The 2022 holiday season has all but arrived. Everyone across retail and ecommerce is looking at surveys and market analyses to uncover just what to expect this season. The common theme? Nobody is quite sure what lies ahead.
On one side, there are positive indications that point to a successful holiday season. There has been momentum in consumer spending (the Personal Consumption Expenditures Index rose 0.4% MoM in August after a 0.2% decline in July), we’ve seen wage increases, and growing customer confidence. However, on the other side, those same positive signs act as indicators for Feds to continually raise rates in hopes of slowing consumer spending. The synopsis is that although US holiday sales are expected to rise 4% to 7%, much of that growth is going to be driven by inflation rather than increased sales volume.
Growth or not, the holiday season can account for upwards of 40% of a company’s annual sales. It’s necessary for manufacturers to prepare to capture as much volume over the period as possible. This article will look not only at what 2022 holiday predictions are, but also how brands can best position themselves given the expectations.
Shoppers Will Prioritize Ecommerce for the 2022 Holiday Season
Consumers are looking for deals this season, and the best place to find them is online. A report by Deloitte estimates ecommerce growth of between 12.8% and 14.3%, far outpacing the growth of in-store holiday shopping.
Further, AlixPartners found that only 56% of holiday shoppers plan to visit a physical store to browse merchandise this season, down from the same survey’s results last year (and down from 80% in the firm’s survey in 2018).
As more shoppers browse online, more manufacturers should be asking how easily they can be found there. Spreetail’s custom, multi-marketplace strategy gets more eyes on your products by selling across 15+ marketplaces including Amazon, Walmart, Target, and more. Manufacturers should eagerly pursue a presence on any relevant sales channels in order to capture as many customers as possible.
Being active online does not necessarily mean that your products will be found online, especially among the added competition brought on by the holidays. Unless your products are already category leaders, earning top sales rank, you need to advertise and offer deals if your brand relies on holiday sales volume.
RetailDive reported that “41% [of consumers] are looking for coupons, discounts and sales, 40% will buy fewer things and 21% will opt for cheaper brands, Bankrate found. Large majorities are choosing where to shop based on free shipping (67%), deals or promotions (66%) and value for the price (58%), according to Creatopy.”
It may be tempting for manufacturers to offer deals on excess inventory, which many still have on hand. However, to create true value and earn new loyal customers, brands need to discount top sellers over a wide product assortment. If you’re going to compete for holiday shoppers, the only way to do it is to go all in. Read more about advertising strategy for retailer sales events in BuyBoxExpert’s recent series: The Prime Day Paradox.
Dining Out and Travel Top the List of Consumer Cutbacks
There is more good news for product manufacturers. Dining out (46% of consumers) and travel (44%) top the list of consumer’s planned cutbacks. Nearly a quarter (23%) do not expect to cut back at all. The study from Numerator is evidence that economic worries may be lessening.
Brands are armed with information on planned cutbacks, but what to do about it? Use the data to inform your holiday strategy. If you produce Home or Garden supplies, the 23% planned cutback may be a small enough percentage that you go all-in on your holiday promotional plan. However, if you sell Electronics, a 42% cutback may tell you to save your advertising budget as it may not end up being profitable.
Category predictions are, of course, only one data point that should be considered when informing your total holiday sales strategy. The 2022 holiday season is set to be a transitionary year as we distance ourselves from ecommerce's pandemic-inflated highs of 2020 and 2021 and settle into what may finally be the new normal come 2023.
Spreetail is an ecommerce growth partner focused on accelerating brands and channels to compete for tomorrow’s ecommerce customer. Our ecommerce experts purchase products from world-class manufacturers, list these top brands on marketplace giants such as Amazon, Walmart, Target, and eBay, and fulfill orders with next-day speed. Our completely home-grown software helps us provide unmatched value to our brand partners, channel partners, and the millions of customers we delight in the US and beyond. Get in touch by completing the form below.