With Halloween in the rearview mirror, retailers are now laser-focused on the finish line of Q4 – the holiday season. For weeks, we’ve been teased with hints of the upcoming shopping festivities, whether it’s an “early Black Friday deal” or an email touting “holiday must-haves.” Those subtle whispers are about to transform into booming bellows, declaring hot items and unbeatable prices. Prepare for your inboxes to be inundated with offers and gifts with purchase, all wrapped up in the bow of free shipping.
As these familiar sounds fill retail stores and cyberspace, let’s keep in mind that the surrounding macro-environment is not all smooth sailing for consumers. This Christmas might prove to be the most puzzling to unwrap for apparel brands and retailers, given the mixed consumer sentiment and squeezed finances.
What Consumers Are Looking For
This holiday season, the path to success for retailers isn’t just about offering the trendiest items at the best prices. Consumers are seeking that perfect balance between value and desire to get the most out of their budgets, which are more limited this year. A whopping 41% of consumers emphasize the importance of overall value when choosing where to shop for holiday gifts, according to findings from Circana’s annual U.S. Holiday Purchase Intentions report. The challenge, though, is that “value” can mean something different to each consumer, particularly in the realm of apparel.
For Gen Z, value translates to uniqueness; they crave retailers offering distinct products and brands. Meanwhile, Millennials with young families may prioritize convenience; value, in their eyes, can mean expedited shipping. Boomers, on the other hand, maybe more inclined towards retailers with a straightforward return policy if something doesn’t quite fit. However, one theme stands out prominently and extends across all generations: free shipping. Circana’s holiday study found that an overwhelming 48% of consumers declare free shipping as the determining factor in their holiday shopping destination. As additional costs encroach on consumers’ budgets, free shipping becomes an essential expense they’re unwilling to compromise on.
Free shipping, while alluring, isn’t the only catalyst for online sales; social media has become an effective research tool, with the potential to lead to more “buy now” clicks. One-in-five consumers intend to use social media for product research this holiday season. Notably, TikTok has seen remarkable growth as a platform for product exploration. The TikTok trend is also translating to sales for the apparel market, as quantified by Circana data which shows that TikTok’s daily users between 18- and 34-years-old outspend daily Instagram and YouTube users. With TikTok Shop streamlining the purchase of products that flood your feed, we may see this platform bring in even more sales for apparel during Q4.
Despite consumers trekking more cautiously this holiday season, the apparel market has opportunities. Clothing tops the list of gifts consumers plan to give, with 40% intending to gift apparel during the holidays. What clothing items are likely to land on the coveted gift list? Look no further than replenishment needs to motivate purchases. Last year, tailored clothing grew as people refilled their wardrobes. However, as consumers attain a fully replenished dressy wardrobe, further need to spend on this clothing will taper off. Instead, basics like socks and underwear and casual wear have the potential to sell well. Parents may turn to gifting these practical necessities to their kids, to add one more wrapped gift under the tree.
In this holiday season’s retail race, winning doesn’t mean sprinting to the finish line; it’s about understanding the unique value your consumers seek, embracing the power of social media, and recognizing the enduring appeal of apparel in our gift-giving traditions.
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