It’s a time of year where we are starting to see predictions about how holiday shopping will fare — Deloitte recently released consumer survey results showing some shifts in U.S. shopper spending expectations due to inflation. Their holiday forecast suggests that retail sales are likely to increase between 4% and 6% in 2022 (with holiday sales predicted to total $1.45 to $1.47 trillion during the November to January timeframe); yet, their data also suggests a more modest growth this year when compared to 15.1% increase during the same period in 2021.
Deloitte’s takeaways complement new research from Coveo that delves into consumer sentiment related to holiday shopping plans and expectations in an effort to help retailers understand how to navigate these behavioral shifts and tighter shopper budgets.
Coveo’s report, 2022 Holiday Shopping Report: Spending Trends & Impact, which examines survey responses from a sample of 4,000 consumers in the U.S. and U.K., found trends related to shopper behavior that reflect new realities for retailers as they try to entice customers amidst fluctuating economic conditions. The findings point to heightened importance of tactics related to deal timing, generational differences, and adhering to shoppers’ logistical pet peeves and preferences for flexibility, in order to contend with the inflationary pressures consumers and retailers are up against this holiday season.
A few highlights that stood out are:
· Consumers are starting to look for holiday deals/discounts surprisingly early this year: Nearly 1 in 2 shoppers said they will start shopping earlier than past years to seek out deals and discounts due to rising costs and availability of goods.
· Logistical challenges will be deal-breakers for many shoppers: 42% of shoppers explicitly said they will leave a retail site if shipping options are limited or they don’t have a buy online pick-up in store option; 35% of respondents said they are turned off by restrictive returns policies.
· Gen Z is a standout across multiple fronts: Gen Z is more apt to buy luxury goods online than any other generation (28% vs. 15% overall), more loyal to brands they shopped last year (41% vs. 23% overall), and more likely to factor sustainability into buying decisions (64% vs. 25% overall).
· Motivating factors go beyond discounts: Approximately two-thirds (67%) of people surveyed this summer are interested in product recommendations, tailored offers, discounts, and promotions. This, combined with the likelihood of spreading out purchases to take advantage of deals, means retailers should note that although many consumers are shopping more online, it may be more challenging to translate the interest into a higher Average Order Value (AOV).
While a large majority of respondents (80%) said that they plan to shop the same or more during the upcoming holiday season compared with past years, it’s worth noting that it is still up to retailers to be mindful of the current situation to make the sale. So, even though we will continue to see strong interest in shopping for the upcoming holidays, brands should note the anticipated behavioral changes related to shopping timeframes, generational mindsets, and expectations for intertwined online-offline customer experiences.
As economic conditions continue to fluctuate, brands must keep up with shopper behavior trends and test assumptions to keep the customer experiences relevant at all times and the focus on profitability and performance will be even more necessitated.