santa buried in boxes
  • “The classic thing that happens when consumers see price increases is they tend to mainly buy things and stock them for a longer amount of time because they start to understand that they will pay more tomorrow than they will today.”
  • 85 percent of customers will not shop with a retailer again after having had a poor delivery experience.
  • It is important to keep in mind what items will sell and which ones will collect dust in the back room. Keith Daniels, Partner at Carl Marks Advisors, advises brands to focus on merchandise that turns quickly and has performing margins in order to survive the holiday season. 

It may only be August, but July’s Amazon Prime Day event proved the holiday shopping season is already here. With sky-high inflation and continuing supply chain and inventory challenges, the deep summer discounts that surrounded Amazon’s Prime Day event served as an unofficial kick-off to the start of the holiday shopping season. 

More than two years after the global pandemic sparked supply chain chaos, shoppers are anticipating shipping delays and inventory challenges to hinder their annual retail indulgence. That means consumers are more likely to buy gadgets, or toys early, especially when they are discounted. A Helium 10 report also found that the shopping excitement will be high for Halloween 2022, as well as Black Friday and Cyber Monday. 

Top Findings and Predictions

Annual forecasts for 2022 from The National Retail Federation and Reuters both predict year-over-year growth for retail and online sales. Helium 10’s analysis indicates consumer spending is expected to be high for Halloween this year and the weeks following Black Friday. Here are several key predictions based on previous years’ trends:

  • Halloween 2022 will be huge, both in pent-up consumer demand and peak popularity: Search volume for “Halloween” has gained traction earlier and earlier, with searches beginning to increase starting in July of 2021, and peaking at 123K daily searches in October. Total search volume for “Halloween” from mid-August to early November even rivaled key Christmas keywords in December, suggesting an exciting opportunity for merchants this year.
  • Black Friday will be the start of a marathon for sellers: Post-Black Friday volume surpassed the levels of the weekend itself, and increased sales will last until January, a trend seen for the last three consecutive years.
  • Christmas shopping will continue as long as “shipping” is possible: December 8 marks the beginning of the highest levels of impressions for Christmas searches seen during the season, increasing by over 1,200 percent compared to levels seen in early November. Consumers will only stop buying gifts when the shipping deadline for Christmas delivery has passed.

How Inflation Will Impact the Holiday Shopping Season

Consumers throughout the U.S. continue to feel the impact of the sustained levels of increased inflation. According to a report, 54 percent of shoppers are concerned about inflation driving price increases and are on the lookout for promotions and switching to lower-priced brands. 

“The classic thing that happens when consumers see price increases is they tend to mainly buy things and stock them for a longer amount of time because they start to understand that they will pay more tomorrow than they will today,” Yossi Cohen, Co-founder and CTO of Quicklizard, said. “The other thing is that consumers start to lose trust in the value of their money, so they will save money. We are going to see more purchases for the future on things that are more necessary, regardless of price, rather than on luxury items.” 

Yossi offers a few tips for retailers on how they can still win customers over despite inflation:

  1. Integrate an automated pricing solution into your business model. Inflation is changing the cost of goods constantly, and it can be a huge time-saver to integrate an automated pricing solution that will change the prices on all of your merchandise without having to go in and do it manually. Saving time also saves you money. 
  2. Be competitive. Especially during the holidays, all brands are putting their best foot forward and offering a variety of different incentives and discounts to get shoppers to buy from them. Whether you decide to promote your loyalty program, increased rewards, sales, or discounts, you need to stay competitive in order to stay in the game. 
  3. Be sure to have products in stock at all times. With the supply chain shortage, retailers need to ensure they have merchandise in stock, because otherwise consumers will run to other brands in order to get the gifts they are looking for. Be sure to check out WholesaleCentral.com to keep your shelves stocked.

Start Holiday Preparations Early

The holiday season is busy for retail customer service every year, and with 56 percent of Americans planning to take their holiday shopping online, supporting those customers will be a true 24/7 job. Last year, shoppers spent a record $204 billion online, and faced billions of out-of-stock messages. John Gniadek, VP of Partner Success at Simplr, says that retailers should start preparing now in order to give consumers the quality customer experience they need in order to make it through the season. 

According to Gniadek, this is what brands can do to prepare:

  • Hire the right staff and support systems for retail operations.
    It is getting more difficult, especially with the labor shortage, to find talented employees that care and give that empathy to customers, so having the right staff along with the right process in place to be able to answer calls quickly and resolve issues plays a critical role. 
  • Set the right expectations for shoppers.
    Being able to get customers their products on time before Christmas will be a huge challenge, so be sure to set the right expectations and give consumers ample time to place an order. Always let them know if a product is low in stock, and have customer representatives armed with the correct information so they can let shoppers know where their merchandise is. 
  • Create seamless purchasing experiences both online and in-store.
    Ensure that both your website and storefront are laid out properly so that consumers can find exactly what they are looking for without having to wander for too long. While store associates can help a customer find a specific product, online shoppers can just as easily go to another brand’s website. 

