Retailers Increase Focus on AI, Social Media, and Discounts As Gen Z Plans to Spend Big This Holiday Season.

Fiverr has released new research that shows retailers are intensifying their focus on AI, social media, and discounts as they prepare for the 2024 holiday season. The survey, conducted in partnership with Censuswide, surveyed more than 2,500 consumers and more than 2,500 small to medium business (SMB) leaders around the world. The findings highlight strategies marketers are using to attract Gen Z shoppers while navigating economic challenges such as inflation.

Gali Arnon, Chief Business Officer at Fiverr, emphasized the importance of planning ahead: “Holidays are often a break for many small businesses, so it’s important to plan ahead, know where to focus, and make sure the audience gets the right message.” He noted that businesses are increasingly turning to social media campaigns and AI tools to meet the growing needs of consumers.

Key Findings

Retailers’ Digital Investments and Inflation Concerns

• Integration of AI: 70% of marketers surveyed are investing in AI to improve operations.
• Social Media Ads: 39% improve their social media presence through paid advertising.
• Influencer Marketing: 35% turn to promotional campaigns to reach younger audiences.
• Email Marketing: 33% focus on personalized email marketing strategies.
• SEO: 29% improve their product pages and SEO capabilities.

Inflation has emerged as the biggest concern for retailers, with 48% citing it as their biggest challenge. However, 53% of small businesses do not see the competition of large e-commerce brands such as Amazon as a major threat this year.

Freelance Employment Amid Labor Shortages A third of retailers report staffing shortages ahead of the holiday season. At the same time, one-third of retail and e-commerce businesses hire freelancers to support their operations and maintain business continuity.

Consumer Trends Shaping the Holiday Season

Spending has increased from Gen Z

• Gen Z Consumers: 43% of Gen Z respondents plan to spend more this holiday season, surpassing millennials, 37% of whom plan to increase spending.
• Discounts: More than 80% of businesses offer discounts to attract bargain-seeking shoppers, up from 55% last year.
• Shopping Preferences: 42% of consumers prioritize finding good deals, 32% value free shipping, and 30% focus on product quality.

Early shopping is becoming an important trend, with 52% of consumers starting their gift shopping in October and November. Conversely, 18% cash in on summer sales for holiday gifts.

Social Media and Gen Z’s Holiday Shopping Habits Social media, especially TikTok, plays an important role in Gen Z’s holiday shopping. Among US Gen Z consumers:

• TikTok Dominance: 54% use TikTok Shop to get gifts.
• The Impact of Communications: 34% of Gen Z consumers worldwide use TikTok Shop, 25% rely on social media influencers for recommendations, and 14% turn to AI generators for gift ideas.

Marketers are responding to this by increasing their presence on social media such as Facebook and Instagram, where a third of US Gen Z respondents plan to receive gifts through advertisements, and 24% will look to influencers for recommendations.

Efforts to integrate AI for retailers and customization

As online shopping becomes more common, around 68% of retailers surveyed are using AI in their operations, aiming to improve efficiency and provide a more personalized customer experience. Specifically:

• AI tools: 41% of marketers plan to invest in AI tools to speed up the process, while 35% want to incorporate AI into the entire customer journey using chatbots, personalized marketing, and customer engagement tools.
• Use of AI for Gen Z: More than 54% of Gen Z shoppers are using AI to help with their holiday shopping, including finding the best prices, generating new gift ideas, and even creating holiday gifts.

The global survey conducted by Censuswide included 2,539 consumers and 2,508 business leaders in the USA, UK, Germany, France, and Australia. Data collection took place from July 26, 2024, to August 5, 2024. Censuswide complies with the Market Research Society (MRS) code of conduct and ESOMAR principles.

Photo: Envato