Shopping in the Social Media Age | 4

0:06$998 billion. That's the amount of holiday spending the National Retail Federation projected for this season. Forecasters are describing this period, which runs from November 1st through December 31st, as a kind of return to pre-pandemic normalcy. Consumers aren't in the pandemic shopping frenzy anymore, but wage growth has outpaced inflation, which retailers hope will push spending online and in person. The Federation predicts 2.5 to 3.5 percent sales growth over last year. And in an effort to ensure that this season meets those expectations, Well, you probably saw a rash of emails, texts, mailers, and in-store holiday decor earlier than ever.

0:46In fact, one of our guests put out a holiday gift guide on October 3rd. We're going to talk about all that. Plus, as TikTok's influence continues to expand, social media is a huge factor in what we buy and how we buy it. There are a bunch of, like, cool girl Christmas gift ideas all under or around$50. But it's that time of year, and this is a boyfriend-approved gift guide. Last year when I posted my gift guide, it got over a million views and the prices of vintage calendars on eBay skyrocketed by about$100. So let's see what happens this year. We wanted to dig into some trends in consumer behavior and how companies are responding to meet demand.

1:21So we're talking all things holiday shopping today and the repercussions for the American economy. I'm joined by Jordan Holman, a business reporter covering the retail industry and consumerism for The New York Times, and Kitty Guo, a writer for New York Magazine's The Strategist, covering beauty, fashion, and gifts. All that's coming up.

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3:51from wondering i'm david brown and this is shopping in the social media age for business wars jordan holman what's the best gift you've ever given what about the best gift you've ever received so i would say the best gift i've ever received was when i was like four or five my parents gave me a Fisher Price dollhouse for Christmas that I used all of the time. I love that dollhouse. Everyone's got one of those special gifts that they remember from when they were four or five, you know. So yours was the Fisher Price dollhouse. What about the best gift you've ever given? Well, when I think about that, one of the best gifts I would say I gave my parents was a few years ago during the pandemic, I went on Etsy and I got this handcrafted wooden plaque of the city of Chicago, where we're from.

4:40And I got it personalized to put a little star on the neighborhood where we're from. And it was like part of 30 years of them being in Chicago, but then also an anniversary gift for them. And so I see it anytime I come home and I'm home right now. So it's hanging out and I'm like, that's a good gift. That's wonderful. Those are great. Kitty, I'm not letting you off the hook. Kitty Guo, what about you? What's the best gift you've ever want to start with received? Sure. Well, I think for me, I feel as if I have more than enough stuff already. So I really appreciate experiential gifts. There is a restaurant here that I really wanted to try that was very difficult to get reservations for because they open at seven in the morning and they go really fast.

5:25I would never have gotten a reservation myself because I'm just not a morning person and I have not woken up at 7 a.m. in years. But my partner managed to get one for my birthday, so I was very, very happy about that. Oh, that's so cool. What about the best gift you've ever given? I like to think I'm a pretty good gift giver. Last year, I got my partner a wallet because he mentioned that his was sort of coming apart at the seams. I found a small artisan leather worker in Youngstown, Ohio. I got it personalized. It was all handmade, all hand stitched in his favorite color, green, monogrammed with his initials.

6:09He loved it. He's using it and will probably be using it for years to come. Yeah. It's a lifelong gift. It's one of those treasures. That's wonderful. Kitty, in addition to working for The Strategist, you also have your own Substack newsletter, Worn In, Worn Out, where you talk about discoveries from scouting independent makers and online vintage stores. Where do you go to search out these more eclectic finds? Where do you find things like the wallet or other wonderful gifts? I do think social media is a big one. Every brand, of course, has a social media presence. So definitely Instagram is a large part of how I find things.

6:48Also, Reddit, I believe, is a really good source. I am scouring that subreddit, buy it for life, always for recommendations for really well-made, high-quality goods. I really like having those sort of like peer recommendations from people who just have vetted things already and can give their like personal vouch for it. See, I get the Reddit approach because you do have that feedback loop. But sometimes I see on social media, like Instagram or Pinterest or something like that, you see what looks somewhat organic, but I'm just not so sure. I think sometimes some of those things are planted. And I know that some people have really been burned.

7:31I'm not going to raise my hand here. But I'm curious, Jordan, have you ever done the social media route to find more eclectic stuff? I have. Well, maybe eclectic is not the right word there, but social media has found me when I am already looking for things. And then, you know, you go on Instagram and, you know, it's tracking you in that way. And how's that worked out for you? I have ordered like three things across like Facebook and Instagram. And every time I'm like, will I get this? You know, and I have, but it's just one of those things is I don't do it that often. But when you say eclectic, I would agree with the idea that it's kind of things that you just see so much.

8:12It's sometimes hard to feel like, oh, this is a fine. No one else is getting this ad like I am. That's just it. It seems like there's something, maybe I'm wrong about this, but it seems like there's something of a backlash against the homogenous culture brought about by influencers. Do you think there's something like that going on here, Jordan? Well, even back in 2019, I remember talking to people about they want to be de-influenced. They want a de-influencing movement. They don't want to see the same influencers talking the same products and kind of getting back to who can I go to for advice that they didn't get a brand deal, that they just really like this.

