A new report shows 37% of shoppers’ No. 1 influence when holiday shopping is promotions over brand reputation at 25%.
For consumers, the deal is becoming more important than the brand, but that doesn’t mean retailers should discount everything. Holiday spending is expected to reach $1 trillion this year, but shoppers aren’t necessarily buying more, they’re spending smarter. 79% of consumers say discounts will influence when and where they shop this holiday season, and eight in 10 plan to use a budgeting strategy.
Shoppers looking for value
Blaine Nielsen, President of Retailers at Rithum, said shoppers are heading into the holidays looking for value and are increasingly willing to shop around to find it.
“That puts pressure on retailers to be competitive on price, but they also need to think beyond the discount. They need to consider how promotions show up across marketplaces, their websites and other channels. If shoppers see better promotions for the same product on a marketplace than on a brand or retailer’s website, that can influence where the shopper buys,” he said.
“Retailers need a consistent view of pricing, promotions and demand across channels so they can meet shoppers’ expectations without discounting products that would have sold anyway. The goal this holiday season is to offer the right deal, in the right channel, at the right time, and not just the most deals.”
Understanding what influences purchases
Retailers need to understand what is influencing purchases. They need to know what is selling, but also why it is, where and how quickly, said Nielsen.
“That starts with having accurate product, inventory and purchase data across each of their channels. If a product is getting a lot of attention but shoppers consistently abandon it before checking out, a promotion could get them across the finish line. But if a product is already selling quickly and inventory is limited, discounting it is giving up margin on purchases that already would have happened,” he said.
“Retailers should also look at how those patterns change across channels, because a product might need a promotion on one marketplace might not need it somewhere else. The more accurate and connected that data is, the better retailers can use discounts to sway shopper behavior instead of just lowering prices in the hopes that they do.”
What signals to look out for
Retailers should look at signals like search activity, product views, cart abandonment, conversion rates, inventory levels together and what channels these signals are coming from, added Nielsen.
“A product might suddenly gain traction on TikTok, start appearing in AI-driven recommendations or see increased demand on a marketplace before that behavior reaches a retailer’s own website. Those shifts can help retailers determine not only when a promotion could influence a purchase, but where it will have the most impact,” he noted.
“As shoppers increasingly move between social platforms, AI tools, marketplaces and retailer websites, retailers need a connected view of demand across channels so they can respond to changes quickly without automatically discounting everywhere.”
Looking for a deal
Nielsen said the best deal is about more than the number on the price tag.
“Shoppers are weighing the entire purchase experience, from whether the exact product they want is in stock to how quickly they can get it and how easy it will be to return if it doesn’t work out. Assortment matters too,” he said.
“Having more sizes, colors or comparable products available can keep a shopper from going somewhere else, even if another retailer is offering a deeper discount. This becomes especially important later in the holiday season, when delivery dates and inventory availability can carry as much weight as price. A 20% discount loses some of its value if the product won’t arrive in time. Convenience and certainty are a part of the value retailers are offering that can create a better deal over the lowest price out there.”
Emphasis on value and discounts
Shoppers are comparing retailers based on the overall deal more and more and AI is making it even easier to weigh price, availability, shipping and other factors before deciding where to buy, explained Nielsen.
“That means loyalty will increasingly depend on the value of the entire experience rather than the brand name alone. That doesn’t mean retailers will need to keep prices permanently low, but it means they’ll need to get better at knowing when they can and can’t win the purchase without a discount,” he said.
“Sometimes a promotion will be enough, but in other situations having a product in stock, offering faster delivery and making the returns process easier could close a sale. Over time, I think we’ll see retailers become more targeted with promotions rather than relying on blanket discounts to drive demand. The retailers that can deliver value without training shoppers to always wait for a sale will be in a much better position to build loyalty beyond the holiday season.”
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