Holiday sales are predicted to hit an all-time high this year, with experts anticipating total retail sales to jump 7%, reaching $1.297 trillion.
Despite this tremendous growth, there are some consumer behaviors that brands must account for to have a successful season. With Prime Day kicking off holiday shopping in early October, consumers were exposed to far more promotions than ever before, contributing to promotion fatigue. Inflation is also in the back of shoppers' minds, leading them to become more mindful of holiday spending habits.
Our team has been tracking trends for the holiday shopping season so make sure to get on our list to stay up-to-date with retail insights. We recently attended a webinar hosted by Insider Intelligence and eMarketer that focused on how retailers can create a more positive shopping experience for consumers.
Here’s what we learned:
The longer holiday season is causing promotion fatigue
Big-box retailers want to compete with Prime Day (such as Target, Walmart and Best Buy) which means shoppers are inundated with promotions starting in October.
This influx of promotions removes the urgency from holiday shopping. Since consumers have three months of holiday sales, there’s no risk in not acting on holiday sales when they know they can get the same deal later in the season.
What can retailers do to overcome this? When planning holiday promotions this year, brands must consider shoppers' longer purchase cycle and consideration than perhaps they did during the pandemic when the purchase journey was more immediate. Consider how you can differentiate yourself from competitors by creating more personalized shopping experiences.
Consumers are returning to brick-and-mortar stores
Brick-and-mortar sales are expected to increase by 5.9%, coming off an unprecedented 16.5% increase in 2021. This means brands that aren’t doing well in the brick-and-mortar space will struggle to rise in rankings.
What can retailers do to overcome this? Create impactful and meaningful moments that complement your brand's omnichannel strategies.
Looming inflation is impacting consumer behavior
With all that said, it’s important to consider inflation and a possible recession around the corner. As prices continue to rise, consumers are growing weary of unnecessary purchases.
This doesn’t necessarily mean consumers won’t spend – disposable income still exists for this holiday shopping season, but shoppers will be more mindful of their spending habits.
“Shoppers will be making smarter, less impulsive holiday shopping decisions and discounts will be an important factor in their purchasing decisions" (Insider Intelligence).
What can retailers do to overcome this? This is yet another reason why brands must meet shoppers where they’re at in the buyer’s journey. To combat the shopper’s uncertainty or hesitation, create content for each stage of the buyer's journey (awareness, consideration, and decision).
Make the most out of this year’s holiday shopping season
- Foster meaningful experiences with shoppers: Less is always more – promotions should be strategic and provide shoppers with a strong value instead of promotion overload.
- Combat promotion fatigue: Target channels with shoppers in the decision phase and actively seeking discounts.
Ultimately, brands must have a strong story to highlight how they can provide meaningful value in shoppers' lives this holiday season. Our media, performance, and platforms teams can ensure that we are considering all meaningful data points to make smart decisions about where to place messaging and which shoppers to target.
We have over 20 years of experience helping retail and consumer brands, merging storytelling + technology to make the most of the holiday season.
Learn from our experts in our 2022 fireside chat that shares more about holiday shopping behavior and what retailers can expect moving forward.
