Overall, U.S. retail sales will see a modest rise this holiday season over last year’s. Major outlets project nominal single-digit growth, though specific percentages vary depending on the source. Deloitte, for example, estimates between 4% and 6% growth, Mastercard anticipates 7.1% and the National Retail Federation between 6% and 8%.
How does this growth translate in terms of shopper behaviors, though? Let’s take a look.
7 Top Holiday Consumer Trends for 2022
With consumer sentiments and behaviors everchanging, here are a few retail forecasts that’ll lead the way this year.
1. Buyers Are Shopping Earlier
No longer is Black Friday the unofficial start to the holiday shopping season. Instead, one undeniable 2022 holiday trend in consumer demand is early shopping.
Despite inflation rearing its ugly head, consumers have been ready and eager to shop in preparation for this holiday season, many having started their shopping as early as August, September and October. And they aren’t just shopping for others – more people are planning to spend on themselves too.
Rising costs as well as concerns about supply chain issues and product availability are driving factors in earlier shopping.
According to a 2022 report by McKinsey & Company, 56% of U.S. consumers began shopping in October this year vs. 45% in October last year. What’s more, shopping in November dropped from 42% to 35% from one year to the next. Additionally, 39% are shopping earlier in order to spread purchases over a few months.
2. Price and Value Are Key
With costs increasing, many consumers are wincing with each checkout experience. In response, they’re becoming more conscious about what they buy and how much they spend. Moreover, they’re looking for more value now than in previous years.
Some strategies buyers are carrying out this holiday shopping season?
- Using coupons
- Shopping at big-box retailers
- Comparing prices before buying
- Buying different brands for lower prices
- Reviewing promotional emails for savings
- Waiting for after-holiday sales
3. Foot Traffic Is Up
With pandemic restrictions in the rearview and public health concerns at bay, people are getting out of their homes faster than they did last year. Not surprisingly, more consumers are shopping in stores. Indeed, McKinsey & Company’s consumer survey found 42% of shoppers in the U.S. are browsing in person this year versus 37% last year.
4. Consumer Services Are on the Rise
As more people feel comfortable traveling and are keen to do so, an increase in consumer services, particularly related to travel, is another 2022 holiday shopping trend to watch. Indeed, reports indicate sales are expected to rise at restaurants, airlines and hotels.
According to this year’s Mastercard Spending Pulse, which measures in-store and online retail sales, as of September 2022, airline ticket sales were up approximately 56% from a year ago. Additionally, lodging sales were up 38.1% year over year.
5. Essential Goods Are Taking Priority
Essential items, such as food and drink, are taking up a good amount of consumers’ income these days. With increased travel for holiday gatherings this year, these goods will take even more precedence for many. Specifically, 27% of shoppers expect to spend more in this category, according to McKinsey & Company. In contrast, spending on certain nonessential items, such as toys, accessories and cosmetics, is expected to decrease.
6. Buyers Are Shopping on Social Media
According to Intelligence Node, 48% of consumers are likely to buy items directly on Instagram and TikTok. That said, many people, including 74% of Gen Z shoppers, still prefer to complete their purchase on a brand’s site rather than on a social channel, according to SimplicityDX’s State of Social Commerce 2022 report. Even so, social remains a top channel for holiday gift ideas.
7. Customer Experience Is Important
Buyers place a premium on hassle-free experiences, especially during the rush of the holiday season. This applies in store and online. With that in mind, prioritize ease of use and create an experience that delights your shoppers.
Customers may be looking for improved technology, such as omnichannel and personalization (e.g., recommend products based on past purchases, personalize promotional efforts and show dynamic website content tailored to the user).
How Companies Can Make the Most of This Year’s Holiday Shopping Trends
As a retailer, not only do you want to provide a great customer experience but you also want to turn a profit. Here are a few ways to make the most of consumer spending trends this holiday season.
Focus on Promotions
Concentrate your efforts on creating a holiday promotional strategy that markets value. This could mean appealing to price-conscious shoppers or incentivizing customers with special reward offers that provide value.
These could include:
- Free shipping
- Free item with purchase
- Percentage discount on certain items
- Percentage discount after certain dollar amount spent
Enhance Social Media Efforts
If you haven’t already, think about how you can step up your social media presence. Consider employing influencers to market your brand. Also, think about selling your products on social or hosting livestream shopping events.
Offer a Price-Match Guarantee
Amid rising inflation, a price-match guarantee is one way to ease the minds of cost-conscious customers. For instance, Target is offering a price-match guarantee this holiday season from Oct. 6, 2022, through Dec. 24, 2022. Customers have 14 days from the purchase date to take advantage of the offer. The price-match can be a lower price on Target.com vs. in the store or a lower price offered through a competitor.
Allow In-Store Pickup
One of the building blocks of good customer service is convenience and flexibility. A way to offer this to your customers is by allowing in-store or curbside pickup, an option 67% of surveyed customers prefer, according to an Invesp survey.
Keep in mind, offering a “buy online pickup in store” option isn’t just good for your customers; it’s good for business too. Ultimately, 75% of shoppers who use the feature are likely to buy again and 49% make additional purchases when they pick up their items in the store, according to the same survey.
Ensure Fast Shipping
Another convenience factor is expedited shipping. This is especially important around the holidays. Research your shipping options early on in the holiday season so you know what you can market to your customers. If you run an ecommerce store, you might even consider a dropshipping model.
Extend Your Return Period
Just for the holiday season, consider extending your return period. For instance, consider offering 30 days if you normally offer 14, or 60 if you typically offer 30. You can note this temporary policy with signage in your store or on your website home page. This can give reluctant customers peace of mind and confidence purchasing from you.
Retain Customer Loyalty After the Holiday Shopping Season
While you want to do your best to capture holiday traffic, do what you can to bring those shoppers back. Customer retention is a top way to increase sales after all, with current customers spending an average of 67% more than existing ones.