New Engen Holiday 2023 Guide Part 1: H2 Economic Snapshot
August 24th, 2023
U.S. Inflation
→ In July 2023, inflation increased to 3.2% from 3.0% in June. This is the first increase after 12 consecutive months of decline, yet notably less than 1 year ago [8.5% in July 2022].
Student Loans
→ Federal student loan interest resumes on Sep 1st after 0% during loan forbearance. Payments start back up in October, ending a 3-year hold due to the pandemic. As student debt relief ends and the holiday season begins, consumers will adjust budgets and selectively cut back on spending.
Consumer Spending
→ According to Morning Consult, consumer spending dropped by 1.2% [MoM] in July after 7.1% growth in June and 6.1% growth in May. Middle- and high-income earners led this shift in spending.
Consumer Holiday Shopping Interests
PRICE: Consumer behavior in H2 will fluctuate based on economic shifts, consumer priorities and brand messaging. To tackle consumer hesitations (i.e., waiting for "a better deal"), consider holiday price adjustments and clear benefit messaging.
MESSAGING: In 2022, consumers felt the financial squeeze and cut back on gifts and celebrations. 19% of holiday shoppers in Morning Consult's study shared that they went over their holiday season budget. These consumers are aiming to avoid a double hitter in 2023. This year, meet consumers where they are and explain in creative messaging how certain product discounts and bundles are budget-friendly. Explore how mixing and matching can meet gifting goals.
EARLY BIRD: Since 2021, holiday shopping has started earlier than usual. According to Optimove's 2023 Holiday Shopping Survey, half of consumers (50%) anticipate holiday shopping before November this year. Reward the early birds with exclusive products and experiences while also keeping traditional shoppers in mind with benefits like price adjustments (price match) and Cyber Week discounts.
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