Consumers will start holiday shopping earlier than ever this year, predicts Salesforce.
Physical stores will drive growth across all channels during the 2022 holiday shopping season.
That’s one of five holiday shopping predictions from Salesforce, which said that higher prices are driving down consumption. According to company research, 51% of consumers plan to purchase fewer holiday gifts this year.
“With rising gas prices, food shortages, skyrocketing interest rates and ever-present inflation, consumers are worried and will likely shift their buying behavior,” Caila Schwartz, director, consumer strategy & insights, Salesforce, wrote in a blogon the company’s website. “In the face of uniquely challenging factors, the stars are aligning to deliver another “unprecedented” holiday season for the retail industry.”
Here are Salesforce’s five holiday shopping predictions.
1. Shoppers will buy even earlier to avoid price hike.
More and more shoppers purchased holiday items in early November during the last two years due to inventory and supply chain issues. This year, however, the main motivating factor driving early purchases will be inflation.
According to Salesforce research, 42% more shoppers worldwide and 37% more in the U.S. plan to start buying gifts earlier – the No. 1 behavioral change this holiday due to inflation. They hope to snag their holiday gifts before prices rise too much.
2. Product value will trump convenience for shoppers.
Half of all shoppers will switch brands during the 2022 holiday due to pricing. This means that 2.5 billion shoppers worldwide could ditch their brand for a lower-priced competitor.
Pricing and discounting strategies will be more crucial than ever to holiday success, as 17% of global shoppers (850 million) and 15% of U.S. shoppers (31 million) are unsure if they will buyany gifts this year, according to Salesforce.
Some product categories — including luxury brands, grocery and department stores — are more susceptible to waning loyalty due to price sensitivity (either high prices or significant increases in prices).
3. Physical stores will drive growth across all channels.
Sixty percent of digital orders are now influenced by the store – whether demand is generated or fulfilled. This year, with stores fully operational once again, we’ll see consumers gravitate to the physical store in even greater numbers. Salesforce predicts that retailers with physical stores will grow online sales at a rate 1.5 times faster than those without.
“There’s real opportunity for retailers with both physical and digital stores to grow faster than digital natives and e-commerce brands,” “Merging shopping across both digital and physical spaces enhances the value of each channel.”
4. Shoppers will gravitate to sustainable options.
Eighty-three percent of shoppers will seek out sustainable brands and products this holiday. And 42% said they will consider paying more for sustainable shipping options or select a longer delivery window.
After a company’s treatment of customers and employees, its environmental practices are the top factor influencing buying decisions, placing the importance of sustainability initiatives ahead of actions around racial and economic justice.
5. Retailers will test NFT drops.
The season’s hot collectibles will come straight out of the metaverse: Forty-six percent of shoppers said they would consider purchasing non-fungible tokens(NFTs), a digital asset that represents something unique or scarce stored on a blockchain.
Younger shoppers particularly are drawn to “digital twins” — a digital version of a physical good. Gen Z is four times more likely than Gen X to buy a physical good if it is paired with a digital twin this holiday.
For retailers, 2022 is about playing the long game,” Schwarz said. “Economic challenges and shifting consumer preferences mean that leading with a data-driven strategy will be critical to reacting to conditions in real-time. And while we can’t stop inflation, we can recession-proof our businesses by improving profitability and solving for operational inefficiencies.”