- An overwhelming majority of consumers (76%) believe the U.S. is either in a recession or headed for one.
- “We expect discretionary categories, from restaurants to electronics, to continue to take the brunt of consumers cutting back. We expect that even home improvement will soften relative to last month.”
- “Retail sales are set to increase as a result of higher prices, and this dynamic has the potential to further drive ecommerce sales as consumers look for online deals to maximize their spending.”
As all you ghouls and goblins finish up the Halloween season and continue preparations for the holidays, it is important to know what to expect from consumers during the busiest shopping time of the year, and what they are going to expect from you.
Concerns about inflation and the corresponding impact on overall spending are at the highest levels seen this year, and an overwhelming majority of consumers (76%) believe the U.S. is either in a recession or headed for one, according to JungleScout’s 2022 Q3 Consumer Trends Report. As experts quibble over the official call, most consumers are already experiencing economic uncertainty: 52% say their household income is unstable — up 36% from three months ago — and 73% have either reduced or maintained their overall spending levels.
The report found that in Q3, consumers were buying less:
- Cleaning Supplies (58%)
- Beauty & Personal Care (52%)
- Vitamins & Dietary Supplements (51%)
- Home & Kitchen (47%)
According to the report, more than half of consumers plan to change their holiday shopping plans this year in response to rising inflation — 90% have noticed higher product prices in their day-to-day spending — and an early pulse check suggests starting early may be a popular strategy. Just 5% of consumers expect to wait until December to begin their shopping, while more than 70% said they will start before Thanksgiving.
These Categories Will Not Be Popular
Even with gas prices going down, we are likely to see a slight softening in spending in October compared to September, according to Katie Thomas, lead at Kearney Consumer Institute. “Certain categories may be propped up slightly from back to school, including segments of apparel and general merchandise. Otherwise, we expect discretionary categories, from restaurants to electronics, to continue to take the brunt of consumers cutting back. We expect that even home improvement will soften relative to last month,” she said.
Retailers Should Offer Convenient & Affordable Options
Deloitte’s annual holiday retail forecast also predicts Q4 spending to take a slight hit this year due to inflation. The report anticipates that holiday retail sales are likely to increase between 4% and 6% in 2022, totalling $1.45 to $1.47 trillion during the November to January timeframe. Deloitte also forecasts ecommerce sales will grow by 13% to 14%, year-over-year, which will likely result in ecommerce holiday sales reaching between $260 billion and $264 billion this season.
“As inflation weighs on consumer demand, we can expect shoppers to continue to shift how they spend their holiday budget this upcoming season,” Nick Handrinos, vice chair, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader, said. “Retail sales are set to increase as a result of higher prices, and this dynamic has the potential to further drive ecommerce sales as consumers look for online deals to maximize their spending. Retailers across channels who remain aligned with consumer demand and offer convenient and affordable options can be well positioned for success this season.”
No matter the challenges that pop up during this busy shopping period, small business owners continue to remain resilient and come up with new ways to bring customers into their stores. As you finish up the last of your holiday preparations, take a look at some of these trending best-sellers to add to your inventory as last-minute gift ideas:
Featuring a stretch knit upper shoe, branded eyelets, and functional laces, these combat boots are sure to provide the perfect fit for all consumers. The back zippers allow for easy on and off, and the comfortable cushioned footbed allows for all day comfort. Available in Walnut, Black, and Cream Coffee colors.
Getting enough water each day should not have to feel like a chore or leave your customers thirsting for more. Plexus Hydrate Lemon Lime is the ultimate convenient hydration solution everybody needs for optimal performance and balance. Simply blend one packet into regular water for a hydration superforce with the electrolytes, antioxidants, minerals, and vitamin C the body craves.
These mini blemish fighting marvels are as cool as they sound, and make for great stocking stuffers. Formulated with salicylic acid to exfoliate, charcoal to detoxify, and antioxidant-rich tomatoes, these award-winning Zit Zapping Dots purge pores and help to banish the appearance of breakouts overnight. The black and red dots are equally effective, and they can be placed on pimples right after cleansing the face.