8:51I think in some ways TikTok has provided that if it's not, you know, from an influencer. And then like Kitty was saying, like Reddit is really great for that. I think people have the assumption if they're going to Reddit, that's just a real person giving their reviews and their thoughts. And you can almost trust it a bit more. But that's just it. It's a real person giving their reviews and thoughts. I think that's a wonderful strategy. Any other ideas for trying to get real people's opinions here, Kitty? I mean, I do think that people are sort of wising up to the influencer brand scheme. And I do think if a product is actually truly good, then it should be able to speak for itself.

9:33But obviously, too many times you'll see influencers just singing the praises of this or that, and it's because they got paid to. And then the average consumer will buy it and will be like, wait, this isn't really living up to the hype. But I do think people are looking more to curators, quote unquote, rather than influencers. They're looking for people whose tastes. Whose reputation is built on it. Exactly. And they trust their taste. They trust that they're discerning and thoughtful people and won't sell you things that they don't put their weight behind 100%. In fact, Kitty, you confessed on your sub stack that even though editorial content about holiday shopping comes out as early as August, August, I mean, you feel better about dropping your recommendations in November.

10:23What would you think? Late summer's too early for a discussion of holiday giving? Or why is that? Well, I mean, for me, the PR pitches for holiday gifting start rolling in around July and August. So it's sort of for my job, it's unavoidable to think about the holidays in the summer. But I do think the bulk of the shopping happens around Black Friday time in November or like maybe October if you're really an early bird. But definitely November, December is the time when it's just foremost in everybody's minds. And summertime, everyone's trying to enjoy the last days of summer, trying to get as much warmth and sunshine as possible.

11:02It's not really something people are thinking about at that time. Yeah, I'm afraid that if I buy too early, I'm going to miss out on the deep discounts that they announced like the day after Thanksgiving, that sort of thing. Jordan, what do you think is behind this push to move holiday content and marketing earlier and earlier? This Philly is a chicken or the egg situation. Yeah. Like, are we seeing these deals earlier because retailers are putting them out earlier? So we're shopping earlier or retailers putting them out earlier because they know we're shop earlier. We want it in that way. But one of the big pushes is it allows retailers to just spread their sales across the season more easily.

11:40You know, historically, a department store could get, you know, two thirds of their sales during the year in the fourth quarter. And so if you spread it out, get people to start thinking about the holiday in late September, early October, then you can better gauge what they would say their demand, what people want. If they sell out of a product, they still have a little bit more time to reorder it. So it helps operationally. But then the other argument I would say is you saw that people start buying Halloween stuff in July. People like buying things for the season. So why not give it to them early?

12:17I guess. But I would think that there might be a risk of consumers sort of getting holiday buying fatigue if we keep pushing it, pushing it, pushing it. So I would say one thing. Walmart and Target and the like, they've all said, you know, as over the past few years, as people have pulled back on spending just across the board, one of the things that they see activates people is buying for seasonal holidays. People love costumes. People love like the doodads that you put around the house. So it actually is still a reliable category that people don't seem to have fatigue around right now. We're going to have to talk more about Walmart and Target and their prominent role in the holiday shopping season.

13:00But first, we're going to take a break. And when we come back, we're going to get into some specific trends in buying this year and whether quiet luxury is still driving purchases. Stick around.

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15:22Welcome back to Business Wars. My guests are Jordan Holman of the New York Times and Kitty Guo from New York Magazine. We've talked about what's driving people to buy gifts and how early marketers are targeting shoppers. Now let's turn to the kind of gifts that people are buying. There's a new trend that I want us to dive into, and this is something called quiet luxury. Let's hear a clip from YouTube creator Cassie Thorpe. She put it like this. Early last year, we sort of heard the mumblings of what would be a huge trend. And this was quiet luxury, also known as stealth wealth, also known as the old money aesthetic.

15:59It had a number of different nicknames, but they all basically meant the same thing. And what sort of started out as a little candle of a trend turned into a bonfire with a few sort of like cultural moments that helped it cement itself as something that was going to stay, or at the very least, be talked about for quite a while. Kitty, can you explain this quiet luxury term? Where does it come from? Have you heard it before? Yeah, I have. So I would say quiet luxury is sort of an understated vibe. It's got elegance. It's more concerned with timelessness and high quality as opposed to something very flashy or extravagant.

16:44I would say some examples of brands that are synonymous with the quiet luxury trend would be Kate or Bottega Veneta or The Row that sort of don't have the logos splashed all over them. They're just very chic, streamlined silhouettes that are going to last for years and years. Sort of an understated elegance, it sounds like. Yes, absolutely. Yeah, yeah. Jordan, are you seeing consumers stretch in terms of buying gifts? And I wonder how much inflation is a factor in shopping in 2024. Well, in 2024, you're seeing less of that, the categories that would be like attainable luxury. So if you think like of a coach or Kate Spade or whatnot, that category, it's not doing gangbusters like it was doing earlier because you're seeing the bifurcation.

