Consumer Spending Trends and Stats for 2023

2023 has been a roller coaster for businesses. From CPG to consumer electronics, consumer brands look for ways to see inside the looking glass for the pivotal Q4 holiday spending season. Mixed signals abound. In the spring, Kiplinger’s Economic Outlets says e-commerce and general merchandise spending remains strong and core sales (even adjusted for inflation) were up .6%, but sporting goods, clothing, and grocery continue to decline, this spring. But Father’s Day spending is expected to set records (National Retail Federation), as did Mother’s Day spending. E-commerce and DTC brands wonder how they should plan for the 2023 holiday spending season?

What are the top consumer stats for 2023 that ambitious consumer brands need to know?

86% of consumers say online sources helped them make more informed decisions (Google)
Holiday spending in 2023 is expected to increase 4.5% to $1.3 trillion in 2023 (Insider Intelligence)
98% of consumers plan to purchase a Christmas gift (Supermarket News)
55% of consumers have made a purchase directly from email (Cheetah Digital)
88% of consumers plan increased food-related purchases for Thanksgiving (Supermarket News)
31% of consumers say inflation will have a moderate impact on their spending (Numerator)
Purchases from banner ads are down 36% (Cheetah Digital)
In 2022, 80% of consumers researched or browsed before making a purchase (Google)
In 2022, 20% of consumers made a purchase on impulse (Google)
72% of U.S. consumers are prepared to purchase more from their preferred brands (Cheetah Digital)

Sometimes it’s hard to get a handle on how the consumer feels, especially since your analytics and stats are always backward-looking. That’s why it’s helpful to look at how major retailers view the marketplace.

What are big brands saying about 2023 consumer spending?

“We continue to see some improvements in many items, commodity prices are starting to fall – not back to pre-COVID levels in some examples, but continue to provide some relief – things like chicken, bacon, butter, steel, resin, nuts…Our average transactions, our shopping frequency is up…So those things bode well, but people certainly are spending their dollars where they feel like they should be spending them.” – Costco CFP Richard Galanti

“What we are seeing is the consumer making $80,000 a year is trading down…The current economic climate is driving more higher-income consumers into value retail.” – Dollar Tree CEO Rick Dreiling

“..We believe the desire to be with loved ones, go on vacation, and attend events has not diminished, and expect gift-giving and occasion-based demand to continue. – Macy’s CEO Jeff Gennette

Top trends driving consumer spending

Consumer Loyalty

Given rising prices, consumers increasingly choose to stick with the brands they know and love. Consumer brands can leverage this through loyalty programs and word-of-mouth incentives. Give your loyal customer a reason to share your email or recommend your brand, so the next time it comes up with their friends, your brand is top of mind. One way to do this is provide tips and social proof in your email marketing. It’s all about positioning. Your current customers don’t need to be “sold”; they need to have their choices reinforced. Therefore we recommend brands leverage PR coverage in their email marketing with a pat on the back and share an incentive to their existing customers. For those who are on your list and haven’t yet purchased, use a “look what others say,” message.

Values-Based Messaging

On the decline? Purpose-based messaging. Only 16% of consumers are voting with their wallets about “responsible brand” messaging. This is likely because of a general fatigue of this type of messaging. Consumer brands sound continues with existing social-impact programs but present them to consumers as part of the brand, not as a defined campaign.

Advertising Trust Decreases

While searching online for third-party verifications like reviews and media coverage is up, purchasing from banner ads is down 36% – consumers know ads aren’t trustworthy. Consumers are overwhelmed with messages and struggling to keep up with all the “buy now” signals. They’re looking for ways to cut through the noise and they trust search results and social proof more than anything else. This is also a good time to invest in quality owned content. As search continues to evolve due to AI changes, quality content will become more critical.

In conclusion…

Consumer holiday spending will be up, but consumer brands will need to fight both harder and smarter for those dollars. This isn’t the year for ambitious brands to take their foot off the gas. You can examine ways to spend smarter with your existing agency or you can look for programs that decrease PR agency costs for consumer brands.