Q4. The big one. For retail and hospitality businesses, it’s an unmatched quarter in both chaos and revenue. With holiday shoppers, Black Friday deals, and year-end clearances, your real-world traffic might be skyrocketing. But here’s the catch: while things might be buzzing in-store, your online metrics could be telling a different story.
Many business owners start to feel uneasy. You’re investing in ads, crafting your best emails, and yet you see costs go up, engagement drop, and emails barely get opened. Before you panic, let’s break down why these things happen—and more importantly, how to navigate them with smart strategies.
1. Ad Costs Will Spike—And It’s Not a Bad Thing
In Q4, ad costs spike sharply due to increased competition. According to Facebook’s own ad data, CPM (cost per thousand impressions) can increase by as much as 25-50% starting in mid-November and peaking around Black Friday and Cyber Monday. The spike typically lasts until the week after Christmas. Google Ads follow a similar trend, with CPC (cost-per-click) rising around 20-30% during the holiday shopping season.
But higher costs don’t mean wasted spend. If your ads are still driving conversions, your ROI could remain positive.
Strategy Recommendation:
- Refine Your Targeting: With costs rising, precision is everything. Retarget your warm audiences—those who have visited your website or interacted with your brand recently.
- Optimize Your Spend Around Key Dates: Focus your budget around Black Friday, Cyber Monday, and the final week before Christmas when shopper intent is at its highest. During low-intent periods (like the days just after major sales), consider dialing back ad spend to conserve budget.
- Diversify Your Ad Channels: Explore alternative platforms where competition may be lower, like Pinterest, TikTok, or even niche marketplaces. Retailers can use platforms like Google Shopping, which may offer better ROI for product-based businesses.
2. Engagement Drops—But That’s Okay
While Q4 typically sees high consumer spending, engagement on social media platforms can fluctuate. Research from Socialbakers suggests that engagement on Facebook and Instagram often decreases in November and December by 15-20%, as users are overwhelmed by both personal commitments and an influx of holiday promotions.
That doesn’t mean your content is ineffective—it’s just competing with more noise.
Strategy Recommendation:
- Create Shareable Holiday Content: Focus on shareable, seasonal content. Gift guides, product recommendations, and user-generated content work especially well to encourage engagement and brand visibility.
- Use Short-Form Content: Use Instagram Stories and Reels or TikTok to post fun, digestible content that’s easy for users to engage with quickly, even when they’re busy.
- Repurpose Top-Performing Content: Look back at what worked earlier in the year and give it a holiday twist. This saves time and taps into proven content strategies.
3. Emails Are Less Likely to Get Opened
During Q4, customers’ inboxes are packed. With an average open rate decline of 10-15% in November and December, many carefully crafted email campaigns get lost in the crowd. However, despite the lower open rates, targeted campaigns and personalization can still drive strong results.
Strategy Recommendation:
- Segment Your Audience: Instead of sending blanket promotions, segment your audience by behavior (e.g., past buyers, cart abandoners) or demographic (e.g., age, gender, location). Personalized emails see a 20% higher open rate than generic blasts.
- Test Timing and Frequency: Try sending emails on non-peak days (like mid-week) or outside of peak hours (early mornings or evenings). Be careful not to oversend—retailers who send too frequently risk unsubscribes.
- Use Strong, Enticing Subject Lines: Craft subject lines that stand out in crowded inboxes by tapping into urgency (e.g., “Last chance to save!”) or exclusivity (e.g., “Just for you: VIP early access”).
4. Why All of This is Actually a Good Sign
If your business is keeping up despite rising ad costs, lower engagement, and fewer email clicks, that’s actually a good sign. It means you’re doing something right in the real world. During Q4, the focus should shift from just online metrics to the actual results on the ground. Remember, over 30% of shoppers in 2023 said they still preferred in-store experiences for holiday shopping.
Strategy Recommendation:
- Track Sales Holistically: If you have both an online and physical presence, make sure to track sales across both. Consider how your online campaigns drive in-store traffic (through promotions like BOPIS) and adjust your strategy accordingly.
- Leverage Local SEO: Update your Google My Business profile with holiday hours, deals, and customer reviews. Local search is critical during the holiday rush—46% of Google searches are seeking local information, like store hours or product availability.
- Optimize for Last-Minute Shoppers: Ensure your site and checkout process are ready for an influx of last-minute customers. Highlight fast shipping options or offer in-store pickup to capture those racing against time.
5. The Big Takeaway: Real-World Impact Beats Online Metrics
The Q4 period is a reminder that online numbers—whether it’s rising ad costs, lower engagement, or decreasing open rates—don’t always tell the full story. Real-world results, like sales, foot traffic, or even customer inquiries, should be your north star.
Strategy Recommendation:
- Prioritize a Seamless Shopping Experience: From mobile-friendly websites to smooth checkout experiences, frictionless shopping is key. Shoppers will abandon their carts if the process is too slow or cumbersome—about 70% of online carts are abandoned, often due to long checkout processes or shipping concerns.
- Create Holiday-Specific Incentives: Incentives like free shipping, gift cards, or discounts can give your brand an edge. Keep in mind that 90% of holiday shoppers look for promotions before making purchases.
- Focus on Post-Holiday Customer Retention: After the holiday rush, don’t let your new customers fade away. Offer loyalty programs, send thank-you emails, or provide early access to future sales to turn one-time buyers into repeat customers.
