Consumer Behavior
3 experts share predictions for 2022 holiday retail sales season
With so much economic turmoil, and shoppers flowing back into stores, the 2022 holiday sales season is likely not to be typical in any manner.
September 29, 2022 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
As early as August the signs began arriving: Consumers will not likely be shopping in typical fashion this holiday sales season.
American are increasingly reducing costs, looking for additional ways to save and facing hard choices given the inflation economics and higher prices, according to a Forbes Advisor study of 2,000 U.S. consumers.
Nearly half of consumers, 48%, plan to shop early for this holiday season and the big reason is inflation, according to a Gartner Marketing survey. Of the 306 consumers polled in July, 28% plan to spend less this holiday season and just 10% plan to spend more than in past years.
Lots more consumers will be shopping e-commerce sites when it comes to holiday purchases this year with one annual forecast predicting growth to land between 12.8% and 14.3% compared to the same time frame in 2021. In comparison, holiday retail sales are projected to increase between 4% and 6% this year compared to 2021, according to Deloitte's retail and consumer products practice. In 2021, holiday sales grew by 15.1% in the same period.
A Radial report revealed 58% of consumers anticipate increasing the use of online stores this holiday season — an 8% increase in online shopping compared to last year.
"This holiday season, consumers may find themselves looking for ways to navigate the inflationary environment — from searching for deals to making trade offs that allow for extra room in their gift-giving budgets," Michelle Meyer, U.S. chief economist, Mastercard Economics Institute, said regarding the findings of this year's Mastercard Spending Pulse annual holiday forecast.
What experts predict
To get a beat on what's expected with the 2022 holiday sales season Retail Customer Experience reached out a few industry experts:
Manish Sinha
Special advisor to Wallaroo Labs and former CTO of global CPG brand L'Oréal, Manish Sinha is a member of the senior leadership team in IT for ANSYS, UBS, Yahoo! and Microsoft, and is on the board of directors of IoT company Adrich and blockchain company AIO Network.
Prediction: Online shopping will grow more than 15% compared to 2021. The pandemic has already taught consumers that they can shop online more conveniently. This year, seeking personalized products — not just convenience — will be a driving force behind a consumer choosing to buy directly from brands online instead of shopping at a mall. Consumers are expecting more personalization, or as we call it in the industry, hyperpersonalization. In makeup, for example, consumers want products that are personalized for their type of skin oil, skin tone, environment/weather and other such parameters. Or in softlines, a customer might want a customized purse fitting not just their personal style but also a specific event. To meet the demand for personalization, brands will need to better know their customers.
Prediction: D2C will generate customer data, but it's AI that will unlock personalization. By selling directly to consumers instead of third-parties, brands will gain deeper insights into who their customers are. But data on its own won't unlock incremental value for brands. Rather it will be how they use AI and machine learning to uncover patterns in purchases, predict what their customers will order and make recommendations, as well as offer more personalized services like catered shipping statuses. As CPGs see early success, they will shift the majority of their sales to D2C by 2025 instead of in-store.
Prediction: Retail and CPG companies will use AI to cut production to consumption time in half. Personalization will need to be timely if it is to be effective. That is, consumers will not wait months to get their perfect shade of lipstick and will substitute with a competitor if delivery of the product takes too long. CPGs and retailers will embrace AI to compress the entire development-to-production-to-consumption cycle in half. By using AI during production to gain a better sense of supplier risk and automate quality control, during distribution for route and picking path optimization and more, brands will be better prepared to deliver on changing consumer expectations.
Ryan Horn
SVP of marketing, at Simpli.fi
Prediction: I think retailers this season are being hyper-focused on return on ad spend (ROAS). They want to ensure that the dollars they are allocating to advertising pushes are coming back in the form of conversions i.e., sales and dollars in the door. This trend lends itself to a focus on attribution and reporting, as visibility into campaign performance will be critical in helping advertisers decide where to allocate dollars and how to optimize campaigns. Performance is important year-round, but especially in advertising spend for Q4.
Mark Ryski
Founder and CEO, HeadCount Corp.
Prediction: This will be one of the more uncertain holiday seasons in memory since it's the first post-pandemic. Shoppers are returning to stores, but lingering supply chain issues and still high inflation makes this year especially hard to predict. Additionally, many retailers are also challenged with finding and retaining frontline staff, which may impact sales. Overall, consumer demand remains relatively strong and that should be a setup for a robust holiday season. Retailers should play offensive.
About Judy Mottl
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