For businesses, the New Year means sorting out the sales from the previous year. After that, a thorough performance analysis is needed to set up a new KPI for the new year. For the most part, online sales might’ve gone through the roof during the last months of the year.
Carrying the sales increased in the holiday season, it is not uncommon to hear the expectations from the higher-ups for the upcoming sales. Nevertheless, that expectation isn’t unwarranted in terms of data and charts alone. But one thing to note, the beginning of the year often marks a challenging period for digital business strategy, with January and February witnessing a noticeable dip in conversion rates.
If we take a closer look at the shift in digital marketing funneling from conversion to consideration/awareness, we’ll notice a change in consumer behavior. This article will talk about the reason behind the change in behavior and the shifting priorities in the New Year, then conclude with steps to mitigate the drop in sales in the first quarter of the year.
Understanding Consumer Behavior in the Post-Holiday Exhaustion
The holiday season at the end of the year leaves the majority of people light on their wallets. This repeated pattern is especially astonishing in the consumer behavior study as one of the most impactful marketing seasons. But what is consumer behavior?
Consumer behavior is defined as the actions and decisions made by people related to the purchase and disposal of a product or service. Many factors that can determine the consumer’s decision to make a purchase, and many are heavily influenced by promotional discounts.
During the holiday season, there’s competition between brands on who can offer the most discounts. Black Friday, Christmas, End-Year, and even Clearance Sale are the main events of Q3, not to mention other mini-events by each brand. This leads many consumers to take advantage of the holiday specials and splurge on the money.
However, the frenzied shopping, elaborate celebrations, and the overall festive hustle and bustle can leave individuals feeling drained both physically and financially. This phenomenon is often coined as ‘post-holiday exhaustion’. The aftermath of such an intensive period can result in a reduced enthusiasm for entertainment spending, translating to lower conversion rates for businesses.
Following the festive season and welcoming The New Year, many individuals need to prepare themselves for the change. This preparation is related to new necessities, goals, and environment.
New Year = New Priorities
The New Year is the financial recovery period for the majority of people after the holiday season. It often prompts individuals to reevaluate their priorities and set new goals. This shift in focus can significantly impact consumer behavior, influencing purchasing decisions and preferences. Businesses need to recognize that the start of the year is a period of reflection and goal-setting for many, leading to less priority on certain product categories.
For instance, consumers might prioritize practical purchases over luxury items. Online marketing strategies need to align with these changing priorities, highlighting products that cater to the practical needs and aspirations associated with the new year.
Despite the changing priorities in the new year, the true drop in conversion rates doesn’t start until February. This is because January doesn’t experience steep promotional marketing from December, and some brands even hold another sale to clear out the holiday specials. This keeps January in the relatively high conversion ranking in the first quarter, but not enough to compete with the other monthly sales.
The slowest month falls in February when the last trickle of indulgence seeps out of the consumers. In addition to the shorter month, there are simply not enough major shopping events to stimulate consumers to make purchases.
Naturally, exceptions occur in all kinds of situations. But the general trend is that consumers tend to spend less, especially on the tertiary level, in the first quarter of the year. By understanding and adapting to these shifting consumer priorities, businesses can reevaluate their marketing plan to prepare for the conversion dip.
Lower the Conversion Budget, Create Awareness/Consideration Campaigns Instead
To cope with the lower conversion rates, businesses need to take on a slower business strategy and development. Understanding this phenomenon requires businesses to empathize with their customers, recognizing that the start of the year may not be a suitable time for aggressive sales pitches.
Instead of focusing on immediate conversions, allocating resources towards creating awareness and consideration campaigns can prove to be a strategic move. To achieve awareness and/or consideration funnels, internet marketing is the perfect method for many brands.
During this period, consumers are more likely to engage with content that informs, educates, or entertains. By shifting the focus from direct sales to building connections and fostering consideration, businesses can lay the groundwork for future conversions.
Creating powerful social media campaigns will maintain brand visibility to new and existing audiences without pressuring them into immediate transactions. This might include influencer collaborations, engaging interaction, or simply a toned-down version of the brand’s social media.
To Sum Up…
All in all, navigating the challenges of Q1 requires a strategic shift in approach to sustain throughout the year. Basically, the first quarter of the year calls for a more intensive social media marketing strategy. If your brand needs some out-of-the-box content marketing ideas to tackle the slow months, Avond Studio is your partner-slash-business expert. No worries, we’ll cook only the most interesting strategy for your brand.