The Future of Digital Advertising in 2025: What’s Next?
Digital advertising is constantly evolving, and as we move into 2025, the landscape is shifting in exciting ways. For business owners like you—whether you run a restaurant, bar, law firm, used car dealership, or are a small business owner—it’s critical to stay ahead of the curve. The trends we’re seeing this year are game changers for how you attract and engage customers. Let’s dive into what’s next for digital advertising in 2025. Personalization Goes Next Level In 2025, personalization isn’t just a buzzword—it’s the standard. Thanks to advances in artificial intelligence (AI), ads can now be hyper-targeted to individual preferences. Imagine this: a potential customer searches for “best seafood near me,” and within seconds, they see a tailored ad for your restaurant showcasing a mouthwatering shrimp special. Why it matters for your business: Personalized ads improve click-through rates by up to 300%, according to recent studies. If you’re not leveraging AI to create targeted campaigns, you’re leaving money on the table. The Rise of Video Advertising Video content is king in 2025. Short-form videos, like TikToks and Instagram Reels, dominate consumer attention spans, but don’t overlook platforms like YouTube and Facebook for longer, storytelling-driven ads. If you’re a used car dealer, a quick video showcasing your best deals or a happy customer’s experience could bring in leads faster than a static ad. Pro tip: Keep your videos short and sweet—15 to 30 seconds is the sweet spot for maximum engagement. Interactive Ads Steal the Show Customers love to engage with brands that make them feel part of the experience. Interactive ads, like polls, quizzes, or swipeable carousel ads, are more effective than ever. For example, a bar could use a fun quiz to help customers “find their perfect cocktail,” turning casual browsers into loyal patrons. Quick stat: Interactive content generates twice the engagement as static ads, making it a powerful tool for building relationships with your audience. Local Search Ads Are a Must-Have For businesses that rely on local customers, local search ads are crucial in 2025. Google and other platforms prioritize ads that show up in local searches. Whether you’re a law firm or a bakery, ensuring your ads appear when someone searches “near me” is essential to driving foot traffic. Actionable tip: Verify your Google My Business profile and ensure your address, hours, and services are up-to-date. This small step can boost your visibility in local searches dramatically. Sustainability Messaging Gains Traction Consumers in 2025 care deeply about sustainability and supporting businesses that align with their values. Whether you’re running a farm-to-table restaurant or a dealership with a focus on electric vehicles, showcasing your efforts to be eco-friendly can attract a broader audience. Did you know? A Nielsen study found that 73% of millennials are willing to pay more for sustainable products and services. Highlighting your green initiatives can set you apart from competitors. Get Started Today The future of digital advertising is here, and it’s more dynamic, personalized, and impactful than ever. Staying on top of these trends can help your business thrive in 2025 and beyond. Whether you’re optimizing your local search ads, creating engaging video content, or leveraging interactive ads, the key is to start now. If you’re ready to explore how these strategies can work for your business, let’s talk! Together, we can create campaigns that resonate with your audience and drive real results. Email: [email protected]: 973-6-IMGA-NJ (646-4265)
The Power of Reflection: How to Assess Your Marketing Efforts in 2024 and Prepare for Success in 2025
As the end of the year approaches, now is the perfect time for businesses to pause, reflect, and assess their marketing efforts over the past 12 months. In a constantly evolving industry, taking time to evaluate what worked, what didn’t, and where there are opportunities for improvement can be incredibly valuable. In this blog, we’ll dive into the power of reflection and guide you on how to analyze your marketing strategies, identify key takeaways, and set yourself up for success in 2025. Why Reflection Matters Reflecting on the past year gives you a clearer picture of where you are and what you’ve accomplished. It also allows you to pinpoint areas that need attention and provides insights into the most effective tactics moving forward. It’s like looking in the rearview mirror before accelerating into the future! Key Areas to Reflect On Setting Your Marketing Goals for 2025 Once you’ve reflected on 2024, it’s time to think ahead. Setting clear, measurable goals for the upcoming year ensures that you’re aligned with your brand’s mission and objectives. Here’s how to prepare: Conclusion: A Fresh Start for 2025 Reflecting on your marketing successes and challenges from 2024 gives you the tools to improve in 2025. With the new year on the horizon, it’s time to capitalize on what you’ve learned and use that knowledge to guide your marketing strategies. Taking the time to review and plan will help you navigate an ever-changing landscape and ensure your business is primed for success. Looking for help navigating 2025? At IMG Advertising, we’re here to guide you through the process of setting fresh marketing goals, crafting impactful strategies, and executing campaigns that deliver results. Let’s make next year your most successful yet! Email: [email protected]: 973-6-IMGA-NJ (646-4265)
Building Brand Loyalty in the Digital Age: Effective Strategies for Customer Retention