“Transparency and accuracy are key. Having an accurate understanding of what is available to sell, and then being transparent with the customer and making sure you are not overselling and creating stockouts is very important,” Chris Deck, CEO and Founder of Deck Commerce, said. “If you have the ability to procure more inventory, be transparent with shoppers and set accurate expectations as to when an order will be able to ship — this can help to avoid disappointing customers. They are flexible and open to adapting to different scenarios, so as long as there is transparency, retailers will be set.” 

Stack Incentives to Drive Success

With inflation on the rise, consumers are sacrificing brand loyalty to shop at retailers who offer greater value. According to Julie Van Ullen, Managing Director at Rakuten Rewards, this means that loyalty is up for grabs, and rewards incentives are great strategies for winning or maintaining that loyalty during a time of economic uncertainty. 

Different incentives can include:

  • Coupons
  • Cash Back
  • Discounted Prices
  • Site-Wide Sales
  • Free or Reduced Shipping

“This is why stacking incentives is so important. If a retailer chooses to go all in on one strategy, they are alienating a majority of shoppers who will be looking for different incentives,” Van Ullen said. 

Level Up Delivery Experiences

According to FarEye’s Last Mile Mandate Consumer Survey, 85 percent of customers will not shop with a retailer again after having had a poor delivery experience. Furthermore, a full 88 percent of consumers may abandon their online shopping cart if delivery terms are poor, such as having slow delivery or high costs. Despite the growth in ecommerce, this shows that shoppers are still looking for seamless purchasing experiences. 

According to PICKUP’s CEO, Brian Kava, if retailers want a shot at meeting consumers’ expectations of delivery, they need a clear understanding of what they now expect from their delivery experiences, including:

  • The term “faster delivery” should live up to its promise: 96 percent of customers consider fast delivery to mean same-day delivery. As such, retailers need to clearly define what fast delivery means for their customers down to the minute and have a strategy to uphold their fast delivery promise.
  • Customer control: Customers want to have full control over when, where, and how their purchases are delivered. 77 percent of customers have abandoned their purchases because they did not like their delivery options. Flexibility and convenience must be offered with every delivery.
  • Exceptional service: If a customer has a poor experience with a delivery person, the results range in lasting, negative effects. Fully-vetted delivery teams are a must. This can be achieved through the right blend of people and advanced technology.

Prioritize High Performing Products

Supply chain struggles are going to have retailers everywhere cracking down and overstocking on products to ensure they have enough inventory to sell to consumers. At the same time, it is important to keep in mind what items will sell and which ones will collect dust in the back room. Keith Daniels, Partner at Carl Marks Advisors, advises brands to focus on merchandise that turns quickly and has performing margins in order to survive the holiday season. 

“Keep track of the items that turn slowly, because then you can reassess your inventory and shorten the frequency of re-stocking those products. Be proactive, because managing working capital is very important through some of these up and down cycles. Focus on merchandise that is not turning as quickly and move the demand down or modify the orders. If products are not turning at all, retailers need to look to things like markdowns to move the inventory out and make room for things that consumers are looking for right now,” Daniels said. 

Returns: The Pain Point for Retailers

Holiday returns are always a big issue for brands every year. In a Voxware survey last year, 97 percent of respondents strongly agreed or agreed that the way retailers handle returns influences whether they would purchase from that shop in the future. 

Keith Phillips, President and CEO of Voxware, offers some tips for retailers on the best way to deal with returns and avoid upsetting customers:

  • Automate, automate, automate!
    The worst part of the returns process for most retailers is not the actual consumer experience, but the problem starts once the item shows up at the distribution center, and now you have to figure out what to do with the product. 
  • Sell returned items in bulk to the discount market for a price per pound.
    They key is to not let the merchandise continue to stack up in your back room or a warehouse until you forget about it, so have a system in place, even if it means you sell it to a discount market. 
  • Tell customers to keep or donate the products.
    This is a growing trend that more retailers are taking advantage of since it reduces the cost of having the customer ship it back to your store and then needing to either restock it or have it take up space in your back room. This is appealing from a social perspective on the company’s behalf, and this could be the way of the future. 

The pandemic continues to throw curveballs at retailers, making the holiday shopping season just a little more stressful than normal. This is why it is super important to prepare way in advance so brands have everything in place and are ready for any problems that may occur. Use these tips from industry experts and have yourself a successful Q4.


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