Five Retail Trends for the 2022 Holiday Season (and How to Respond)

November 11, 2022

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The last few years have brought consumers and retailers nothing but whiplash when it comes to holiday trends, and 2022 is no different. After the locked-down holiday season of 2020 and the supply chain maladies last year, U.S. consumers in 2022 are looking to get back out into the world, both in-store and online to find their holiday gifts. But there are new challenges and trends facing the retail industry. Holiday shoppers are looking to stretch their already-stressed budgets. Here are five holiday shopping trends you can expect during the run-up to Hanukah, Christmas, and the New Year, and ways to use them to drive sales growth as you prepare for the holiday season.

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Consumers, suppliers, and retailers are all fighting inflationary pressure

What is this holiday trend?

The U.S. Bureau of Labor Statistics reports that the current Consumer Price Index is at 7.7% for all items. That means prices on food, fuel, and everything else are, on average, nearly 8% higher than they were a year ago. Nearly all consumer trends this holiday season are downstream from this fact.

That level of inflation affects every single part of running a small business, as you very well know. It costs more for small business owners to buy inventory, ship goods, pay a debt, and compensate employees. 

The greatest inflationary cost is in energy, specifically. Prices for energy are up over 17% year-over-year, so if your company involves a significant amount of travel you may be feeling an even greater pinch. 

Naturally, businesses pass these increased prices onto customers, who are also facing increased prices in every aspect of their lives. So the first major trend to keep an eye on this holiday season is the fact that everyone is paying more for everything, everywhere.

How can my company respond?

When it comes to handling inflationary pressure, there are a few moves your company can make, though none of them are particularly pleasant. 

First, you may need to find ways to bring costs down in order to reallocate financial resources into the areas of your company most affected by inflation. You may find yourself overstaffed or with excess inventory. Maybe you don’t hire your usual extra hands for the holidays and instead use that money to counteract increased interest payments on your existing debt. 

You may also consider taking out some form of additional funding, even if your credit isn’t ideal. The holidays are no time to find yourself without sufficient working capital, so even a small loan or alternate source of funding can help make sure you’re able to make payments and take advantage of unexpected opportunities.

Next, remember that your customers are also feeling the pinch. Finding ways of making their holiday shopping more pleasant and economically feasible can lead to increased sales and a positive experience that creates returning consumers and great word of mouth. Can you work with a supplier to bring costs down on a popular product and pass those savings onto your customers? Can you offer bundles that lower margins, but also move inventory out the door while creating value for shoppers?

Everyone’s battling inflation this holiday season. Empathize with your customers, and they’ll thank you for it in kind.

Supply Chain Issues Still Exist

What is this holiday trend?

While it likely won’t cause the same shipping issues that have plagued shoppers and U.S. retail businesses over the last few years, there are still likely to be issues creating delays with suppliers as 2022 comes to a close. 

In 2021, Adobe reported that “Out of Stock” messages were up 172% over pre-pandemic levels, and while 2022 shouldn’t feature such an outlandish degree of stock issues, there are still concerns. The aforementioned levels of inflation, along with labor shortages and international events like a war in Ukraine, have created an environment of uncertainty for retail suppliers. 

The best way to predict the future is to look at the past, and the truth of the moment is that this current moment is unpredictable due to turbulent economics, the fading of the pandemic, and changing consumer habits. Some retailers may find themselves with low inventory, while others may find themselves with overstock due to aggressive inventory strategy. 

How can my company respond?

Uncertain supply chains and shipping times can create a few opportunities for small businesses, and many of these opportunities involve putting real thought into how you can make life easier for your customers. 

Many businesses are now using systems where customers are able to pick up merchandise curbside. It’s a best-of-both-worlds situation: the customer gets the reassurance of buying an item they know is in stock while also not having to pay for shipping (growing more expensive due to inflation) or going into a physical store. 

On top of that, you’ll want to pay particular attention to inventory levels this holiday season, as holiday forecasts may be less accurate due to international uncertainty. If you’re still avoiding using updated inventory management software, now is the time to get in the game. Using finely-tuned software to make sure you know how much stock you’ve got, what’s selling, and when you need to re-up your supply can help mitigate the uncertainty.