In the fast-paced digital age, building and maintaining brand loyalty is more challenging and crucial than ever. With countless options at consumers’ fingertips, businesses must go the extra mile to retain their customers. Here are some effective strategies for customer retention that can help build lasting brand loyalty: Personalized Customer Experiences One of the most effective ways to build brand loyalty is through personalization. Tailoring your products, services, and marketing messages to meet the specific needs and preferences of your customers can significantly enhance their experience. Did you know that 80% of consumers are more likely to make a purchase when brands offer personalized experiences? Use data analytics to understand your customers better and deliver content that resonates with them. Excellent Customer Service Outstanding customer service is the cornerstone of brand loyalty. Responding promptly to queries, addressing concerns, and going above and beyond to assist customers can create a positive impression. Train your customer service team to be knowledgeable, empathetic, and solution oriented. Engaging Content Creating engaging and valuable content helps keep your brand top-of-mind for your customers. Use blogs, social media posts, newsletters, and videos to provide information, entertainment, and education. Make sure your content is relevant and interesting to your audience. Offer Exclusive Perks and Rewards A loyalty program can make a big difference in customer retention. Whether it’s points for purchases, early access to sales, or free shipping, exclusive perks show customers they’re valued. Fact: 84% of consumers are more likely to stick with a brand that offers a loyalty program. Community Building Building a sense of community around your brand fosters loyalty. Encourage customers to join your social media groups, participate in events, and engage with each other. Creating a space where customers feel connected to your brand and to one another can enhance their loyalty. Be Transparent and Authentic In the digital age, authenticity is everything. Be upfront about your values, practices, and even mistakes. Customers appreciate honesty and are more likely to support brands they trust. Tip: Share your company’s mission, sustainability efforts, or community involvement. These actions help your brand stand out as genuine and relatable. Consistent Communication Keep your customers informed and engaged through consistent communication. Regular updates about new products, services, and company news can keep your customers in the loop and remind them of your brand. Use email newsletters, social media, and other channels to stay connected. Ask for Feedback—and Act on It Loyal customers appreciate being heard. Regularly collect feedback through surveys or reviews and take meaningful action on their suggestions. Example: If customers suggest improving a product or service, show them you’re listening by implementing changes and sharing updates. Conclusion Building brand loyalty in the digital age is both a challenge and an opportunity. By focusing on personalized experiences, exceptional customer service, and meaningful engagement, businesses can create deeper connections with their audiences. Strategies like offering exclusive rewards, fostering a sense of community, and maintaining transparency help to not only retain customers but turn them into enthusiastic advocates for your brand. Remember, loyalty is earned through consistent effort and genuine interactions. As consumer expectations continue to evolve, staying adaptable and committed to providing value will set your brand apart. Ready to take your customer retention strategies to the next level? At IMG Advertising (Ifodige Media Group), we specialize in crafting loyalty-driven campaigns that resonate with your audience and drive results. Let’s work together to build stronger, lasting connections. Contact us today for a FREE consultation! Email: [email protected]: 973-6-IMGA-NJ (646-4265)
Gen Z Deserves Some Credit for Responsible Card Use
By Charlotte Principato All U.S. consumers are grappling with inflation, but the country’s youngest adults are doing so while also trying to establish their financial footing. While this certainly presents challenges for Gen Z adults, recent Morning Consult data indicates that when it comes to credit, the kids are all right: Not only are Gen Z adults accessing credit through credit cards at the same pace as older generations, but they’re managing their debt better, too. Gen Z adults are not credit-shy There’s a misconception that younger adults are reluctant to use credit cards. This narrative originated after the Great Recession, when millennials were the youngest adult generation, but it has been extended to Gen Z as they have entered adulthood. However, as of early 2023, Gen Z adults’ use of credit cards is on par with their Gen Xer parents: 63% of each generation own at least one credit card, and the majority of credit card owners report that they have more than one. A lot has happened since millennials were the youngest adult generation and were said to be shying away from credit. The Credit Card Accountability Responsibility and Disclosure Act of 2009 limited the marketing and issuing of credit cards to young adults. Additionally, millennials emerged from the Great Recession’s high unemployment and entered midlife and parenthood, life stages that are associated with more expenses and a greater need for credit. Gen Zers, by contrast, are entering adulthood without being bombarded by credit card offers