Digiday+ Research: Brands tweak channels, pricing strategies ahead of 2024 holiday shopping season

Here’s what we found:

Brands are optimistic about 2024 holiday season revenue

During the 2023 and 2022 holiday seasons, marketers cautiously planned for seasonal revenue growth of 10% or less, according to Digiday’s previous holiday surveys. This year, however, brands and retailers are expressing more optimism about 2024 seasonal spending. More than one-third of survey respondents (35%) said that they expect their 2024 holiday revenue to increase 11% to 30% in comparison to their actual 2023 holiday revenue.

Brands’ and marketers’ healthy revenue growth expectations may be warranted. A recent report from global consulting firm Boston Consulting Group found that more than one-quarter of consumers (28%) plan to spend more this holiday season than they did last year. A slightly smaller percentage (27%) plan to spend less this year, and just under one-half of consumers (45%) plan to spend the same amount in 2024 as they did in 2023.

To make their 2024 holiday budgets stretch further, consumers will likely be searching for the best seasonal shopping deals. But brands and retailers may not fulfill their customers’ desires for deep discounts this year. In Digiday’s survey, the majority of respondents (71%) said they will offer similar discounts in 2024 to the discounts they offered in 2023. Nearly one-quarter of retailer, brand and agency pros (22%) said they offered deeper discounts in 2023 than they will offer this year. And, only 7% of respondents said that they will offer steeper discounts in 2024 compared to last year.

According to Alvaro De La Rocha, CMO at digital menswear and lifestyle company Bespoke Post, it’s still important for brands to offer deals to consumers who are shopping through digital channels. “Last year, Google shared data with us that [showed] the year-over-year increase in people searching for deal-related terms like ‘holiday deal/discount/sale’ was higher compared to gifting-related terms,” De La Rocha said.

However, De La Rocha also talked about over-using sales. “Massive deals on great products is definitely core to our strategy,” he said. “But, we are mindful of not overdoing it because you don’t want to be purely trying to convince people to come to you on price always.”

When it comes to social media, more than two-thirds of shoppers (68%) said that they think dynamic pricing, which includes tactics such as limited-time offers and flash sales, is “at least somewhat” influential in the holiday shopping experience, according to a consumer study from Bazaarvoice. Flash sales, in particular, encourage consumers to move quickly when making a purchase in order to take advantage of time-sensitive marketer discounts and promotions. This approach can be particularly useful for targeting consumers who have abandoned their carts, or are close to making a purchase, in order to push them over the final hurdle to conversion.

Leaning into online and limited-time sales discount strategies will help brands keep discount percentages the same this year compared to last, year over year while simultaneously optimizing their discount offerings.

Marketers focus on e-commerce and social commerce over physical retail

In line with previous years, Digiday’s survey this year found that owned e-commerce and social commerce platforms are the most-used sales channels during the holiday season. Seventy-eight percent of brand, retailer and agency pros said they plan to use their own e-commerce sites as part of their 2024 strategies, and 70% said the same of social commerce channels.

Tanger, for example — traditionally a retailer very heavily based in physical stores — has pivoted its holiday marketing approach to include more digital sales channels. “Over the last four years, we’ve digitally transformed our company,” said Stephen Yalof, Tanger’s president and CEO. “We know our customers are going to come out early. We know our customers are committed to spending, and so we’re using a lot of those digital strategies, whether it’s Facebook or TikTok or other digital methods, to get in front of our core consumer, as well as our young consumer.”

This aligns with sales analysts’ predictions that opportunity for growth lies outside of physical retail during the upcoming holiday season. Bain & Company has forecast that U.S. retail sales will grow 3% during the 2024 holiday season, with 0.5% of that coming from in-store sales growth and 9.5% to non-store (or e-commerce) growth. Likewise, in Digiday’s survey, 71% of respondents agreed that their own e-commerce sites grow more important to their businesses during the holiday season compared with other sales channels.

Meanwhile, a much lower 44% of respondents to Digiday’s survey said their own physical retail channels grow more important to their sales during the holiday season. Additionally, 13% said that physical retail actually grows less important during the holidays.

Digiday’s survey found that social commerce grows even more in importance than owned e-commerce channels for holiday shopping. Seventy-six percent of brand, retailer and agency pros said this year that social commerce grows more important to their sales during the holiday season.

“Over the last several years, the e-commerce part of our offering has been what’s growing fastest,” Bespoke Post’s De La Rocha said, as he described the role of social media during the holiday season. “There’s a mix of demand generation and demand capture [on social channels]. On Facebook, a lot of what we’ve seen traditionally is demand generation, like through Advantage+ shopping campaigns. With Google, a lot of it has been demand capture. People are already searching for a specific item and, as a cross-category e-commerce retailer in all major categories, we often have things to satisfy many types of searches.”

For Tanger, taking an increasingly digital approach to sales has helped the retailer not only boost customer demand, but also better connect with customers, according to Yalof. “As we transform our business digitally, we’re starting to communicate far more frequently and learn a lot more about our customers,” Yalof said.