The Power of Network Effects During the Holiday Season

Personalization is Key

Every retailer launches holiday promotions, sends email campaigns, and advertises across Meta and Google. To stand out and reach the right consumer, brands must focus on personal relevance. Personalized recommendations, drawn from browsing and purchase data, not only boost click rates but also enhance purchase intent. As a result, during the Christmas shopping rush, success depends not only on offering attractive deals but also on personalized strategies driven by data and strategic marketing.

The Importance of Social Networks

Personalization is even more effective when combined with strategic targeting through social networks, such as selecting the right influencer for holiday campaigns. You might instinctively choose the big names with the broadest reach. However, recent research co-authored by Florian Stahl, Chair of Quantitative Marketing and Consumer Analytics, indicates that smaller influencers can often make the biggest difference.

Small influencers are usually very connected to their followers and, therefore, more integrated into their social networks. If these influencers have direct or indirect connections to a brand, possibly through shared followers, they can serve as interconnectors. These influencers can connect brands to potential customers, helping their reach grow further and more quickly. This relies on the social principle of triadic closure, where people tend to connect when they share mutual friends. Essentially, shared connections build trust, expand reach, and accelerate the spread of campaigns. 

Network-Based Trust During the Holiday Season

This network-based trust becomes particularly powerful during the Christmas shopping period. Leveraging AI-driven targeting, brands can do more than just predict who is likely to purchase; they can identify individuals who are likely to influence others through reviews, social media posts, or recommendations. By combining interconnectors with data-driven personalization, brands can harness network effects, resulting in a multiplier effect on conversions. When trust, relevance, and timing come together, a shared recommendation can be more effective and impactful than discounts alone.

Practical Takeaways

For a campaign that is both widely distributed and personally relevant during the holiday season, personalization is crucial. But how can you implement this effectively?

• Prioritize personalizationwith AI: Leverage browsing history, past purchases, and customer preferences to create offers that genuinely connect with customers. During busy holiday shopping periods, AI can also help identify customers who are not only likely to buy but also prone to sharing deals, boosting conversions through network effects.
• Involve small influencers and interconnectors: Avoid focusing solely on major influencers. Smaller, highly engaged influencers with strong connections within their networks can boost reach. Their direct or indirect connections to brands allow them to act as connectors, quickly and reliably extending a brand's campaign reach to new audiences.
• Integrate relevance with network strategy: Targeting should extend beyond purchase likelihood. Study social networks and shared connections to identify customers or influencers who can help your deals spread more quickly, widely, and with greater trust.

A Strategic Moment in the Holiday Rush

The Christmas shopping season isn’t just a competition for attention and clicks; it’s a strategic chance to grow customer bases, boost brand visibility, and communicate in a meaningful, personalized way.

Who in your network can serve as interconnectors, and how can you leverage them to differentiate your brand during the festive season?

Further Readings:

• You can read the full research article here.
• Discover how Florian Stahl and his research team combine AI-powered marketing science with real consumer behavior to turn data into strategic results.