the way millennials were, with a heightened understanding of the dangers of credit card debt after seeing its impact on older generations, and in the midst of a tighter labor market that can make responsible credit use much more achievable and less daunting. Less than a third of Gen Z adults have credit card debt Compared with other generations, Gen Z adults are less likely to say they have outstanding credit card debt. Less than a third of Gen Z adults (30%) report having any credit card debt, meaning most are not carrying an outstanding balance on their cards from month to month. This is a considerably smaller share than the roughly 40% of millennials, Gen Xers and baby boomers who report the same. Not only are Gen Z adults less likely to have any credit card debt, but the debt they do have is much lower than that of older generations. The median credit card payment for the months of January and February was $400 for all U.S. adults; boomers’ median payment was higher at $500, and Gen Z adults’ was roughly half that at $244. These young adults aren’t just chipping away at their outstanding balance each month — they’re also prioritizing paying off their entire credit card debt more than older generations. Gen Z’s median outstanding credit card debt is $303, so their $244 median monthly payment covers nearly all of their debt. The same isn’t true of older generations, for whom the gap between total balance and payment last month is much wider. Gen Xers report the widest gap, with a median outstanding credit card debt of $2,000 and a median monthly payment of $400. Many factors contribute to Gen Z’s comparatively lower credit card debt: fewer fixed expenses in general at this stage of their lives, lower credit card limits that are typical of younger borrowers who are still establishing creditworthiness and leftover savings from pandemic stimulus payments that have helped them keep debt at bay. However, Gen Zers still deserve credit (pun intended) for staying on top of their debts. The youngest generation of adults seems to understand how to responsibly use revolving credit — that is, by effectively treating it as debit, or paying off as much of their balance as possible each month. They likely learned about the dangers of compound interest and are especially wary of carrying a balance in a rising-rate environment. Gen Z’s credit card management is a bright spot amid wider financial concerns Financial services leaders must remember that it’s not all sunshine and roses for Gen Zers as they begin their financial lives. The current macroeconomic environment and the toll of the coronavirus pandemic are still evident in Gen Z’s financial well-being struggles. Gen Z adults feel their financial security is tenuous at best. Morning Consult’s Financial Well-Being Scale reveals that only 22% of them believe they could handle a major unexpected expense, and 39% say their finances control their life as of January. Their long-term outlook is suffering as a result: Less than a third of Gen Z adults (31%) say they are securing their financial future, and 32% believe that because of their money situation, they will never have the things they want in life. Perhaps Gen Z adults are being too hard on themselves when thinking about their financial future. They appear to be starting off on the right foot in their credit journey, but leaders should nevertheless remain empathetic to the anxiety the youngest adults feel about their finances overall.
US Consumer Confidence Declined in January
Source: January 2023 Consumer Confidence Survey® The Conference Board Consumer Confidence Index® decreased in January following an upwardly revised increase in December 2022. The Index now stands at 107.1 (1985=100), down from 109.0 in December (an upward revision). The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to 150.9 (1985=100) from 147.4 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 77.8 (1985=100) from 83.4 partially reversing its December gain. The Expectations Index is below 80 which often signals a recession within the next year. Both present situation and expectations indexes were revised up slightly in December. “Consumer confidence declined in January, but it remains above the level seen last July, lowest in 2022,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board. “Consumer confidence fell the most for households earning less than $15,000 and for households aged under 35.” “Consumers’ assessment of present economic and labor market conditions improved at the start of 2023. However, the Expectations Index retreated in January reflecting their concerns about the economy over the next six months. Consumers were less upbeat about the short-term outlook for jobs. They also expect business conditions to worsen in the near term. Despite that, consumers expect their incomes to remain relatively stable in the months ahead. Meanwhile, purchasing plans for autos and appliances held steady, but fewer consumers are planning to buy a home—new or existing. Consumers’ expectations for inflation ticked up slightly from 6.6 percent to 6.8 percent over the next 12 months, but inflation expectations are still down from its peak of 7.9 percent last seen in June.” Present Situation Consumers’ assessment of current business conditions improved in January. Consumers’ appraisal of the labor market was also more favorable. Expectations Six Months Hence Consumers became more pessimistic about the short-term business conditions outlook in January. Consumers were less upbeat about the short-term labor market outlook. Consumers’ short-term income prospects held steady.
