The most wonderful time of the year is around the corner. For most retailers, end-of-year holiday sales account for a major share of their annual sales and revenue. In the US, retail holiday sales are forecasted to rise 3.3% to USD 1.262 trillion according to eMarketer. E-commerce holiday sales are expected to grow 15.5% to reach USD 236 billion this year.
Despite a 40-year high inflation rate, new data shows that shoppers are still spending, albeit at a slower pace and more strategically. Consumer confidence is higher than earlier this year, but still declining thanks to persistent inflation. Amid inflation and supply chain disruptions, the retail industry will need continuous data-driven insights for a successful holiday season.
To help you effectively strategize your efforts for maximum ROI, here are the top five holiday shopper trends dictating purchase behaviors every retailer should know:
1. Shoppers plan to start their holiday purchases earlier to avoid price hikes and receive deliveries on time
42% more customers worldwide and 37% more in the United States expect to start buying gifts sooner, the number one behavioral shift this holiday season according to Salesforce. Given the current economic volatility and fuel surges, shoppers are less likely to wait until major holiday sales events like Black Friday Cyber Monday (BFCM).
While this trend has been around for the past couple of pandemic-stricken years, the key driver then was majorly inventory concerns and the battle to get their purchases delivered on time. This year, however, it’s inflation and rising gas prices that are fuelling early purchases.
Tip for retailers:
Early promotions will help to both attract early-bird shoppers and avoid peak season parcel caps along with impending shipping cost hikes. This way, the early shopping trend can be a win-win for both shoppers and retailers.
2. Cash-strapped shoppers will let necessity and value take over brand loyalty
Recent research from Neilsen IQ states that necessity will be a significant holiday shopper trend driving purchases this year, as consumers become more discerning about their product decisions. Also, shoppers across the US are actively looking for discounts, with many hardly thinking twice before turning to private label products.
Sales have significantly increased quarter after quarter, with the US private label market share reaching 18.6%—a staggering 12% gain. Harping on this trend, big-box retailers like Target and Walmart slashed their quarterly and annual forecasts to clear off excess inventory much to the surprise of many.
Tip for retailers:
Knowing what else your shoppers would prefer in case a product runs out of stock or is beyond their budget and how to strategically promote it, would help retail and e-commerce businesses convert better. To garner and sustain customer loyalty businesses would do well to retarget buyers with exclusive deals that inspire repeat purchases.
3. NFT purchases will grow popular
Between November and December, shoppers are estimated to buy NFTs from merchants, amounting to USD 54 million market value, according to Salesforce. Though in their nascency NFTs are gaining steam as an exciting holiday shopper trend given their unique and exclusivity quotient in the digital realm. Experts say NFT investments are increasingly being perceived as saving bonds the value of which is anticipated to grow over time.
Tip for retailers:
For those eager to offer something innovative this holiday season, NFTs provide the chance to generate excitement and brand interest through exclusive access to items or collections, presales, and new product releases, all this while forging strong community ties. A good case in point comes from Tiffany & Co. The jewelry brand is now selling NFTiffs designed to emulate the CryptoPunk NFT avatar of the necklace that is purchased.
4. Mobile commerce and impulse buys are slated to drive a good share of holiday purchases
Consumers in the United States are growing innately comfortable browsing and purchasing on their smartphones. In 2021, US online consumers used their mobile device to make purchases (80%), explore and study products (52%), check pricing (45%), and read ratings and reviews (31%) over Thanksgiving weekend according to Bizrate Insights.
In an August Ipsos research, more than a third (34%) of those who made an impulse purchase online cited the price being too good to pass up as the reason. Another 34% said they wanted to treat themselves. Those purchases could be part of a phenomenon known as “the Lipstick effect.” The concept implies that customers desire to reward themselves, especially during difficult circumstances, but choose small indulgences over extravagant ones.
Tip for retailers:
Mobile commerce should be integral to your peak season strategy. Everything from your website, product catalog, and customer support should be easily accessible via smartphones and user-friendly. It pays to constantly assess and test your mobile shopping experience as many rely on it to fulfill their last-minute shopping or gifting needs.
5. Livestream will steal the limelight
The recent Amazon Live Prime Day livestreams received over 100 million views, according to the company. The marketplace also used livestreaming as an advance promotional tool for Prime Day, showcasing early deals from celebrities and influencers on Amazon Live.
Moreover, a recent study by Sprout Social states a fact that might just be a holiday shopper trend. 61% of surveyed US consumers watch livestreams and 53% want to watch them more this year. In addition, 35% of respondents said they comment or engage in livestreams. Livestream shopping is a great enabler for categories like Apparel and fashion, beauty, fresh food, and consumer electronics. With social commerce taking on the reins livestreams serve as an attractive way for shoppers to see products in action and make confident decisions without stepping out of their comfort zones.
Tip for retailers:
Employ multi-channel livestreaming using various formats to reach different audiences across select product categories. If possible, integrate livestreaming into your own e-commerce website or app to “own” the customer.
All in all, success will come to retailers who have their ears to the ground constantly analyzing evolving consumer holiday habits, adjusting prices and taking stock of inventory based on market developments, and maneuvering marketing efforts to maximize their consumer wallet share. Each of these aspects demands a consistent stream of the latest consumer and market data and insights to drive well-informed holiday decisions.
Leading brands and retailers have been partnering with Netscribes for over two decades to meet their global market and consumer intelligence needs. Contact us to see how we can help you meet and surpass your business and sales goals this peak season and beyond.
