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What Will Holiday Shopping Look Like for 2023?
According to the 2023 Holiday Shopping Trends Report commissioned by Celigo, an integration-driven automation company, survey respondents expect a better shopping experience during the 2023 holiday season compared to past years. This seems hopeful during a time when “price-consciousness has become a defining characteristic of consumer behavior.”
As reported by Celigo, “An overwhelming majority of consumers are setting budget limitations on their holiday shopping.” Almost 80% of those surveyed said they plan to spend less than $5,000 this year, while 49% said they’re hoping to spend under $1,000. Even though many shoppers seem “committed to strict financial prudence and responsible budget management, there remains a subset willing to spend moderately on meaningful gifts and experiences.”
It’s crucial for retailers to assess the shifting trends and respond to them accordingly in order to attract and retain shoppers during the peak holiday season. One way they can do this is by offering products that consider different budget preferences and delivering a “seamless shopping experience.”
Businesses can also plan in advance to avoid issues related to stock availability, pricing, and delivery. According to the holiday trends report, “45% of survey respondents indicated that they were most frustrated by increased costs for in-demand products and limited stock.” Additionally, “44% of consumers stated they were unhappy with the frequency of late deliveries for their merchandise during the holidays.”
By assessing current operations and coming up with creative strategies to overcome potential holiday challenges, retailers can ensure their customers have positive experiences and thereby increase loyalty, retention, and customer lifetime value.
Just like Halloween shopping, it seems holiday shopping will begin earlier than ever this year. According to Insider Intelligence, “Half of consumers (50%) expect to start their holiday shopping before the calendar turns to November.”
Celigo’s survey shows similar findings, stating that around half of consumers plan to start shopping as early as September. Also, 26% of consumers said that Cyber Monday won’t have an impact on their gift shopping. “The days of waiting for last-minute deals on Black Friday and Cyber Monday appear to be a thing of the past,” the report noted.
Convenience also remains a high priority for holiday shoppers this year. With e-commerce becoming a preference for many U.S. customers, the report states that “online is the #1 channel for holiday shopping with 75% of respondents stating that they will rely on it the most this season.” One reason is that people can “avoid the holiday rush” and the hassle of navigating through crowded stores.
Even though Celigo expects a better holiday season than in previous years, not everyone seems to agree with that prediction.
According to the latest CNBC Supply Chain Survey, this year is “shaping up to be a downbeat holiday spending season.” The survey’s “early read on peak season order activity shows retailers ordering less and expecting the consumer to be on the lookout for discounts and freebies to entice them to buy more.” CNBC also noted that 43% of respondents expect a lower peak season than last year, while 21% predict order levels to be the same.
Even with inflation at its lowest annual rate in over two years, 71% of CNBC’s survey respondents said they are “concerned the consumer will cut back on holiday spending in response to inflation.”
CNN also seems uncertain of how the holiday season will go, likely due to the “web of conflicting signals on the health of the economy.” According to CNN, Coresight Research predicts that 2023 holiday sales for October through December will “be up by just low single digits from a year ago.” This would be a lower increase than 2022, which saw sales rise by 5.3% per the National Retail Federation.
Only time will tell how this year will fare, but retailers need to be prepared. Mark Simon, VP of strategy at Celigo, hopes that the company’s survey data will help businesses gain better insights into what consumers want this holiday season. “Now, they can make the right investments to automate and streamline their e-commerce operations to meet these evolving expectations both now and in the future,” Simon told Business Wire.
Discussion Questions
Do the findings from Celigo’s report indicate a shift in consumer behavior compared to past years? Do you think this holiday season will be better or worse than previous years, and how will inflation play a role?
Poll
Loading …BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Melissa Minkow
Director, Retail Strategy, CI&T
Unfortunately, a number of unfavorable factors are coming together to put a bit of a dampener on the holidays: the resumption of student loan repayments, higher interest rates, rising debt levels, continued inflation, the dwindling down of excess savings from the pandemic, and so forth. This certainly doesn’t mean the holidays will be a disaster, but does mean more modest growth, a frugal mindset, a bargain hunting consumer, and a polarized performance between retailers. Consumers will also start shopping earlier to spread the cost.
Consumers seem more optimistic and savvier this year. They’re prepared for early online deals.
Supply chains are more aligned for speed and availability, which will boost holiday sales. Starting sales promotions earlier benefits retailers, brands and consumers.
The trifecta of higher debt levels, higher prices and resumption of student loan repayments add up to a scenario that make it difficult to be cheerful about robust comps. The pool of discetionary dollars seems to be shrinking. Smart retailers will have been cautious about inventories for Q4 2023 and early 2024. Maybe it’s time to be as concerned about margins as knocking it out of the park on sales.
I tend to agree with the contrary arguments noted in the article & by fellow BrainTrust members. However, the potential game changer could be Amazon’s Prime October days. The extent of its success, as well as competitive responses, may coax out spending that might have been more constrained in these economic times.
I still think we’ll see modest growth this season. I know there’s many variables at stake threatening sales, but consumers are now adjusted to inflation, and I just don’t see a desire for gifting dwindling altogether.
I think it’s going to be a rough holiday season. The perception of the US economy (apart from reality) and households battered by debt (of all kinds) inflation, and a trend tpwarrd spending on experiences are all factors. The total spend may increase a bit from last year but I ascribe that to continued inflationary prices.
I think that a great deal of shopping is going to happen:
*On super-discount eCommerce sites (Like Temu)
*At Walmart and Target
*Through social commerce offering “deals”
This year’s holiday season will likely be mixed. Higher-income households have benefited from another strong stock market year to date versus a much worse year last year and may spend a bit more this year. However, a majority of households have been hit hard by inflation and may also be impacted by the resumption of student loan payments.
To be prepared and generate seasonal success, ongoing research is needed. It is best to know your customers’ economic sentiment and gain an early understanding of how they have been trending with their purchases and what is in their sights for the upcoming holiday season.
Inflation and economic issues will dampen what is already predicted to be a good season for retailers, however, if it were not for the economy, the holiday season would even look better. Still, I like the predictions – and they may even be a little understated. The holiday shopping season is upon us. Just this past I noticed artificial Christmas trees and other decorations being displayed at major retailers. The runway is longer, giving consumers a chance to spread out their purchases.
Overall this is a poor view of consumer sentiment, since it ignores several of the largest issues impacting retail, including the impact of the pandemic and the positive control that rising interest rates have had on inflation over the last 18 months. These have had a tremendous impact on consumer sentiment and will continue to have a positive force on consumer spending in the next year.
Celigo’s report reinforces a lot of the shifts we’ve seen in consumer shopping behavior throughout the past few years, including an emphasis on a seamless shopping experience. Headed into this year’s holiday season I think there’s a bit of a tone of uncertainty. Amazon’s July Prime Days showed that, while the drive to shop is still there, consumers are more mindful of their overall budgets and spending amidst inflation. As a result, any disconnect in the shopping journey can result in a lost sale. Retailers will need to be mindful of this as they plan their holiday promotions and deals, putting the right products and deals in front of the audiences while also up-leveling their omnichannel experiences.
The one truth in consumer behavior is that it’s always shifting; everything else is speculation.
Even though most are planning to shop early, I believe consumers are also braced for the potential for everything to change in a moments notice. Therefore, spending will be conservative but indulgent across a select few things or experiences.
The summer season showed us that consumers this year are resilient and still engaging in discretionary spending. Despite inflation and high interest rates making consumers more budget-conscious, retailers can expect the holiday shopping season to be strong. I predict that there will be more discounts offered this year compared to prior years, especially in industries like fashion that have a lot of inventory.