Coveo, a provider of platforms that helps to transform search, recommendations, and personalization within digital experiences, has launched a new report. The 2022 Holiday Shopping Report: Spending Trends & Impact. The report reveals findings from a summer 2022 survey of 4,000 US and UK consumers. Conducted by Coveo in partnership with Arlington Research, the report provides an analysis of shopper sentiment. The report reveals plans for the upcoming holiday season. It suggests surprising trends and macro and microeconomic factors impacting this holiday shopping season.
80% said that they plan to shop the same or more during the upcoming holiday season compared with past years. 45% will start shopping earlier than usual to find deals and discounts, given the rising cost and availability of goods.
“Despite the rising cost of living, we continue to see strong interest in shopping for the upcoming holidays. Brands should note the anticipated behavioural changes related to shopping timeframes, generational mindsets, and expectations for intertwined online-offline customer experiences,” Brian McGlynn, General Manager of commerce at Coveo. “As economic conditions continue to fluctuate, we believe retailers must keep up with shopper behaviour trends. They must test assumptions to keep the customer experiences relevant at all times. Retailers must focus on profitability and performance will be even more necessitated.”
Survey Insights
The survey unveiled several insights on current shopper sentiment and behaviour trends, including:
- Having a physical retail presence may help with eCommerce sales: 54% of consumers said they are likely to look at a product online and buy it in-store. An almost identical number (53%) reported being likely to look at a product in-store and buy it online. Physical stores driving growth across all channels will continue throughout 2022, according to multiple retail experts.
- Uncertain logistics and restrictive return policies negatively impact conversions. Abandonment and bounce rates are always significant challenges for retailers. According to Coveo’s survey, 42% of shoppers explicitly said they will leave a site if shipping options are limited. Alternatively, they don’t have a buy online pick-up in-store option (BOPIS). Also noteworthy is that 35% of respondents said they are turned off by restrictive returns policies.
- There are generational differences in shopping attitudes, with Gen Z as the main standout. There were notable patterns across different generations that retailers should prepare for as the seasonal peaks approach. Specifically when asked about brands between this year and last, compared to other generations. Gen Z is more apt to buy luxury goods online (28% vs. 15% overall). They were also more loyal to brands they shopped from last year (41% vs. 23% overall). Gen Z was more likely to factor sustainability into buying decisions (64% vs. 25% overall).
- Brand loyalty continues to reign, especially with older generations. Millennials (58%), Gen Xers (67%), Baby Boomers (75%), and the Silent Generation (77%) all stayed loyal to the brands they liked in the last year.
- Motivating factors go beyond discounts. 67% of people surveyed this summer are interested in product recommendations, tailored offers, discounts, and promotions. This, combined with the likelihood of spreading out purchases to take advantage of deals, means retailers should note that although many consumers are shopping more online. It may be more challenging to translate the interest into a higher Average Order Value (AOV).
Black Friday spend forecast at $158bn
Another report by digital publisher, Future Publishing estimates consumers’ Black Friday spend forecast to hit $158 Billion. Future finds three-quarters of shoppers plan to take advantage of Black Friday deals despite Cutting costs elsewhere
76% of US consumers plan to shop for deals on Black Friday. The data indicates that inflation and economic challenges are leading consumers to cut back on dining out and subscriptions. However, there is cause for optimism for retailers and advertisers however, given other consumer behaviours highlighted in the study.
The research highlights that the impact of rising costs has driven consumers to seek out deals and buy gifts earlier to beat price hikes. 45% have already started their holiday gift purchases. Shoppers, however, do want brands to engage with the joy of the upcoming holiday spirit. 71% want festive ads earlier or no later than usual. This suggests that brands very much have permission to engage with consumers around the holidays.
The research gives key insights into how consumers want brands to address this period of financial uncertainty. Almost half of the shoppers (42%) expect brands to meet them halfway by reducing prices to encourage sales. But importantly, a third of consumers want to see their brand loyalty rewarded. A third also wants brands to be giving back, either in the form of charitable donations or supporting causes.
94% of respondents will be turning to expert content online to seek help navigating rising costs. 56% of respondents want to know where to get a good deal. Furthermore, 40% want expert product reviews to get the exact product for their needs.
Zack Sullivan, Chief Revenue Officer at Future suggests, “Our research shows, however, that shoppers will spend wisely during this time. Shoppers are carefully seeking out valuable advice through online content to get the best deals. Through this research, Future can see there is clear purchase intent amongst our audience bases.”
Enterprise Times: What this means for business.
Black Friday and the holidays are normally the two strong anchor points in the calendar for retailers and brands. Rising inflation and supply chain shortages are causing consumers to think seriously about their spend during this holiday season. As a result, there is an opportunity for brands as they consider how they reach more price-conscious shoppers. Both reports, like other analyst research, suggests consumers are expected to shop more smartly during the expected holiday season. Both pieces of research give key insights into how consumers want brands to address this period of financial uncertainty. Interestingly, the Coveo Survey also found that consumer shopping is not slowing down despite economic concerns. Their report suggests that 80% of consumers planning to shop as much or more this holiday season as compared to last year. Compared to other consumer reports, which have suggested a slowdown in spending, the Coveo Research sounds optimistic.
