Christmas lights are coming out, Starbucks has rolled out its holiday menu, and shoppers are heading to the stores to begin (or wrap up) their Christmas shopping. With rising inflation as we round out the year, it appears to many that holiday spending may be in for a hit.
The 2022 holiday season will be defined by shifting priorities as many consumers navigate higher prices. What we’ve learned however, is that even with raising prices consumers are not stepping away from their holiday spending. Despite fears of inflation and the rising costs of transportation and utilities, 74% of consumers plan to spend the same or more this holiday season in comparison to past years.
We’re analyzing the holiday spend insights courtesy of major accounting firms, PwC and Deloitte, to help your ecommerce business set expectations for buying and spending when heading into the final weeks of the holiday shopping season.
Holiday Spending Stats for December
In spite of the changing economy, it appears rising prices aren’t stopping the average holiday shopper. This year, 35% of shoppers plan to spend more than they did last year, with these big spenders skewing male and living in major metropolitan areas. Overall, stats show that the average shopper will spend about $1,430 on gifts, travel and entertainment this year, only about $10 less than the year prior. This number is up 20% from 2020 and roughly 10% from 2019.
It should come as no surprise that higher-income households will hold the greatest amount of purchasing power this holiday season. Although holiday budgets have remained relatively the same in the past few years, those with $120,000 and above in household income are estimated to be increasing spending by nearly 15% this holiday season.
As higher-income households begin spending more, inflation-weary households are holding out for the best deals. In 2022, 65% of buyers said price ranks highest among the top three factors influencing their holiday spending. 74% of shoppers are waiting for the best deals before they begin their holiday shopping, meaning a mass influx in holiday shoppers should be hitting the market in November and December. Keep your business prepped and ready for this increase in online shoppers!
Buying and Paying Trends for 2022
We’ve all been subject to the popularity and ease of online shopping across all major platforms. Although online shopping has made a massive name for itself in the past few years (we’re looking at you Amazon!), in-store shopping is still holding its own.
Nothing compares to the in-person holiday sparkle, with Christmas lights, in-store deals, and holiday cheer from other shoppers. This year, it appears that roughly 57% of consumers will do their shopping online, while 43% will be heading to the stores for their share of Christmas cheer.
Along with this, as contactless payment methods begin to proliferate, the top payment option is debit cards, most likely for ease and tracking ability when it comes to spending. Credit cards and cash round out the list.
Buy now, pay later platforms like Afterpay and Affirm are gaining ground in today’s financial climate, from 5% of consumers using them in 2021 to 13% in 2022. As a business, offering an after pay method may benefit ecommerce storefronts looking to target a new audience of buyers.
Consumer Wants and Needs
Customers are looking for the easiest path to purchase and the most timely deliveries. Many online shops are prioritizing their customer experience to prepare for the holiday shopping increase. Developing and updating the online purchase funnel and improving websites for mobile use is key to improving the buyer experience. Research shows 29% of young millennials (ages 26-30) will shop via their smartphone this holiday season, compared with 22% for all age groups.
Home delivery, a popular option for the online shopper, continues to improve, with consumers demanding more options, greater tracking abilities, and faster delivery speeds. When consumers decide between online ecommerce stores, they’re often looking for shops that offer proof of delivery, real-time tracking, and flexibility on timing.
But it’s not just about meeting consumers where they are this holiday season! Consumers want to support brands that meet their personal values. Brand trust is something that many customers are looking for this holiday season, with 93% of consumers stating that trust is top of mind when shopping, a 70% increase from prior to the pandemic.
Almost 60% of consumers, meanwhile, state brand trust is important when considering holiday buying options, looking for relatable brands that reflect personal values in relation to sustainability and purpose. Local brands have a tendency to be more supported by consumers, and environmentally-friendly businesses tend to make a large profit in comparison to companies with no environmental values. Better yet, 88% of customers said when a company earns their trust, they also earn a recommendation to friends and family.
Current Economy Christmas Blues
Every holiday season since 2020 is fraught with political crises, health concerns, and economic downturns it seems. These major developments every holiday season has left many consumers scaling back on their purchasing habits and causes small businesses to strategically scale their stocking and fulfillment needs. Unfortunately, this year is no different.
More than half of all consumers (53%) are concerned about inflation, but with signs pointing towards decreases in pricing nationally, consumer sentiment is slowly beginning to rise. If the labor market remains strong and steady, we could see an uptick in spending this year as we approach 2023.
As stated earlier, high-income households still hold much of the purchasing power throughout the holiday season. Despite this, many lower- and middle-income households are not skipping out on holiday purchases as they approach the season of giving. Bargain-hunting and holiday deals are going to be a hit this year with this targeted group, and most of their shopping will occur after Thanksgiving.
Consumer Insights for YOUR Business
It’s important as an ecommerce business to understand your consumers and develop a strong grasp on your buyer personas going into the holiday season. Your business needs to respond with agility to any changes in the economy in the coming weeks, along with shifts in your consumer’s sentiment. It’s not always about offering the best deals, it’s about meeting your customers where they are and building brand trust throughout the intense buying season.
Meeting your customers expectations is key to spreading holiday cheer. Make sure you’re stocked up on all holiday inventory, avoiding stockouts and inventory shortages when your customers are in need of them most. Use analytics to actively adjust your stock for this upcoming holiday season, while also working with stats on sales volumes that could vary depending on customer segments and geographic regions.
Your Holiday Logistics Hub
From product stocking to fulfillment, two-day delivery to custom packaging, Saltbox wants to be your home for holiday shipping. Investing in a 3PL that has your business and consumers in mind is key to building out your best holiday sales plan and starting the new year with your best foot forward. Saltbox provides comprehensive logistics support in a community-focused workplace, the perfect Christmas workshop for all of your shipping and fulfillment needs.
Your business is about to make a massive impact with the right support team around the nation to adapt your ecommerce business through the highs and lows of the holiday season. Whether it's a flexible workspace customized to your small business, fulfillment services tailored to your product needs or extra hands ready to support, Saltbox is here to help. Book a tour at a nearby location and let’s get started meeting your business goals!
Saltbox wants to grow your small business with you. Offering the key fulfillment services all businesses require across a wide variety of locations, Saltbox benefits your growing business by focusing on business needs that many 3PL services overlook.
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