Inflation is cooling, but prices on many items are going to stay high for months.
by Melissa Repko & Amelia Lucas Inflation may be cooling. But, for most Americans, the price of a cup of coffee or a bag of groceries hasn’t budged. In the months ahead, the big question is whether consumers will start to feel relief, too. Over the past few months, many of the key factors that fueled a four-decade high in inflation have begun to fade. Shipping costs have dropped. Cotton, beef and other commodities have gotten cheaper. And shoppers found deeper discounts online and at malls during the holiday season, as retailers tried to clear through excess inventory. Consumer prices fell 0.1% in December compared with the prior month, according to the Labor Department. It marked the biggest monthly drop in nearly three years. But cheaper freight and commodity costs won’t immediately trickle down to consumers, in part due to supplier contracts that set prices for months in advance. Prices are still well above where they were a year ago. The headline consumer price index, which measures the cost of a wide variety of goods and services, is up 6.5% as of December, according to Labor Department data. Some price increases are eye-popping: The cost of large Grade A eggs has more than doubled, while the price tags for cereal and bakery products have climbed 16.1%. “There are some prices, some goods for which prices are falling,” said Mark Zandi, chief economist of Moody’s Analytics. “But broadly, prices aren’t falling. It’s just that the rate of increase is slowing.” Retailers, restaurants, airlines and other companies are deciding whether to pass on price cuts or impress investors with improved profit margins. Consumers are getting pickier about spending. And economists are weighing whether the U.S. will enter a recession this year. Sticky contracts, higher wages During the early days of the Covid pandemic, Americans went on spending sprees at the same time that factories and ports shuttered temporarily. Containers clogged up ports. Stores and warehouses struggled with out-of-stock merchandise. That surge in demand and limited supply contributed to higher prices. Now, those factors have started to reverse. As Americans feel the pinch of inflation and spend on other priorities such as commutes, trips and dining out, they have bought less stuff. Freight costs and container costs have eased, bringing down prices along the rest of the supply chain. The cost for a long-distance truckload was up 4% in December compared with the year-ago period, but down nearly 8% from March’s record high, according to Labor Department data. The cost of a 40-foot shipping container has fallen 80% below the peak of $10,377 in September 2021 to $2,079 as of mid-January, according to the World Container Index of Drewry, a supply chain advisory firm. But it is still higher than prepandemic rates. Food and clothing materials have become cheaper. Wholesale beef prices dropped 15.6% in November compared with a year ago, but are still historically elevated, according to the U.S. Department of Agriculture. Coffee beans fell 19.7% in the same time, according to the International Coffee Organization’s composite global price. Raw cotton’s cost plunged 23.8%, according to Labor Department data. However, to protect against unpredictable spikes in prices, many companies have long-term contracts that set the prices they pay to operate their businesses months in advance, from buying ingredients to moving goods across the world. For example, Chuy’s Tex Mex locked in prices for fajita beef that are lower than what the chain paid last year, and it plans to also lock in prices for ground beef during the third quarter. But diners will likely still pay higher menu prices than they were last year. Chuy’s plans to raise prices about 3% to 3.5% in February, although it has no more price hikes planned for later this year due to its conservative pricing strategy. The chain’s prices are up about 7% compared with the year-ago period, trailing the overall restaurant industry’s price hikes. Similarly, coffee drinkers are unlikely to see a drop in their latte and cold brew prices this year. Dutch Bros. Coffee CEO Joth Ricci told CNBC that most coffee businesses hedge their prices six to 12 months in advance. He predicts coffee chains’ pricing could stabilize as early as the middle of 2023 and as late as the end of 2024. Supplier contracts aren’t the only reason for sticky prices. Labor has gotten more expensive for businesses that need plenty of workers but have struggled