2018: With an economy firing on all cylinders, business boomed, and retailers celebrated as the average purchase amount per consumer reached a record high.
2019: Omnichannel shoppers browsing on one channel and buying on another had retailers hustling to create seamless experiences across physical and digital channels.
2020: Retailers’ adoption of integrated, omnichannel payment systems was accelerated as more consumers chose buy online, pickup in store (BOPIS), curbside pickup, websites, and apps to make their purchases.
2021: Retail shutdowns from the previous year had some consumers itching to return to brick-and-mortar, while others propelled the number of sales originating on mobile devices upwards by 40 percent.
2022: Retailers saw the biggest single online shopping day, Cyber Monday, reaching $11.3 billion in sales.
So, what’s in store for 2023? Here’s a breakdown of what industry analysts are forecasting.
Consumer Spending Trends for the 2023 Holiday Season
CNN Business writer Parija Kavilanz used the term “ho-hum holiday” to sum up this season’s holiday outlook. Economic uncertainty could result in consumers pulling back on holiday spending — so much so that Coresight Research has predicted “low single-digit growth” year over year.
However, small gains in the fourth quarter may not be solely from a down economy. The way consumers shop has changed, and so has when they begin their shopping. With consumers making purchases earlier each year, a “smearing effect” has resulted in holiday sales as consumers’ first purchase of the holiday season creeps into October and even September.
Additionally, despite the down economy and the fact that U.S. consumer credit card debt has topped $1 trillion for the first time in history, consumers are demonstrating that they still want to spend on both necessities and discretionary products. Pent-up gift spending will be a dynamic to watch, as consumers may have been focusing the last several months on only the essentials and have an itch to splurge when it comes to gift giving.
How Consumers Will Shop for Holiday Gifts in 2023
Another theme in the holiday outlook for 2023 is a trend toward a different shopping landscape. Some changes in how retailers will influence sales – and how consumers will buy gifts – include:
Salesforce predicts that generative and predictive AI will play a critical role in the online shopping experience. Already, 17 percent of consumers have leveraged Open AI’s ChatGPT for product research and inspiration, while another 10 percent are likely to use it to build shopping lists.
Brands should also consider ways to use generative AI to create hyper-personalized shopping experiences that will build loyalty and, ultimately, the bottom line.
- Social Media
In the first quarter of 2023, referrals from social platforms to e-commerce sites grew 27 percent. Even with a more complex shopping journey than ever before and consumers engaging with brands on an average of nine channels, Salesforce is predicting that social media will drive 10 times more online holiday shopping visits than other traditional marketing channels.
- Bargain Hunting
The holiday outlook anticipates that consumers will be cost-conscious with their spending. According to CNBC Supply Chain Survey in May of this year, 77 percent of consumers are planning on purchasing middle-price point items this holiday season. Only 17 percent anticipate buying high-end items, and more than half will focus primarily on promotional items. In fact, Brett Rose, CEO of United National Consumer Suppliers, stated that retailers “…need to capitalize on bloated inventory to hook the consumer, and while shopping, there will be additional purchases.”
What Your Clients Need
The holiday outlook has retailers grappling with a range of challenges, including labor costs (40 percent of retailers), bloated inventory (38 percent), and labor shortages (39 percent). Innovative solutions such as self-service kiosks and mobile POS can be invaluable tools that help retailers mitigate the impact of these challenges.
It’s important to note that past holiday seasons have demonstrated the unpredictability of retail trends during a quarter that is historically crucial for retailers to stay viable. Helping support your clients in staying agile and ahead of industry trends by offering a flexible omnichannel payments solution is paramount. Contact us to learn more.