Conversation Starters

Subscribe to our blog to get the latest updates from our team

How phygital retail shaped the holiday shopping journey

February 6, 2024
Christine Nguyen, PhD

Christine Nguyen, PhD

Research Director

For a holistic and contextual understanding of shopper experiences, brands must consider not only what shoppers are doing, but also how they are feeling.

Our team at Reach3 Insights is passionate about understanding shoppers – it’s part of what we do. We’ve been tracking the evolution of shopping since the pandemic forced major changes to the way we think about shopping. 

Coming out of the pandemic, our shopping behaviors continue to evolve. It’s no longer about shopping online or shopping in-store. The modern shopper encounters a slew of ways (both physical and digital) to interact with brands and retailers throughout the shopping journey. 

In the quickly evolving shopper landscape, Reach3 clients have an increasing need to better understand the modern shopper — their journey, their behaviors, and their preferences. With this in mind, we compiled a list of questions — from ourselves and from clients / insights professionals — and set out to explore some modern ‘phygital’ shopper behaviors and sentiments.  

Leveraging our modern, conversational approach and Rival Tech, we engaged with American shoppers in the thick of the 2023 holiday season to capture their in-the-moment sentiments and behaviors. This is the first installment of our findings. 

Top Things Brands and Retailers Need to Know about the 2023 Seasonal Shopper 

1. Shoppers were feeling the financial stress this holiday season, but this doesn’t mean they weren’t spending!

Despite starting to shop early (76% started before December), shoppers reported feeling stressed about financial constraints and struggling to complete their shopping on time. Nevertheless, 64% reported spending the same or more vs. 2022, aligning with the record $964.4 billion in holiday sales reported, suggesting that finances might have impacted how shoppers felt about holiday shopping, but it didn’t stop them from doing it.  

Where was that money going? 

what shoppers spent money on - phygital and holiday shopping journey

Unsurprisingly, shoppers were focused on gifts during the holiday season, but many (particularly younger shoppers) were also treating themselves and outfitting their homes.  

Interestingly, some more experiential spending happened over the holidays, as well, with shoppers purchasing tickets to events (21%), movies (18%), and vacation bookings (17%). In fact, there might be a shift toward, or more interest in, experiential gifting – 67% of shoppers say they prefer to gift experiences over products. Gen Z and Millennial shoppers are especially likely to have this preference. We already know that consumers love brand experiences, and we’re curious to see how brand experiences might fit into the gifting occasion going forward. 

Prefer to gift experiences over products

2. Shoppers blended digital and brick & mortar in their approach to shopping, speaking to the importance of offering top-notch experiences across channels. 

The pandemic made cross-channel / omni-channel shopping almost ubiquitous, and omni-channel shopping seems to be here to stay. Over the 2023 holidays, shopping happened across stores, online, and via Buy Online Pick-up In-Store this holiday season. 

How shoppers shopped during the 2023 holiday shopping season

A majority of shoppers were, indeed, cross-channel shoppers – 62% shopped both online and in-store. Among these cross-channel shoppers, online did hold primacy for 46%, but, importantly, brick and mortar is alive and well; 29% shopped primarily in-store and 25% shopped equally in-store and online.  

Our research also suggests an opportunity for experiential or themed retail during the holidays. 17% of shoppers visited a holiday-themed pop-up store this holiday season, and Gen Z are particularly likely to have visited a pop-up. Opportunity exists for brands and retailers to stand out in the busy holiday shopping season with unique experiences that motivate shoppers to engage both in-store and digitally. 

the opportunity for pop-up stores - phygital retail for the 2023 holiday shopping season

3. Shoppers weren’t just looking for products, they looked for inspiration. 

The majority of shoppers (90%) looked for inspiration or ideas this past holiday season. Brands and retailers can reach shoppers with inspirational content and influence shoppers’ decisions related to gifts, food/beverages, and entertainment. 

Brands can best reach inspiration-seeking shoppers on social media, with 72% of saying they found inspiration on socials. However, shoppers are looking in a variety of physical and digital channels for inspiration, again showcasing a ‘phygital’ approach. 

top inspiration - holiday shopping season 

What about AI? 

AI was big news in 2023 (still is). While only 4% used AI for inspiration this past holiday season, 70% of shoppers are at least open to using AI. AI is particularly relevant for gift and recipe suggestions. Brands investing in AI might consider particularly relevant applications for the holiday season, including personalized gifting idea (based on customer profiles, previous purchases or searchers) and recipe ideas (perhaps pulling from grocery lists, dietary profiles, and occasions). 

What does this mean for brands and retailers? 

1. For a holistic and contextual understanding of shopper experiences, consider not only what shoppers are doing, but also how they are feeling. 

2. The modern shopper is channel-agnostic. Bring digital and store teams together to offer a consistently great shopping experience. 

3. Shoppers want to be inspired. Ensure content and activations are optimized to reach consumers where they are. 

Curious to learn more? Sign up for Reach3's Phygital Research Program to access this report now and receive updates about future studies. 

Christine Nguyen, PhD
Christine Nguyen, PhD

Research Director

You may also like

Retail

Our team at Reach3 Insights is passionate about understanding shoppers — it’s part of what we do. We’ve been tracking the evolution of shopping since the pandemic...

March 1, 2024 | 4 min read
Retail

Our team at Reach3 Insights is passionate about understanding shoppers – it’s part of what we do. We’ve been tracking the evolution of shopping since the pandemic...

February 6, 2024 | 4 min read
In-the-moment insights

Experiential brand activations have evolved from guerrilla marketing to a multi-billion-dollar category, a reflection of a seismic shift in consumer preferences....

January 16, 2024 | 4 min read