“Affordability” and “digital” will be the watchwords for the upcoming holiday shopping season.
That’s according to a study by global consulting firm AlixPartners, which said that inflation and other economic concerns will weigh heavily on consumers this holiday season. The firm also forecast a tepid 4.0% to 7.0% increase in holiday sales (October 1 through December 31) over last year — which at the current inflation rate of 8.3% means retailers would see a decrease in real sales.
In a survey of more than 1,000 American consumers, 30% of respondents said they plan to spend less this year than last (only 17% plan to spend more). Thirty-nine percent plan to buy at least half their purchases on sale.
Also, more shoppers plan to wait this year to start their holiday shopping. Only 46% said they plan to start holiday shopping before Halloween (October 31), down 7 percentage points from a similar AlixPartners survey last year.
In other survey findings:
• Forty percent plan of respondents said they plan to do the majority of their shopping online (up 10 percentage points from a similar AlixPartners survey in pre-pandemic 2019).
• Only 56% of holiday shoppers plan to visit a physical store to browse merchandise this season, down from 57% who said they would in AlixPartners’ survey last year (and down from 80% in the firm’s survey in 2018).
• Forty percent of consumers plan to buy more affordable brands this year due to inflation impacting prices.
Joel Bines, global co-head of the retail practice at AlixPartners, said that the watchwords for retailers this holiday season will be “affordability” and “digital.”
“What we’ve dubbed as today’s ‘me-centric’ consumer — a consumer who holds all the power — is currently not only empowered, but also worried about inflation and recession,” he said. “As a result, consumers will be holding out for deals this year, even as retailers themselves struggle with their own inflation and with massive inventories.”
Alexa Driansky, a director in the retail practice at AlixPartners and one of the contributors to this year’s forecast and survey, offered the following advice for retailers.
“The best things retailers can do to ensure their profits aren’t scrambled at the end of the year is to put customer insights quickly into action, ensure tight inventories, optimize pricing and focus on cost control,” she said.
The 2022 AlixPartners U.S. Retail Holiday-Sales Forecast is based on proprietary AlixPartners methodology and was first instituted in 2012. The period it encompasses is October 1 through December 31. Its numbers are seasonally adjusted, and it covers core retail sales, which exclude motor vehicles, fuel, and restaurants and drinking establishments.
The 2022 AlixPartners U.S. Retail Holiday-Outlook Survey polled 1,021 consumers in the United States ages 18 and older September 7-9, 2022.