BITES // 12.01.22 // THE GIFT OF GIVING IS CHANGING
Every month we collect six of the best pieces of content published on the web and share them with you because we believe that the most extraordinary thinking is inspired by looking to unexpected places. BITES is a reading list for those who want to bring a little of the outside, in.
OVERVIEW -
For the first holiday season since the pandemic started, US consumers are feeling optimistic. But people are still adjusting to economic changes and inflationary pressures, and that mindset is bleeding into the holiday season. According to Adobe Analytics, online sales are expected to increase just 2.5 percent, to $209.7 billion, this year. That’s a drastic difference from the 33 percent growth in 2020 and the 8.6 percent growth in 2021. The gift-giving season has always advertised lower prices and can’t-miss deals. Retailers are anticipating more discounts than usual this year across multiple industries. More conscious spending might have businesses reconsidering strategies, restructuring sales, and even considering layoffs in 2023.
1. TIKTOK IS GIFTING LIVE THIS SEASON
TikTok is expanding their live shopping business. Live shopping combines TikTok live streams with e-commerce to allow viewers to buy products without leaving the app. This experience is like QVC for the social media age. Live shopping is transforming e-commerce in Asian markets but is struggling to take off in the West. TikTok Shop has started to roll out with the help of TalkShopLive. The hope is to make a big splash out of the gate with the holidays just around the corner. TikTok Shop was launched in the UK but didn’t fare as well as they had hoped, leading them to postpone a planned launch elsewhere in Europe. This feature is similar to TikTok’s sister app, Douyin, which is already available in China, Thailand, Malaysia, Vietnam, Singapore, the Philippines, and Indonesia. Douyin has reportedly hosted 9 million live e-commerce broadcasts per month and sold over 10 billion products from May 2021 to May 2022.
2. GOOGLE IS GETTING INTO THE DELIVERY GAME
This holiday season, forget about using USPS or FedEx. Gmail wants to deliver straight to your doorstep. Third-party tracker apps like Route and OneTracker aren’t too happy that the world’s largest email platform is rolling out a competing service. Google is updating Gmail to include a dynamic shipping status on top of a customer’s emailed product receipt as long as the tracking number is supported by the platform and you opt-in for the service. If a package is delayed, Gmail will surface the receipt email with the shipping update to the top of your inbox. The feature is set to send out to US users in a few weeks. Gmail users won’t need to dig through their inboxes to check the delivery status of their holiday packages. Users can opt in to the service, which will monitor your emails for tracking numbers and alert you when the package status changes.
3. SECONDHAND SHOPPING AND THRIFTING
Thrifting has become popular with economic pressures, a push for sustainability, and its popularity on TikTok. The secondhand market is estimated to hit $289 billion by 2027. And, with 272 million Americans now buying or selling pre-owned products, brands are incorporating second hand shopping into their business plans to help drive more revenue. A recent report from OfferUp found that the re-commerce market grew by 15% last year. Consumers are spending an average of 27 minutes every day on second hand marketplaces, that is almost as much time as they spend on social media. Meanwhile, 21% shop secondhand to lower their carbon footprint. Gen Zers and Millennials especially are not only buying secondhand but selling secondhand clothes as a form of income. All of this shows that second hand shopping isn’t heading to the clearance rack anytime soon.
4. SMARTPHONE ADDICTIONS ARE CAUSING ADDICTIVE SHOPPING
Gen Z’s love of smartphones and e-commerce is turning some vulnerable customers into shopping addicts. Compulsive buying is bad for shoppers and bad for companies. Gen Z phone addiction is real, with 31% reporting they feel uncomfortable without their phones for more than 30 minutes. That addiction, combined with the ease of e-commerce, has led to a rise in shopping compulsion. Smartphone addiction is linked to mood management and can put someone in a “flow state” leading to the endless scroll. This can lead someone to buy things they don’t need simply because of how easy and private it is. For a generation that has faced several economic challenges, compulsive buying only hurts them more and can cause a feeling of guilt. Nisreen Ameen, a senior lecturer in digital marketing at Royal Holloway University of London, believes that businesses have a responsibility to deter compulsive buying. Businesses can create algorithms that pinpoint addictive buyers and remove them from marketing materials. Maybe even going as far as setting spending limits for a certain time frame. By reining in addictive behavior among teen consumers, businesses could gain support from customers that “increasingly value corporate social responsibility.”
5. BUY NOW, PAY LATER
Buy now, pay later (BNPL) rose to success during the pandemic as consumers with tighter wallets looked for alternative funding methods. They flocked to major installment loan providers Klarna, Afterpay, and Affirm. This growth has led to more entrants to the BNPL industry, including established players such as Block, PayPal, and Apple. As shoppers stretch their holiday budget, the firm Bluedot held a survey of 1,000 consumers and found that 40% of respondents said they plan to pay for their holiday purchases with buy now, pay later services. Close to half (48%) of Gen Z respondents said they planned to use BNPL services this holiday season, followed by millennials (47%), Gen X (40%) and baby boomers (14%). The share of BNPL transactions in e-commerce revenue rose by 5% between January and September compared to last year. Gen Zers are flocking to BNPL to avoid paying credit card interest, to make payments that otherwise wouldn’t fit in their budgets, to borrow money without a credit check, and because they don’t like using credit cards. Retailers are expected to clamor for high-quality BNPL solutions to help forestall consumer spending declines, thereby driving customer acquisitions.
6. GOOGLE WANTS TO HELPS YOU FIND THE BEST DEAL
Google announced a new feature rollout that will help you find the best price or discounts on items without ever having to leave its Search landing page. The feature aggregates promos, coupons, and other discounts across the internet when looking at products. It will allow users to compare prices across multiple outlets while providing insights on whether it is a good deal. Although Google already shows when items are on sale or if the price for a specific product has dropped, the goal of the new feature is to show users specific promotions and allow them to compare them to others right in Search. There will also be a new coupon clipping feature that will let users copy promo codes when they’re ready to make a purchase. The new feature will also allow users to compare deals side by side. The launch of the new features comes as Google says 43% of Americans this holiday shopping season are planning to look for deals and sales more than last year.
TAKEAWAY-
We will see more shoppers have their eyes peeled for discounted items this holiday season compared with the past two years. Shoppers are reluctant to spend as costs increase for food, housing, health care, and other items due to inflation at a record 40-year high. With stretched budgets, the return of steep discounting, it will be a tough pill to swallow for companies and business revenues. There is immense pressure on retailers’ profit margins, as they juggle higher costs with trying to sell an abundance of merchandise. While gift-giving isn’t going away, and shoppers are still eager to buy gifts for their loved ones, their mindset when it comes to spending is becoming more frugal and intentional.