to find them. Restaurants, nail salons, hotels and doctors’ offices will still reckon with the cost of higher wages, Moody’s Zandi said. A shortage of airplane pilots is among the factors that will likely keep airfares more expensive this year. The price of airline tickets have dropped in recent months but are still up nearly 30% from last year, according to the most recent federal data. However, Zandi said, if the job market remains strong, inflation eases and wages grow, Americans can better manage higher prices for airfare and other items. Annual hourly earnings have risen by 4.6% over the past year, according to the Bureau of Labor Statistics — not as high as the consumer price index’s growth in December. Yet in some categories, softening demand has translated to price relief. Several hot pandemic items, including TVs, computers, sporting goods and major appliances have dropped in price, according to Labor Department data from December. Budget pressures for families Top retail executives said they expect families’ budgets will still be under pressure in the year ahead. At least two grocery executives, Kroger CEO Rodney McMullen and Sprouts Farmers Market CEO Jack Sinclair, said they do not expect food prices to drop anytime soon. “The increase is starting to moderate a little bit,” said McMullen. “That doesn’t mean you’re going to start seeing deflation. We would expect to see inflation in the first half of the year. Second half of the year would be meaningfully lower.” He said there are some exceptions. Eggs, for example, will likely become cheaper as as Avian flu outbreak recedes. Over the past two years, consumer packaged goods companies have raised prices of items on Kroger’s shelves or reduced packaging sizing, a strategy known as
Valentine’s Day Spending Projected to Increase to Nearly $26 Billion.
by NRF WASHINGTON – Consumers are expected to spend $25.9 billion on Valentine’s Day this year, up from $23.9 billion in 2022 and one of the highest spending years on record, according to the annual survey released today by the National Retail Federation and Prosper Insights & Analytics. “Valentine’s Day is a special occasion to shop for the people we care most about,” NRF President and CEO Matthew Shay said. “This year, as consumers embrace spending on friends and loved ones, retailers are ready to help customers celebrate Valentine’s Day with memorable gifts at affordable prices.” More than half (52%) of consumers plan to celebrate and will spend an average of $192.80. This is up from $175.41 in 2022, and the second-highest figure since NRF and Prosper started tracking Valentine’s Day spending in 2004. While spending on significant others and family members is in line with last year, many consumers are looking to show appreciation for the other meaningful relationships in their lives. Of the $17 increase in per-person spending, $14 comes from gifts for pets, friends and co-workers, along with classmates or teachers. Those aged 35 to 44 plan to outspend other age groups, allocating $335.71 on average for gifts and other Valentine’s Day items, approximately $142.91 more than the average consumer celebrating the holiday. Similar to recent years, the top shopping destination to purchase Valentine’s Day gifts is online (35%), closely followed by department stores (34%), discount stores (31%) and specialty stores (18%). The top gifts include candy (57%), greeting cards (40%), flowers (37%), an evening out (32%), jewelry (21%), gift cards (20%) and clothing (19%). Americans plan to spend more than $5.5 billion on jewelry and nearly $4.4 billion on a special evening out. About one-third (32%) plan to give a gift of experience, up from 26% last year and the highest since NRF and Prosper started asking this question in 2017. “Men, in particular, are more likely to give a gift of experience compared with last year,” Prosper Executive Vice President of Strategy Phil Rist said. “Another notable finding is more than half of consumers say they will take advantage of sales and promotions as they celebrate Valentine’s Day this year.” Even among those who don’t plan to celebrate Valentine’s Day, 28% will still mark the occasion in some way, seeking non-Valentine’s gifts, treating themselves to something special or planning a get-together or evening out with single friends and family members. As the leading authority and voice for the retail industry, NRF conducted this survey of 7,616 U.S. adult consumers Jan. 3 through Jan. 11. The survey has a margin of error of plus or minus 1.1 percentage points.
