The holiday season typically drives fourth quarter retail revenues to be the best of the year. However, many brands and retailers are feeling uncertain about just how much of a bounce the final months of 2022 will bring. Could concerns over rising inflation and the increasing cost of living cause shoppers to spend less? If so, are there ways retailers can soften the blow, while still protecting their profit margins?
Sitecore’s 2nd annual Holiday Shopping Trends Report
For answers to those questions, Sitecore recently surveyed consumers around the globe about their planned spending habits for the upcoming holidays. The results show that, indeed, affordability is top of mind for consumers this year. In addition, we found that many holiday shoppers are cutting back and reorienting their priorities, pointing toward steps retailers can take to respond effectively to shifting consumer behaviors and preferences.
Here is just a small sampling of the key findings in our 2nd Annual Holiday Shopping Trends Report:
Consumers are concerned about affordability. About one-quarter of the Americans we polled (22%) said they will spend less on gifts this holiday season. Two-in-five from the UK said that not being able to afford Christmas this year could likely ruin the festive season altogether.
In response to tight budgets, shoppers are shifting their priorities. Most of those surveyed in France (72%) reported that they will only buy gifts for the kids this year. In the US, younger shoppers said they are getting creative and even giving up things they can live without – like Netflix (30% Gen Z; 21% Millennials) or eating out (40% Gen Z; 42% Millennials). About one-in-five of those we polled said they will sell possessions (15%), re-gift a present (17%) or take on another job or more hours at work (17%) to afford holiday shopping this year.
Even so, some items remain on the “must have” list. Respondents to our survey in the UK shared that they won’t compromise on certain holiday items. These “must haves” include gifts for their own children (58%), alcohol (47%), a turkey (44%) and spending time with family (44%).
Consumers prefer to shop online. Despite eased restrictions on in-person shopping, just one-in-four survey participants in the US (22%) plan to shop in-store. Instead, they said they prefer to shop online mostly because of convenience and the lure of a good deal. And if prices are competitive, these shoppers said they will prioritize “mindful shopping” by purchasing American-made products (71%), shopping with small businesses (74%) and Black- or minority-owned businesses (71%).
Opportunities for brands and marketers
Sitecore’s findings are a wake-up call for marketers and brands that are launching and optimizing their holiday campaigns. They underscore how critical it has become to create personalized content, offers and experiences that engage customers and earn their trust, especially during this acute financial crisis.
Of course, it’s also important to price products to reflect economic pressures and to continue adapting to evolving consumer preferences. For instance, even though online shopping continues to dominate, Christmas really is an omnichannel experience and retailers need to ensure the customer journey is integrated both online and in stores. To that end, our research found that one-in-four shoppers would appreciate extended opening hours to dodge the crowds and that making more online delivery slots available would also help.
Sitecore commissioned this research for the second year running to provide brands and retailers information about consumer attitudes ahead of the holiday season so they can better prepare for the Golden Quarter.
For additional insights about consumer spending trends, download the full reports and learn more: