Retailers to invest in AI, social media ads to reach Gen Z holiday shoppers
Gen Z shoppers are set to spend this holiday season, and retailers are taking steps to attract them.
A new survey from Fiverr of more than 2,500 consumers and more than 2,500 small-to-medium business leaders in the United States, U.K., France, Germany and Australia found that retailers are taking a strategic approach this holiday season to reach new consumers.
More than four-in-10 (43%) of Gen Z consumers are planning to spend more this holiday season than last year, compared to the 37% of millennials that plan to do the same. Social media is the go-to place for holiday gifts for younger consumers, with 34% of Gen Zers using the TikTok Shop and 25% getting gift ideas through social media influencers’ recommendations.
In the U.S., the TikTok shop continues its dominance, as more than half (54%) of Gen-Zers find their gifts on this platform alone. Surveyed U.S. Gen-Zers also cite social media as a major influence in their holiday shopping. A third of respondents plan to find gifts via Facebook and Instagram ads, and nearly a quarter (24%) through influencer recommendations.
[READ MORE: How will consumers approach the 2024 holiday season?]
To reach Gen Z shoppers, Fiverr says that retailers plan to invest in AI (70%), social media ads (39%), influencer marketing campaigns (35%), email marketing (33%) and SEO (29%). More than four-in-10 (41%) retailers surveyed plan to invest in AI tools to expedite work, and 35% reported wanting to embed AI throughout the entire customer journey with chatbots, customer personalization, or customized marketing campaigns.
AI is already becoming second nature for Gen Z, with more than 54% of Gen-Zers using it to assist in their holiday shopping. Top uses include finding the best prices (17%), finding new gift ideas (22%), and even creating holiday presents themselves (18%).
More than half (53%) of surveyed businesses say they are confident, and not considering competition from larger e-commerce brands as a challenge this year. Compared to last year (55%), over 80% of businesses are now offering discounts on their products to satisfy the deal-hunters.
"The holidays are often make-or-break for many small businesses, so it is critical to plan ahead, know where to place your focus and ensure that your audience is getting the right message,” said Gali Arnon, chief business officer at Fiverr. “This data shows that retail and e-commerce businesses are doubling down on social media campaigns to reach new markets and embracing AI to streamline their daily operations as more and more consumers are looking to buy the perfect gift as far ahead of the holiday season as possible.”
Fiverr’s survey found that inflation has become the predominant concern for businesses, with 48% of global respondents citing it as their primary challenge. A third of retailers surveyed cite staffing shortages ahead of the holiday season, and a third of retail and e-commerce businesses are now hiring freelancers to support their operations.
“With inflation, competition, and staffing shortages intensifying both online and in stores, the insights from our latest research underscore the type of expertise businesses need to stay ahead,” added Arnon. “Demand is up for experts with AI skills, digital marketing and social media to maintain loyal customers and reach new audiences near and far.”
