- Average spend per shopper poised to plummet from $441 in 2022 to $339 in 2023 – £89bn as a nation – reflecting the economic challenges faced by households and retailers as discounts lose their effectiveness
- Significant surge in the number of Americans turning to Black Friday to save the festive season – with the number of people purchasing most of their Christmas gifts on this day predicted to almost skyrocket to 98 million
- This boom in browsing offers retailers a chance to establish enduring relationships with new customers beyond price, as shoppers express intent to remain loyal to brands they buy from on Black Friday after the sales period
- New research from the SAP Emarsys Customer Loyalty Index 2023 reveals how US consumers are adapting their shopping habits during challenging times, helping retailers to boost results this Black Friday and beyond
Indianapolis, Nov. 20, 2023 – New research from SAP Emarsys reveals that, despite retailers launching their Black Friday campaigns earlier than ever this year, American consumers are bracing for a notable shift in spending habits.
The SAP Emarsys Customer Loyalty Index 2023, which conducted research on over 4,000 US consumers, found that the anticipated average spend per shopper on November 24 is poised to plummet by 23%, dropping from $441 in 2022 to $339 this year, reflecting the economic challenges faced by households across the country.
This reduction in spending, however, is accompanied by significant surge in the number of Americans planning to make Black Friday their primary shopping occasion for holiday gifts. During challenging times with inflationary pressures weighing heavily on budgets, During challenging times with inflationary pressures weighing heavily on budgets, nearly 2 in 5 Americans (37%) are looking to buy the majority of their holiday gifts on Black Friday. In 2022, just 1 in 5 (21%) did the same – so there has been a huge 176% increase in the number of Americans looking to Black Friday as a beacon of hope, highlighting the evolving significance of the day as it transforms from a mere shopping event to a vital means of saving the festive season for many.
SAP Emarsys highlights that Black Friday will be more important than ever for US retailers and brands. Yet, with “Incentivized Loyalty” – loyalty achieved through discounts and deals plummeting from 76% to 49%, the company also warns that reduced prices won’t be enough to secure sales and long-term loyalty. But of those who already consider themselves loyal to certain brands, half (54%) who shop with a brand during Black Friday are likely to stay loyal, what should retailers do to avoid further discounting and keep those customers coming back once the sales are over?
As Kelsey Jones, Global Head of Product Marketing at SAP Emarsys explains, “In our annual Customer Loyalty Index, we found that ‘Incentivized Loyalty’ is in decline. Short-term sales may be a good way to secure new customers, but if retailers want to maintain those customers, they need to go further than just slashing prices.
“This Black Friday, retailers need to embrace a value exchange. If discounts are offered at all, this sales period should be a jumping off point to reward shoppers for sharing their data with elevated customer experiences, such as VIP access to new products, offering consumers the opportunity to better connect with their brands in the future. One of the best ways to do this is through omnichannel personalization, ensuring that offers are communicated in a meaningful way and on the channels customers prefer – fostering true loyalty at every touchpoint.
“AI technologies also play a key role, allowing retailers to anticipate consumer preferences and deliver the best possible offer at the perfect moment. Using this technology, retailers can give customers a shopping experience suited to their needs, while securing their loyalty long term — boosting sales and building trust.”
Roy Robinson, Chief Product Officer at SAP Emarsys partner Mention Me, the world’s first Customer Advocacy Intelligence Platform, emphasizes the importance of leaning into customer advocacy to attract customers that are likely to stick around.
“A lot of brands lose momentum after the festive season – they use discounts in their favor to bring in new customers, but these shoppers aren’t guaranteed to return to make another purchase.
“This can become a vicious circle for brands as they continue running discounts – despite the costs involved – to win them back time and time again. Instead, brands should look to deliver highly personalized data driven experiences which encourage customers to become active brand advocates, bringing their friends and family to buy with you as well. These new customers are predisposed to love your brand, spend more and be more loyal helping you break this cycle of discounting.”
To find out more about what consumers say will earn their continued loyalty to brands, read the SAP Emarsys Customer Loyalty Index 2023 here.