17:34People are either they can already buy the luxury and they will continue to buy that or they've traded down and they're trying to find cheaper prices. So it's interesting where quiet luxury falls right now, just like looking from a company standpoint, that companies actually have to like signal that this is luxury a little bit. Not just getting cheap here, folks. Yeah, yeah. This is luxurious, but it's price conscious. Yes, exactly. So that's kind of troubled the definition of quiet luxury. Kitty, what are some of the other major gifting trends right now? I might even go so far as to say that trends are dead.

18:17I mean, I think - Oh, whoa. Hot take. Ooh, hot take. I do think personalization at the moment is quite popular, such as gifting, like monogramming things. Bag charms are a very big thing right now because people want to decorate and accessorize their bags in ways that are reflective of their own personality. I think just because our algorithmically dictated consumer tastes have been flattened and are all very similar at the moment, we're looking for more ways to distinguish them for ourselves. I really like that idea of the monogram or the inscription, something that's personalized because it doesn't often add a lot to the cost of the good, whatever that is, or the gift.

19:02But it does clearly communicate, this is special because I got it for you. You know what I mean? Yeah, absolutely. And it's such an easy way to make a gift seem a little more special. Yeah. Yeah. Over the past few years, I mean, to your point about the trends, I know whether or not we're over them yet or not, certainly they've sped up with the introduction of TikTok into everyone's hands. How do you think that platforms change the way folks shop? Kitty, what have you observed on that score? I mean, TikTok definitely has the power to elevate certain brands and products. The peer-to-peer marketing is super effective when you see a bunch of people who are the same age as you, the same circumstance as you.

19:48It's why all the tween girls have Drunk Elephant and Solde Gennaro and Laneige on their Christmas wish list. It's why every influencer has an Octobuddy on the back of their phone. And on TikTok, you can really see a product in action and see how it works before you buy it. So I'm sure the brands that get anointed by the algorithm are thrilled about it. But I obviously do also think that it has that flattening effect where everyone just ends up lusting after the same thing. TikTok shop has certainly made it easier to purchase gifts directly on the platform. I mean, easier than ever before. I mean, you just watch this video of a creator telling you, well, you have to get this latest, what, skincare tool or whatever it is.

20:34And, you know, tap once and you purchased it and you haven't even had to leave the app. Jordan, you have any data on just how many consumers are actually buying from TikTok Shop? Well, we know that TikTok Shop started last year, but it's still a huge ramp up. I would say that it's unclear exactly how many people are using it right now. But just anecdotally, a lot of people are going there first, seeing what there is to buy. And then maybe, you know, they're not buying, but at least that is an impression that companies are looking at. I would also say the other things for brands who sell in TikTok shops, the ones I've talked to, they said that's a huge boost to their sales.

21:12And in a way where they don't have to spend on marketing because TikTok shops, the way that the business model works, is actually cheaper for them to sell there versus being on Google or like having to market on Instagram. See, I noticed that it seems to, oh boy, I'm about to reveal something. It seems like I buy more than I ever intended to. And I'm wondering if that's not because TikTok has this, that it's kind of pushing us for those impulse buys, you know, whether we're buying for someone else or maybe for ourselves, right? I mean, do you think that's what's happening with TikTok Shop, that there are more impulse purchases there?

21:55That's definitely a function of TikTok Shop, and you've even seen other competitors try to fall in line because I see that people are impulse buyers. So recently, Amazon launched Haul, which is a lot of people say a competitor to Timu, but it's the same idea. Like, see this cool doodad, buy it quickly, don't think too much of it, and everything's low-priced. It feels inconsequential. But, you know, if you keep doing that over time, you might look back and say, wow, I spent a lot. Yeah. How do you think this is affecting consumer shopping habits? I mean, we've seen the prices of things that creators are promoting rise just because they've gone viral, right?

22:32It's definitely a struggle for brands, who might be small brands, to handle rapid demand. So if they go viral, then they have to start fulfilling all of these orders and they might be just a sole proprietor. That's like a huge burden. So that's one dynamic to it. But I think on the consumer side, it just reinforces that everything should be convenient for us. It should be quick. If you want it now, you can get it now. And I think that's a huge mindset shift that's been happening over years, but it's sped up over the past few years. Kitty, you think that's right? Oh, yes, absolutely. TikTok shop just makes it so seamless and frictionless to add stuff to your cart and check out.

23:14Same thing for Instagram shopping as well. You see an ad and within 30 seconds, you could have it on the way to your door. So it really facilitates the sort of mindless scrolling and buying without really thinking about it. You could be scrolling at 3 a.m. and wake up the next morning and be like, what have I added to my cart last night? I learned a little tactic, by the way. I put it in the cart before I actually hit by now. You know, it's it's that's something I've got to do now. And I give myself 24 hours. Otherwise, I'm in deep trouble 30 days later. Coming up, we're going to sort out the winners and the losers of the 2024 gifting battle.

23:55Spoiler here, Target did not hit their mark. We're going to talk about that and more when Business Wars returns.

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