Although various expert forecasters predict consumers will spend somewhere between four and eight percent more on holiday gifts this year versus last, brands and retailers still face a battle to persuade those gift buyers to choose their items.
According to research from gift and payment card company Blackhawk Network, 58 percent of U.S. consumers are planning to change their shopping behavior this year due to the high rate of inflation. In particular, holiday shoppers say they are seeking to use more discounts and promotional offers for individual purchases.
As many brands seek to offer the price cuts and value deals that budget-conscious consumers are seeking—with such moves often cutting dramatically into a company’s bottom line—one group may be less in need of drastic measures. For a number of reasons, including those detailed below, sports and entertainment sponsors that have forged meaningful connections with fans stand a good chance of mitigating some or all of consumers’ price sensitivity.
Brand loyalty. One of the few factors that can overcome shopper budget concerns is a powerful and desirable brand. And one of the most effective ways of building a brand that is strong and differentiated from its competitors is through effective sponsorships that allow brand partners to borrow the loyalty that fans have toward their favorite teams, players, events, etc.
Compelling offers. Deep discounts, two-for-one offers and other price promotions are not the only way to deliver value to wallet-watching buyers. Leveraging partnerships to provide free or discount merchandise, tickets, experiences, exclusive content, etc. with the purchase of a sponsor’s product is often much more effective at encouraging purchases than merely lowering the price.
Connecting to causes. With nearly every sports and entertainment property conducting impactful programs and campaigns in support of local charities and community organizations, their brand partners can tie into those efforts to capitalize on consumer desire to put their hard-earned dollars behind companies that are making a difference. This is especially important in reaching Gen Z, with the majority of 18-to-25-year-olds in Blackhawk’s study looking for information about how their purchases will contribute to social and environmental responsibility, and 63 percent (versus 51 percent of older adults) saying they plan to give back to causes they care about this holiday season.
Seizing a trend. Every holiday season features in-demand items that overshadow cost concerns. One of those this year appears to be NFTs, with nearly half of consumers considering buying an NFT as a gift, according to Salesforce. Sports and entertainment sponsors already have a built-in connection with a sector that has led in the creation of digital collectibles and have the opportunity to partner with a team, league or celebrity NFT rather than creating one of their own.
Brands with smart activation programs that seize on the opportunities above should be in position to enjoy a very happy holiday season.