Let’s Talk Business for January 19, 2024

It’s been a holiday season full of surprises for retailers. Consumers not only surprised retailers with the strength of their spending, but they showed greater-than-expected willingness to use mobile apps, social media links, AI-powered product recommendations, and pay-over-time options to drive their spending. The shifts in consumer behavior over the holiday season will influence how retailers operate in 2024.

Consumers surprised economists and retail forecasters with how much they spent, despite ongoing concerns about inflation. The 2024 Consumer Trends Report found that while consumers still view inflation as the most important problem in the country, economic concerns have not led to decreased spending.

Over the five-day Black Friday to Cyber Monday weekend, more than half of online purchases were made on a mobile phone, the first time that phones have overtaken desktops and laptops for e-commerce, according to Adobe Analytics. As a result, retailers are upgrading their mobile shopping experiences to easily capture those on-the-go and on-their-phones shoppers, with an even greater shift to mobile expected in 2024.

The growing consumer comfort with making purchases on phones helped boost the impact of ads and influencers on social media during the holiday season. This holiday season saw a surge in purchases made directly through social media sites. Social media now isn’t just a place to find products, retail tech company Shopify reported. Increasingly, Shopify said, “it’s a place to buy them.”

Retailers discovered during the holiday season that AI-generated product recommendations as well as AI-powered chatbots and virtual shopping assistants can be powerful tools to boost sales. They also learned that consumers like getting AI assistance with their shopping. Heading into the holidays, the Shopify/Gallup survey found that 74% of consumers believed that AI helps in finding deals and offers, 69% believed it makes it easier to discover new brands and products, and 67% said it makes it easier to get recommendations based on previous purchases.

This holiday season also saw a dramatic increase in the use of buy now, pay later (BNPL) payment options, which typically allow consumers to divide online payments into four or more installments. Adobe Analytics reported that BNPL usage hit an all-time high on Cyber Monday, contributing to $940 million in online spending. BNPL spending on Cyber Monday was up 42.5% over a year earlier, an increase Adobe described as “staggering.” For the month of November, BNPL was used for over $8.3 billion in spending. With more consumers using BNPL plans, retailers are increasingly adding the option in stores as well as online. One BNPL provider, Affirm, announced that it was expanding its pay-later options to the self-checkout lanes at Walmart so that store shoppers could opt to be billed in installments.

The Emporia Area Chamber of Commerce offers many resources to help you start, run, and grow your business–including our annual Leadership Emporia Academy, monthly Group Lunches, Ribbon Cuttings, Business After Hours events, Legislative Dialogues, and more. Stop by the Trusler Business Center at 719 Commercial St., call 620-342-1600, or visit our website at www.emporiakschamber.org to learn more.

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“Let’s Talk Business” is a weekly column of the Emporia Area Chamber of Commerce and Visit Emporia. The mission of the Chamber is to be proactive in creating an environment for business and community success, guided by the vision that positive attitudes promote positive actions. Contact us at 620-342-1600 or chamber@emporiakschamber.org and visit our website at www.emporiakschamber.org.