Growing Consumer and Business Interest in the Metaverse Expected to Fuel Trillion Dollar Opportunity for Commerce, Accenture Finds
Consumers eager to become active users of the metaverse and show high interest in problem-solving experiences related to fitness, retail, healthcare, travel and media Growing consumer and business interest in the metaverse as a creator economy and tool to enhance day-to-day tasks is expected to fuel a $1 trillion commerce opportunity by the end of 2025, according to findings Accenture released at the Consumer Electronics Show (CES) in Las Vegas. According to the research, more than half (55%) of the roughly 9,000 consumers surveyed see the metaverse as a business opportunity for creating and monetizing content. Most (89%) C-suite executives also believe the metaverse will have an important role in their organization’s future growth, according to a parallel survey of 3,200 C-suite executives. The findings estimate 4.2% of company revenues, or a total of $1 trillion, could come from metaverse experiences and commerce by the end of 2025. The findings indicate 55% of consumers want to be active users of the metaverse and nearly all of them (90%) want to do so in the next year. The top features consumers want are easy-to-use interfaces (cited by 70%) and access to a wide variety of applications (68%), which outperformed more “form” features, such as flashy headsets (55%) and the ability to personalize avatars (55%). While gaming is appealing for 59% of metaverse users, only 4% of consumers see the metaverse as just a gaming platform. In fact, 70% say they intend to use the metaverse to access products and services across media and entertainment, fitness, retail, travel and healthcare. These preferences vary by age, with younger consumers more interested in media and fitness and those older in accessing health services in new ways. Still, what all have in common is a desire to enhance the things they already do every day, such as the experience of working-out at home (cited by 60%) or improving interactions with health professionals (55%). To fully capture the opportunity, businesses should be strategic about business model changes being enabled by the metaverse while engaging with all stakeholders to inform the experiences they create:
3 Questions Retailers Must Be Asking Themselves This Holiday Season
By Rohit Shrivastava The last three holiday seasons have each been unique as the pandemic first roiled consumer behavior and then unleashed pent-up demand, all the while playing havoc with the economy. This year, with inflation rising and discretionary spending squeezed, retailers are already preparing for a slower holiday shopping season, and a new set of challenging dilemmas. For leaders in the industry, key decisions abound in what is — without question — the most important selling season of the year. Inventory planners are weighing their options. “Should we fill shelves in anticipation of holiday demand or continue liquidating and risk losing sales to stockouts?” Merchandise planners and marketing leaders are wondering, “Are the right promotions in place or are discounts too steep?” And HR leaders are asking, “What about seasonal staffing?” Retailers need data to answer these questions strategically. Beyond past transactions, external signals like inflation, labor, and market data, consumer behaviors and trends, and supply chain, weather, and currency data can give retailers an edge in both preparing for known challenges and addressing unexpected ones as they arise. In this environment, a data-driven approach to merchandise planning, active demand management, and sales and marketing execution is more critical than ever. So which questions are most important? And how can retailers leverage data to find the right answers? Here are three questions retailers should be asking and addressing right now to gain a holistic, real-time view of the levers that can be pulled to optimize demand while protecting margins and unlocking cost savings this holiday season. 1. What can be done to shape demand now? Amazon.com surprised shoppers in October with a second Prime Day — a strategy intended to boost controlled demand, prepare their warehouses, and move excess inventory ahead of Black Friday. Riding the consumer interest, major retailers including Best Buy and Target quickly mounted competing sales. With the industry closely watching the impact of these initiatives on year-end sales, retailers considering deploying similar demand-shaping strategies should take care to rely on point-of-sale data, social media trends, and other market signals to get a clearer picture of where and how to link pricing and promotions to shape the most beneficial activities this season. 2. What product mix, at what price, will drive the most revenue? There’s a give-and-take in promotions that analytics can help you fine-tune. By accounting for things like shipping costs, demand projections, and the price of production, retailers can make smarter decisions about the products they’re pushing in each location during key moments this holiday season. For example, which SKUs are your biggest sales drivers? Is there an opportunity to swap products with high production costs with cheaper options? Do bundles or promotions offer opportunities for revenue? Which SKUs are unique and therefore allow for price increases? That kind of insight can give you confidence as you experiment with pricing and assortment planning, something Bath & Body Works is doing as it adjusts its bundled soap promotions this year to protect margins in an inflationary climate. 3. Are the right resources in the right locations to make it all work? Overstaffing can carry massive costs, yet underestimating holiday staffing needs could mean failing to fulfill orders, disappointing customers, and losing out on revenue opportunities. Lockstep collaboration between HR, finance and supply chain teams can ensure the right resources are in place to deliver value to customers while also protecting profit margins. Are there certain hires that need to be expedited, made in specific locations to meet strong floor traffic, or at specific times in order to get products to customers quicker from warehouses? A data-driven approach to seasonal staffing can help ensure resources meet business demand, and that labor costs aren’t carried unnecessarily into the new year. While retailers likely planned for a complex fourth quarter, this year’s holiday challenges are sure to be formidable. Retailers need to leverage data in their decision making so they can pivot quickly and strategically when change occurs. Asking the right questions now, and then leveraging those questions to inform nuanced scenarios and plans, can put retailers in position to succeed in the weeks — and months — ahead.
