Unwrapping the 2023 Holiday Shopping Trends

We have been closely monitoring consumer behavior and shopping patterns to uncover the latest trends that will shape the 2023 holiday shopping season. As it is often the kick-start for many online shoppers, we have some key takeaways from the first Amazon Prime Day in 2023, as well as other predicted trends for the upcoming holiday shopping season.  These insights can provide a valuable snapshot of what businesses can expect during this crucial time of the year for many brands.

Insights from Amazon Prime Day 2023

Here are some insights we learned from the July Amazon Prime Day.

• Increased Spending: Prime Day shoppers demonstrated a strong willingness to spend more this year than in previous Prime Day events. One in four US adults participated in Prime Day, with 42% of them reporting higher spending than the previous year. While many shoppers made smaller purchases, 36% spent over $100 during the event. This may bode well for businesses, as holiday shopping ramps up.
• Diversified Shopping Preferences: Prime Day shoppers are not exclusive to Amazon, as they also engaged in sales from other marketplaces like Walmart, Best Buy, and Target. Additionally, they displayed preferences for tech products, such as smart watches and smart home devices, indicating a tech-savvy consumer segment. Tech may well be a popular gift category for another year.
• Brand-Centric and Tech-Loving: Interestingly, Prime Day shoppers are not as discerning as the general population when it comes to social consciousness or brand reviews. However, they are highly brand-centric consumers, often seeking specific brands and products even during sales events. Moreover, they have a strong affinity for consumer tech and are active users of social media platforms like Snapchat, Twitter, and Pinterest.  Brands wishing to build awareness should be using these key channels to communicate.
• Demographic Diversity: Prime Day shoppers are evenly spread across different age groups and income levels. Younger shoppers (ages 25 to 34) showed the most significant increase in participation, highlighting the event’s broad appeal.  Clearly this target group with be a key factor in successful holiday sales, as well.

Predicted Trends for the 2023 Holiday Shopping Season:

According to eMarketer, this year’s holiday season will look a lot like it did last year.

• Ecommerce Growth Continues: The gap between global ecommerce sales and retail sales growth is expected to narrow. Ecommerce sales will slightly outpace brick-and-mortar during the holiday season, prompting online retailers to initiate promotions in October, elongating the shopping season.   Brands should ensure that their ecommerce platforms are appealing, user-friendly and efficient to meet consumer demands.
• Discount-Driven Ecommerce: Online retailers will focus on heavy discounting strategies to attract customers. Last year’s record-high online discounts, especially on toys, electronics, and computers, will likely continue this year.  A well-designed price strategy for the 2023 holiday season will be more important than ever.
• Brick-and-Mortar Normalization: After a surge in 2021, physical retail sales will return to pre-pandemic growth rates. However, pandemic retail work-arounds have become permanent shopper expectations. Brands should consider enhancing in-store experiences with flexible payment and pickup options to attract more customers. 
• The Rise of Livestream Commerce: Livestream commerce, already popular in China, is gaining traction in the US (and is deemed the “hottest trend in retail” by the Wharton School of Business). Millennials in particular are engaging with influencers on platforms such as TikTok and InstaGram to purchase items live during a broadcast and enjoy more of a communal shopping experience.  Brands should leverage livestreaming features to engage customers and drive sales during the holiday season.
• Personalization and Value Emphasis: In a tough economic climate, brands must differentiate themselves by offering the best deals or catering to customers’ specific preferences. Early promotional calendars can entice customers, while value can be delivered through free shipping and returns, product bundles, or frictionless checkout experiences.  With the number of purchasing options available to consumers today, shoppers can easily walk away from a brand or retailer if the shopping experience is frustrating or cumbersome, or the value proposition is missing.

Online retailers will likely kick off their promotions in October, creating an elongated holiday shopping season where consumers wait for the best discounts. Businesses must stay informed about the latest trends and consumer preferences to make strategic decisions. Insights from Amazon Prime Day 2023 reveal an enthusiastic group of shoppers willing to spend more and who display diverse shopping preferences. Predicted holiday trends emphasize the importance of ecommerce growth, personalized messaging, and seamless customer experiences. By understanding and adapting to these trends, businesses can position themselves for success to thrive in the dynamic and competitive holiday shopping landscape.