to shop and spend if brands make it quick, easy and tactile. The study found that 54% of men will spend more than $600 this year on the holidays. Plus, they’re more than twice as likely to secretly shop for themselves.
- Women feel more stressed about holiday shopping, regardless of cohort. Nearly 3 in 5 (59%) are “actively seeking the emotional payoff of feeling inspired that comes from great holiday shopping,” according to the research. Free shipping, no-questions-asked returns, and no-surprise fees are good incentives to purchase.
Meanwhile, DTC advertisers are being especially active in adjusting to different moods in the country, according to agency Belardi Wong, which specializes in DTC marketing. For one, Black Friday sales by marketers are getting spread throughout the month, as the agency saw 21% lift in sales from the second week in November to the third.
Belardi Wong president Polly Wong noted that some consumers have taken advantage of early discounts, but many of them are willing to wait for the best deals during the Cyber 5 — the shopping-intense five day period between Thanksgiving and Cyber Monday, which this year is on Nov. 28.