Winners and losers of Black Friday 2022
By Dani James As COVID-19 pandemic restrictions cooled off in 2022, many retailers may have hoped for a less complicated Black Friday this year. But brewing up a new battle for both brands and consumers, inflation took the stage months before the shopping event began. Heading into the holiday, some estimates showed that while in-store shopping could make a return, inflation (which was up 7.7% in October according to the Consumer Price Index) could thwart consumer spending, as shoppers expected to get less for more money. Predictions showed higher-income shoppers tightening their budgets, and discretionary spending at some big retailers decreased throughout the year as consumers dealt with rising grocery bills. Several retailers lowered their outlook for this quarter before the shopping event even started. Target tightened its Q4 outlook in November after earnings came in below expectations, and e-commerce native ThredUp did the same despite its focus being on secondhand goods — a category that could normally do well for consumers looking to save. All of this laid the groundwork for a not-so-joyous holiday season for shoppers. That said, Adobe Analytics data shows that online spending on Black Friday this year reached $9.12 billion, up 2.3% year over year. The picture of how the retail industry performed is more complex than a single number. Given the macroeconomic pressures consumers face right now, it is hard to say that any winners in retail will remain so for the rest of the season. But some trends stood out. Here’s how retailers actually fared during the industry’s most highly-anticipated holiday. Winner: Buy now, pay later … sort of Thanksgiving and Black Friday may have been great days to be a buy now, pay later service provider. Given the economic pressures many shoppers face right now, BNPL payment options offered a way for consumers to still get the goods they wanted. Black Friday predictions from Deloitte projected increased use of these services, with 48% of survey respondents saying they planned to use credit cards and 37% expecting to use BNPL. On Thanksgiving Day, online BNPL revenue increased by 1.3% year over year and orders were up 0.7%, according to Adobe data. More telling is that some shoppers are using BNPL for lower-priced goods instead of high-ticket items, with the average order value for BNPL purchases decreasing in the U.S. by 6% on Thanksgiving, according to data from Salesforce. Orders using BNPL rose by 78% the week of Nov. 19 to Nov. 25 when compared to the week before, according to Adobe. Additionally, overall revenue from BNPL is up 81% during the same period. “It’s a positive sign in the immediate term, that consumers are looking to extend their wallet further and do more,” Rod Sides, global leader at Deloitte Insights, told Retail Dive. But that immediate-term positive is a red flag in the long term, according to Sides, who added “we now have much higher interest rates, and they’re gonna start to hit any credit card balances. With buy now, pay later, it tells you the consumer is challenged … in the long term, it’s a warning sign.” Loser: Long lines The days of long lines and fights over highly sought-after products may really be dead. While in-store shopping was more in focus this year due to loosening COVID-19 restrictions, that doesn’t mean there was a return to the old chaos of Black Friday shopping. Several analysts noted that traffic was brisk and certainly apparent at a variety of stores, but didn’t have the long wait lines the holiday used to be infamous for. “People have been shopping today. We’d expected brisk traffic and big sales numbers. We got the brisk traffic, and we’ll soon know if that translated into positive numbers for the retailers,” Katherine Black, partner in the consumer practice of Kearney, said in emailed comments Friday evening. “In Raleigh, [North Carolina] we visited a wide range of stores (Target, Best Buy, Macy’s, Bass Pro Shop) and while all of them had shopper traffic, none of them had early morning lines, or completely full parking lots or long lines.” The avoidance of such lines this Black Friday could have contributed to the use of BOPIS, according to Salesforce, which said the service option was trending 20% higher on Black Friday compared to all other days this season. With e-commerce still strong this year, Sides thinks it can still go head-to-head with in-store shopping as consumers’ preferences settle in after the highs of the pandemic.