By Jingru Zhou, Research Analyst
This Fall has been a season like we’ve never seen: early holiday deals from Amazon, Walmart, Target and more, increased prices due to inflation and the looming possibility of a recession in 2023. Despite all of this confusion, the 2022 winter holiday shopping season as a whole is still expected to be strong.
How Much Will Consumers Spend this Year?
Following the trend from last year, which celebrated an impressive 16% increase in total winter holiday sales despite the ongoing pandemic, it is estimated that sales will continue to grow in 2022 by approximately 4.7% (Mintel). While 29% of consumers think inflation will have a significant impact on their holiday spending, 22% plan to spend MORE than prior winter holidays (Mintel).
Nearly ALL consumers (94%) plan to participate in winter holiday shopping this year (Mintel), with 60% of US consumers expecting to spend more than $200 on Christmas (Numerator). This is attributed to the availability of vaccines (and having to worry less about COVID-19) and the return of parties, events and celebrations. Interestingly, 67% of Hispanic consumers plan to shop specifically for the Thanksgiving holiday – well over-indexing ahead of other consumer groups – as Hispanic families embrace this holiday to gather and celebrate cultural traditions and cuisines (Mintel).
What/Where are Consumers Buying?
Retailers with brick-and-mortar stores will be happy to hear that in-store shopping will continue to rebound, with 95% of consumers planning to shop in-store, and surprisingly, Gen Z’s most likely to shop in store. With older generational groups embracing e-commerce during the pandemic, 85% of adults 55+ will shop online this holiday season (Mintel).
But what are people shopping for? With the surge of Omicron during the 2021 winter holidays, resulting in downsized parties and gatherings, food and beverage did not rebound towards pre-pandemic levels as other categories did. While 2021 saw a surge in clothing, footwear, beauty and electronic purchases due to the current health climate, the one thing retailers CAN count on for the 2022 season is an uptick in food, beverage and home decoration purchases as holiday gatherings begin to reach pre-pandemic levels (Mintel).
Marketers – here’s your in! More than half of consumers expect that media ads will impact their shopping decisions, especially younger consumers who are less impacted by sales and brand recognition. Other factors impacting what to shop for? Friends and family recommendations, sales and who the gift recipient are the leading influences (Mintel).
Will Inflation Affect Spending?
Regardless of household income level, 75% of shoppers are looking to find the best deals when holiday shopping due to rising prices. BUT, people are more intent on finding a good deal instead of spending the least amount of money by buying cheap brands or products, or giving fewer gifts. This is just one of the reasons why discount and dollar stores are a growing share in the stores consumers are most likely to shop with for the holidays (Mintel).
Since people are on the hunt for deals, they will spend more time seeking great prices, so they tend to prepare and shop earlier; nearly half of all adult’s plan to do their shopping before Thanksgiving, with 55+ most likely to shop during October and November (Mintel). Males under 45 (who are most likely dads) also tend to shop even BEFORE October because they want to check this off their to-do list as fast as possible. Speaking to that, nearly 40% of purchases made during July’s Amazon Prime Day were gifts purchased to be given for the winter holidays (Statista). We are anxiously awaiting the breakdown from the most recent Amazon Prime Day in October to see if even more people were already in the holiday shopping zone.
Between early sales and big-box retailers stocking shelves with both Halloween candy and holiday decorations in October, it’s clear that once again, the holiday shopping season has kicked off earlier than ever before. With in-store shopping rebounding but multichannel becoming the new norm, it’s clear that one-stop shopping and value-oriented retailers will win the holiday shopping race this year. Deal seeking consumers are seeking great deals over brand loyalty, so now’s the time for marketers to be front and center tooting their horns with promotions, stock availability and convenience to reel in this year’s holiday shoppers.