Consumer trends for this year's holiday shopping season include spending less and shopping early. Learn how your brand can make it to the cart.
The holiday season is fast approaching and this year is unlike many others. Consumers are battling record high inflation, persisting supply chain issues, a labor shortage, increased gas prices and continued concerns about COVID-19. These conditions have created some very different expectations than last year's 2021 holiday shopping predictions.
Adapting to these new consumer behaviors will be crucial for brands to thrive in the upcoming holiday months. By taking a look at holiday consumer trends in 2022, we identify how stores and online retailers can adjust their strategies to meet consumer demands.
Here are six 2022 holiday trends and strategies that brands can use to ensure success.
1. Offer thoughtful, budget-friendly choices
Uncertain economic conditions and inflation are altering how shoppers plan to spend for the holidays. A report from ShipStation suggests that consumer priorities have shifted with 58% of U.S. consumers expecting to cut back on non-food spending over the holiday season. If shoppers cut back on their gift budget to adjust for their increased grocery bills, then this could be a loss of $30 billion in holiday sales.
Although it is possible that holiday sales stay steady in 2022, brands must recognize that consumers are more concerned with their spending this year and should adapt accordingly. The more thrifty consumer is likely to pay greater attention to sales, discounts and lower-priced gifting options. Ensure your brand gets shopper attention by featuring eye-catching product deals or lower-cost product options.
2. Make buying easy with purchase options
It is no secret that e-commerce sales are up and a good mobile experience is crucial in capturing the modern consumer. Retailers need to recognize that convenience is key for many shoppers and this value will carry over into how they tackle their holiday shopping.
While some individuals may happily make purchases in physical stores this year, there are many others that may only browse brick and mortar for inspiration and/or prefer the e-commerce purchase experience. However, consumer budgets have tightened and online shopping comes with an added price - shipping. The extra shipping costs on top of holiday purchases may detract some consumers from their preferred shopping experience.
In order to compete with e-commerce, retailers need to make buying as easy as possible using multiple purchase options. Ensuring your customers can get every product they want using delivery, in-store pickup, curbside pickup, or ship-to-store can provide conversion driving value through offering convenience and cost savings. For e-commerce retailers, consider free shipping offers and other discounts that reassure cost-conscious consumers that they are not paying an unnecessary premium by shopping online.
3. Use human interaction to set yourself apart
We already know that customer experience is everything. A recent consumer survey revealed that 66% of Americans are likely to abandon a brand after a poor customer service experience and 71% are likely to recommend a brand after a positive customer service experience. Unfortunately, the busyness of the holidays paired with a retail labor shortage and supply chain issues can make offering great customer service challenging.
Some brands may utilize technology such as chatbots to assist in management of holiday customer service traffic. The drawback is that customers want to communicate with other humans. Most customers report that they prefer communicating with brands through a live agent on the phone or online chat. With experience being so important in gaining and maintaining your brand consumers, it would be wise to have an appropriate amount of agents ready to assist shoppers this holiday season.
4. Start your promotions earlier than usual
Rising inflation has led consumers to establish new budgets that require them to start holiday shopping earlier and spread out their spending. According to research from Salesforce, 42% of shoppers worldwide and 37% of U.S. shoppers plan to start buying gifts earlier. Their top concern was inflation and they hope to purchase holiday gifts before prices rise any higher.
Brands need to ensure promotions align with their shoppers buying schedules, so starting early is recommended. Making sure to utilize differentiated online promotions, personalized email offerings and in-store sales with distinctive value. Retailer foot traffic is up and brands should be providing unique in-store offerings because they are likely to reach more consumers.
We are already witnessing many major retailers pushing their sales earlier than normal. Early fall holiday savings have been seen from both Target and Walmart, with Amazon also launching a second Prime Day event in mid October.
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5. Drive discovery using influencers and TikTok
Social media is a force that is driving holiday 2022 trends and gift purchases. In fact, McKinsey reports that 58% of consumers say social media will influence their holiday buying decisions. Consumers' top platforms included Facebook (67 percent), YouTube (57 percent), and Instagram (52 percent). Differing a bit from Gen Z, where 87% expect social media to influence their holiday shopping and reported TikTok being one of their most likely inspiration sources instead of Facebook.
Through effective use of influencers on social media, brands can boost discovery and shorten time to purchase. This strategy is especially effective for the younger generation as TikTok has become one of their default ways they discover and search for products. TikTok recently reported that 56% of their users are coming to the platform to discover new products or brands.
6. Don’t neglect classic shopping traditions
Consumers may be shopping early and online, but that does not mean they will forgo their Thanksgiving weekend traditions. Black Friday is considered the biggest shopping day of the year and it has turned into an annual event for consumers.
In-store Black Friday shopping has been impacted by COVID-19 for the past few years, so it is possible that shoppers will be eager to return to their holiday shopping traditions with friends and family. A poll conducted by NRF and Prosper Insights & Analytics, reports that 45% of holiday shoppers say they are likely to browse and buy in stores on Black Friday this year.
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