For many folks, tans have started to fade and summer vacations are becoming a distant memory. The leaves are turning and there is a crispness in the air…
And with the entrance of the Fall means planning for the holidays. It seems like every year the holiday season seems to start earlier and earlier with holiday themed sales, decorations, and apparel entering both retailers and the proverbial zeitgeist once summer ends.
So, what does 2022 hold?
2021 was a banner year for many retailers as people were simply exhausted of Covid (when the Delta variant was not yet a thing) and were ready to celebrate with friends and family they have not seen for years. Holiday retail sales for 2021 were up a whopping 14% to reach $886.70 billion; people were very ready to spend and excited for things to be ‘normal.’
However, moving into 2022 growth may be muted, compounded by 2 key elements – rising inflation and the looming fear of a recession. According to Deloitte’s annual holiday retail forecast, sales are likely to increase between 4% - 6% with sales reaching $1.45-$1.47 trillion from November 2022 to January 2023.
Inflation has already impacted households across the country and when it comes to holiday shopping it will feel even more pronounced. More than two-thirds of shoppers surveyed expect inflation to impact their holiday gifting budget, according to Coresight Research’s consumer holiday shopping study. However, in contrast to inflation concerns the study found that 55% of US gift shoppers expect to spend in excess of $500 on gifts this holiday season, up from 48% in 2021.
Industry experts suggest that retailers stock up early to ensure ample availability of inventory when consumers are ready to shop. Consumers are drawn to shop early to take advantage of deals and address inflationary pressures.
Exploring Consumer Behaviors
Consumers are increasingly accustomed to deals and ‘deal holidays’ that there is no longer the need to wait until Black Friday to kick off their holiday shopping. Why wait when there is seemingly a deal around every corner? Amazon’s annual Prime Day, which takes place in July every year, is increasingly becoming known as an unofficial start of holiday shopping and this is a full 6 months before the Christmas Holiday. Let that sink in, 6 months before Christmas…
Consumers are savvy and have found ways to identify deals and get the best prices. In some ways it is truly a buyer’s market when it comes to retail purchases and businesses have no choice but to adjust to their demands to get the sale.
One recent industry report by LTK indicated that 70% of holiday shoppers are looking for more deals and sales versus last year to help save money, and likely help address they pain they are feeling from inflation in other areas.
And not only are consumers shopping early to try to get the best deals possible, but they are also moving from in-store to online. With the use of e-commerce, they have the freedom to shop where they want, when they want, making the entire experience even easier. According to the same study, the overwhelming majority of consumers, 96%, plan to shop online this holiday season. For many consumers, the entirety of the holiday shopping experience will be with a few clicks of the mouse!
Build in Communications with Consumers Early, and Often
Whether you are a small business or a big box retailer the key is cutting through all the noise that consumers are inundated with --- and they are inundated with a lot. Messages should be personalized, clear and concise. Ideally the message should come with a deal or special that speaks specifically to the needs of the recipient.
Social channels also help to reach a more targeted market, this is imperative for small businesses as well. Having a continued presence helps to build a brand and connects with consumers and helps to build loyalty in a (mostly) free way.
Keeping a Pulse of Trends + the Consumer Perspective
empatiX works with clients across industries to understand how consumers tick and what drives their behaviors. We work with a myriad of clients across industries to understand the nuance of behaviors and really get under the hood of consumer actions.
We would love to hear more about your business needs, feel free to drop us a line! hello@empatixconsulting.com