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KALAMAZOO, Mich.—As the busy holiday season kicks off, WMU business professors provide their perspectives on what trends are influencing consumer behavior and impacting households.

Home for the holidays, food and gatherings

Dr. Russell Zwanka, associate professor of marketing and director of WMU food marketing program 

“The key to the holidays for food is to remember food connects people, and the holidays connect people,” says Dr. Russell Zwanka, associate professor of marketing and director of the WMU food marketing program. “Every celebration, get-together, or event involves food, and the holidays usually call for higher-quality food. This year will be no exception to that rule, even with inflation compounding year over year. Consumers will change behaviors, using private label items for sides and ingredients in order to have enough money for a beautiful main entree.”

Zwanka notes that to guarantee a special holiday gathering, while also tackling inflation, shoppers will take advantage of specials, loyalty program discounts, and Black Friday and Cyber Monday deals, to find the best prices for gifts and also for gatherings. 

Another interesting trend is the sharp increase in the number of shoppers reporting they will be giving food and beverages as gifts this year. Apparel normally makes up roughly 20% of all holiday gifts, but food and beverage has risen to 16%, with shoppers responding to the personal touch these gifts provide. 

Lastly, Zwanka notes that many shoppers are reporting they will trade off travel and restaurants this season for higher-quality experiences sharing food at the homes of friends and family.

Is inflation squeezing the holiday season?

Dr. Matt Ross, associate professor of finance 

“Around the world, inflation has eroded some joy from the upcoming holiday season,” says Dr. Matt Ross, associate professor of finance. “While the Federal Reserve has started cutting back from the highest interest rates since the dot-com bubble more than two decades ago, there remains some risk of future inflationary pressure.” 

Ross notes that the Russian invasion of Ukraine has contributed to increased commodity prices, and the effects of that war may keep up inflationary pressure into the future. 

“With a new White House plan to implement tariffs on imported goods, we should expect to see further inflationary pressure,” he says. “Inflation helps explain why American credit cards have both all-time high balances and delinquency rates. Unfortunately, families may have less ability to provide the gifts they have in past holiday seasons, or may incur debt to fund their holiday celebrations.”

Gen Z and the holidays

Dr. Scott Cowley, associate professor of marketing, director of WMU digital marketing program 

“We expect a bigger increase in Gen Z holiday spending in 2024 relative to other generations,” notes Dr. Scott Cowley, associate professor of marketing and director of the WMU digital marketing program. “Gen Z Americans are averaging three hours on social media each day. It’s where they’re learning about products and where they’re ultra-comfortable buying gifts directly, unlike other generations. Shoppable social media, especially TikTok Shop, fueled by influencers and creators, is the hottest spot today to reach these buyers.”

According to one study, over half of Gen Z will limit their online holiday shopping to just TikTok Shop. Product categories such as clothing and accessories, cosmetics and tech will be heavily influenced by TikTok’s push for livestreamed shopping events hosted by popular creators. 

“Younger shoppers are hunting for holiday deals, and brands are going to offer these through exclusive social media and app-only promos, in addition to dangling ‘buy now, pay later’ financing options that are more popular with Gen Z than any other generation. I bet we’ll see Gen Z happily splurge on limited-run brand crossovers and influencer collaboration products—things like lululemon’s Disney collaboration or Zendaya’s line with On shoe company,” says Cowley. “Gen Z is going to be chasing products that most consumers haven't even heard about.”

Holiday advertising trends

Greg Gerfen, executive-in-residence, advertising and promotion 

“If it feels like holiday ads have suddenly appeared everywhere, you're not imagining it,” says Greg Gerfen, executive-in-residence, advertising and promotion. “This year’s holiday advertising season got off to a delayed start due to the elections. During election years, candidates receive priority for commercial ad time, pushing back the typical Oct. 1 start for holiday campaigns. Now, advertisers are playing catch up, running their holiday ads wherever space is available.”

The elections have also influenced the tone of holiday advertising, according to Gerfen. “With political ads often being negative and media reports highlighting national divisions, many holiday campaigns aim to provide a sense of escape and healing. This year’s ads focus on emotional storytelling, highlighting themes like underdogs, family and friendship. Some feature magical, whimsical worlds, while others tap into nostalgia to evoke warm memories.”

Cutting-edge technology is playing a role in this year's campaigns, too. Gerfen notes that Coca-Cola, for example, has launched holiday ads created entirely through artificial intelligence platforms.

AI and product recommendations

Dr. KC Chen, professor of business information systems 

“Artificial intelligence is already deeply embedded in a wide range of consumer products,” says Dr. KC Chen, professor of business information systems. “Each time users interact with Siri, Alexa or Google Voice Assistant, they are using AI technology. When Amazon suggests items that other customers have purchased, it employs machine learning and recommendation systems. Many contemporary consumer products integrate capabilities from multiple AI branches, reflecting a trend that will continue to transform consumer experiences.”

Product recommendations remain a longstanding focus for companies, Chen notes. “Traditionally, the recommendation systems branch of AI has relied on analyzing vast datasets to produce generalized recommendations for individuals. While effective at capturing broad patterns and trends, this approach often falls short in delivering the precision necessary to reflect individual preferences. This shortcoming leads to a phenomenon known as ‘uniqueness neglect,’ in which consumers perceive that AI models fail to account for their unique circumstances or recent behaviors, thereby impacting user trust.” 

According to Chen, more advanced recommendation systems now utilize granular insights from consumer behavior—such as repeated product reviews, purchase histories, social interactions and recent activities specific to each individual. Coupled with sophisticated AI techniques, these systems extract meaningful and highly personalized preferences from extensive data, enhancing the accuracy and relevance of product recommendations, which is even more important during the holidays.

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