Retail Holiday Outlook 2022 – Loss Prevention Magazine | Directory Mayhem

Although it is very early autumn, many of the shops we visit are already looking very much like Christmas. Santa is in for a mad rush for limited supplies as several major retail chains are already putting their trees and trimmings up for sale.

Typically, all retail holiday forecasts are released in late summer and early fall. The keywords bubbling up in this year’s cloudy crystal ball are early, inflation, recession, discounts, and the ongoing battle between physical and digital retail. The timing of the economic cycle will potentially result in more winners than losers.

COVID-19 has moved into the rear view mirror and has been replaced by financial headwinds. In fact, concerns related to COVID-19 have dropped significantly, from 52 percent (in 2021) to 16 percent this year during the financially Concerns are up 153 percent. It’s time now for my annual round-up of those forecasts, along with my own thoughts for the 2022 retail holiday season.

US Christmas Sales Expected to Rise, But…

Bain & Company forecast that retail holiday sales will rise 7.5 percent this year, ahead of the 10-year average of 5 percent. However, if you factor in inflation, real growth is between 1 and 3 percent below the 10-year average.

Total sales will reach $915 billion this year, with 72 percent coming from physical stores. Those with incomes between $50,000 and $100,000 plan to spend more this year than they did in 2021, while those with higher incomes ($100,000 and above) are less confident about their spending in 2022.

Comparable growth this year is tougher, as Bain-defined vacation sales rose 13.2 percent last year, the highest in 30 years. Rate hikes, higher debt and ongoing supply chain challenges are additional microeconomic headwinds. Unemployment was just 3.7 percent in August, wages rose 4.4 percent in the same month, inflation pushed nominal growth higher, and cash/check deposits were 3.8 times pre-pandemic levels achieved are the rays of hope.

It issued a similarly positive holiday forecast MasterCard. Holiday sales excluding autos are expected to grow 7.1 percent, compared to reported 8.5 percent growth in 2021. E-commerce growth continues to accelerate, reaching nearly 19 percent of total retail sales.

Mastercard forecasts physical store sales to rise 7.9 percent and reported that they accounted for 80 percent of total retail sales from January to August 2022. Apparel and luxury lead the sales growth at 4.6 percent and 4.4 percent, respectively. Higher interest rates continue to have a negative impact on the US economy.

salesforce.com forecasts that global online retail sales will remain relatively flat during the holiday season, reaching $1.12 trillion worldwide and $265 billion in the US. Digital sales will continue to dwarf pre-pandemic levels (an increase of 55 percent globally and 61 percent in the US at a 30-year growth rate compared to 2019 sales).

Inflation will have a negative impact on spending around the world. While online prices will increase by 7 percent compared to 2021 and 15 percent compared to 2020, total online consumer orders will decrease by 7 percent compared to the 2021 holiday season (5 percent down in the US). A full 10 percent of profits will be at risk this year due to increased costs from suppliers, labor and transportation that exceed retailers’ ability to pass on to consumers.

Good news on sustainability as the majority will be taking up that option this holiday season. Salesforce.com reports that despite this preference, only 23 percent of brands promote and offer sustainable options in the shopping journey.

Deloitte forecasts that retail sales are expected to grow 4 to 6 percent in 2022. Holiday sales will be between US$1.45 trillion and US$1.47 trillion in the period from November to January. In their analysis, this compares to 15.1 percent growth last year. E-commerce is also expected to grow by 12.8 to 14.3 percent, reaching between $260 billion and $264 billion this holiday season.

The other retail holiday statistics

Here are some other interesting and important statistics as we prepare for a successful holiday season:

  • 59 percent of consumer are stressed about inflation-related holiday spending. The same survey found that shoppers plan to spend less on gifts this year, with 73 percent saying they will monitor their spend more closely in 2022.
  • A CNBC poll said more than half of consumers are either somewhat or very concerned about sticking to their vacation budget and 80 percent expect to be affected by inflation. 52 percent of respondents to this survey also said it will be harder to afford Christmas presents this year.
  • Many indicators from surveys suggest that consumers are shopping early. 77 percent stated that they had bought Christmas presents during Amazon Prime Day and other competing events offered by retailers in July. This is the earliest stat I’ve seen, but I can confirm it from my own households as we buy much earlier.
  • Digital and Loyalty will be just as critical this year. Only 4 percent of buyers did not use digital channels in the past year. 61 percent of consumers have joined a loyalty program to receive a discount during the 2021 holiday season.
  • Discounts are expected to continue into the holiday season, with 73% of retailers reporting KPMG that stores will offer more promotions, and 21% said they plan to do “more” promotions.
  • Also as a retailer a positive image Holiday season, as 92 percent expect a recession in the near future. 81 percent expect a year or less. In preparation, 52 percent plan to reduce indirect costs and 42 percent would invest more in loyalty, reducing direct spend and inventory. 56 percent expect to be stuck with excess inventory after the holidays.
  • 61 percent of consumer expect to spend more or the same on shopping for themselves and their home for vacations in 2022. 94 percent plan to consult experts to help manage rising costs, with 56 percent wanting to know where to find good deals and 40 percent looking for product reviews that fit their needs. Creators have 4x more impact on consumers than celebrity posts and are also ranked via social ads.
  • 48 percent of consumer are likely to buy a product directly from TikTok, while 65 percent have already purchased from a streaming platform. One in four shoppers in the US and UK said they would abandon a website if shipping options are limited or they don’t offer a buy online, collect in store (BOPIS) option.
  • 60 percent of digital orders are now influenced by physical stores. salesforce.com predicts that retailers with brick-and-mortar stores will grow their online sales 1.5 times faster than those without.

Corresponding e-marketers The outlook for the 2022 holiday shopping season is solid, but retailers need to prepare for a fundamental rebalancing of the shopping season. Two seasons of pandemic-related holiday shopping will result in permanent changes in the holiday sale calendar and reset consumer expectations of when to shop for the best deals. The 2022 holiday season will be longer and flatter, with less concentrated spending during the Cyber ​​Five period.

As Caila Schwartz, Salesforce Director of Consumer Strategy and Insights, said, “For retailers, 2022 is about playing the long-term. Economic challenges and changing consumer preferences mean that responding to conditions with a real-time, data-driven strategy will be crucial. And while we can’t stop inflation, we can recession-proof our businesses by improving profitability and addressing operational inefficiencies.”

The future of retail includes powerful brands that deliver immersive consumer experiences that are increasingly digitally influenced. This holiday season will test our execution in responding to economic headwinds. Successful retailers will focus on loyalty to attract consumers to this and many more profitable holiday seasons.

To read the full article go to Author’s website.

Tony D'Onofrio website

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