Another strategy is to take advantage of gift cards. Many shoppers use gift cards as their main form of gift-giving, and when times are uncertain, that can be helpful for both consumers and retailers. Offering a discount or promotion on gift cards makes it easier to keep inventory on your shelves while also driving sales and ensuring that you’ll have traffic down the line when shipping is hopefully more predictable.

Finally, you can use your older stock as an opportunity. Maybe you’ve got product from last season, or stock that’s been proven to be less popular. Creating bundles or steep discounts on such products creates a savings opportunity for your customers while also freeing up valuable working capital. It also ensures that you’ve got an eye-catching offer available even if the global supply chain causes delays or price increases on your most popular offers.

Black Friday still matters

What is this trend?

  • Black Friday, or the Friday directly after Thanksgiving, is in many ways the center of the holiday shopping season. Most retailers offer steep discounts and limited-time holiday retail sales, and consumers make plans with friends or family to get out and take advantage.

    Then, e-commerce retailers have gotten in on the action by adding additional days to the post-Thanksgiving holiday spending. Cyber Monday, the Monday directly following Thanksgiving, has become a sort of online Black Friday. And many retailers extend those savings throughout the week.

How can my company respond?

Take part. If you’re operating an e-commerce store, take solace in the fact that 2021 e-commerce sales were up 11% over 2020’s

Remember, inflation is likely to be the key to most consumer behaviors this winter. Offering discounts and promotional deals where they’re feasible and expected is part of making the season work for your customers.

Consumers are Spreading Out the Shopping

What is this trend?

But on top of just the big shopping holidays, consumers are also expected to spread the holiday shopping out this year.

Part of that is inflation. If everything in life is much more expensive, it can become financially difficult if not outright impossible to make all of the necessary purchases at once. Gone are the days when you can do all of your holiday shopping on Black Friday. Instead, shoppers have started their shopping earlier and earlier.

According to a consumer survey from the National Retail Federation, the world’s largest retail trade association, retailers are moving up the start of their annual discount season in response to inflationary pressure and supply chain issues. 44% of surveyed shoppers have started making holiday purchases as early as late September and October in response.

It makes sense. If you’re worried that uncertain economic winds will make shipping and pricing difficult in the five weeks between Thanksgiving and the New Year, why not add more weeks to the season in order to spread out your shipping? And for shoppers, doling out a little bit of shopping income over the course of more time means greater cash flow over the entire period.

How can my company respond?

Start now. Note that even retail giant Amazon moved one of its Prime Day events into mid-October hoping to take advantage of consumers’ desire to spread out their shopping.

There’s no reason to wait until Black Friday to get deals in front of your customers. Get your inventory in the door, and make sure your customers know that they can get those discounts they’re expecting as soon as you possibly can.

Customers are looking for businesses to make their lives easier

What is this trend?

Coming out of a years-long pandemic, faced with high inflation… your customers are looking for any way you can make their lives easier. A streamlined, low-friction customer experience is essential for retailers in the upcoming holiday season. We’ve discussed a few ways you can do so: bundling items, offering discounts, and even allowing curbside pickup. While these are a great start, there are numerous ways to simplify the experience for your customers and make sure that you’re taking the stress out of holiday shopping when you can.

How can my company respond?

Everything from your marketing to your POS system has ways of making life easier for your customers. 

Social media platforms like Instagram and TikTok both offer on-platform shopping, for example. Instead of seeing a deal they’re interested in and having to navigate to your site on a separate app, you can allow customers to make their purchases with only a slight pause in their scrolling. This is also an example of meeting your customers where they are: a huge portion of Gen Z and millennial consumers use TikTok daily, according to Statista. Incorporating their in-platform shopping capabilities should be an essential part of any holiday marketing strategy.

On top of simplifying shoppers’ lives by meeting them where they are, your POS system can ensure omnichannel consistency for pricing, discounts, and inventory. By making sure that your inventory systems are up-to-date and offering the same bundles and discounts, you’re ensuring that customers have no confusion during their shopping experience. 

You can also hire an appropriate number of seasonal workers. No matter if your business is focused on an in-person shopping experience or built entirely online, sufficient staffing means that customers don’t have to wait for shipping, seek out help in the store, or go without customer service via an online portal.

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