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The 2022 holiday season: In review

Illustration of a person standing at a laptop computer next to a large screen displaying graphs.

The holiday shopping season is typically a time of joy with celebrations, time off to reset, and gift-giving. However, it can also be a time of financial stress.

Stats show that 2022’s holiday shoppers were a cautious bunch, and rightfully so, with inflation at its highest in decades and a looming economic downturn.

While holiday season retail sales were still up from the previous year, brands faced the unique challenge of catering to a hyper-aware customer base with high expectations for a stellar experience. Those who didn’t meet the standards were likely left behind for a brand that consumers deemed worthy of spending time and money with.

In this blog, we’ll take a look at the holiday season by the numbers. Without further ado, we present our 2022 holiday season review.

The 2022 holiday impact

Holiday spending

Even with consumers more financially cautious this year, online sales reached $35.5 billion during Cyber Week alone. Overall e-commerce holiday purchases saw an increase of 3.5% from 2021. Yet while spending was up, studies found that customers were choosier in who they purchased holiday gifts for this season. U.S. consumers bought gifts for about 4 people on average in 2022, down from 6 in 2021.

Where customers shopped

Consumers continued to shop online – even with the push for in-person experiences. According to Adobe Analytics, online sales reached $211.70 billion over November and December. This being said, in-store shopping is still recovering after the pandemic. 74% of holiday shoppers visited shopping centers (a 4% increase from 2021) and 39% of holiday spending was done in a physical store (5% from 2021).

In addition to more traditional shoppingchannels, social media had a larger impact on product discovery this holiday season compared to last, with traffic referrals driving 12% (+23& YoY) of all mobile traffic.

What customers bought

  • According to a study from Salesforce, the most popular holiday gifts purchased between Cyber Week and the new year were:
    • Active footwear
    • Active apparel
    • General footwear

Holiday returns

Returns are always a factor for a smooth experience, and the stakes are even higher during the holiday season when consumers expect more from brands. This past year, Salesforce reported that returns almost doubled after Black Friday/Cyber Monday this year. Not only that, but they predict a 57% increase in holiday gifts returned.

Overall, customers expect no-hassle return experience, with 63% of consumers looking for free shipping when making an online return. Interestingly enough, while many customers may be returning their products, Statista found that over half of US consumers would rather re-gift or donate items than formally return them.

Holiday debt

Cautious consumers chose credit card payment methods, but the outlook for paying off 2022’s holiday spending is quite bleak.

A survey by LendingTree found that 37% of respondents were expecting 5+ months to fully pay off their debt from the 2022 holiday season. While the number of Americans who came out of the holidays with debt decreased overall from last year, the average amount of debt increased. 2022 saw $1,549 as the average amount of debt – up an eye-watering 24% from 2021.

With the price of essential goods continuing to skyrocket in the new year, consumers may find it increasingly difficult to meet their minimum payments, never mind pay off the debt in full.

5 trends of 2022’s holiday season

Promotion and deal hunting

While inflation rates saw a bit of a dip in December, customers were still slow to hit that ‘purchase’ button without some sort of discount or deal to save money this holiday season. In fact, during the 2022 holiday season, 65% of consumers in the US said price was a primary factor in influencing buying behavior. With the rising prices of essentials like eggs and gas throughout the fall into the new year, it only makes sense that consumers were shopping smartly, avoiding impulse buying and overspending while looking for cost-saving deals. With this in mind, 2022 holiday shoppers were looking for markdowns that could save them financial stress in the long run.

Earlier holiday shopping

It feels like every year the holiday shopping season begins earlier than the last, and 2022 was no exception. Instead of the typical Black Friday/Cyber Monday (BFCM) sales, a few larger players had holiday sales as early as October and continued to promote discounted products through the new year. Amazon revealed an ‘Prime Early Access’ sale for its top members from Oct. 11-12, while Target also has a ‘Deals Day’ event the same month. Not only this, but ongoing supply chain issues had many customers opting to purchase holiday gifts well in advance.

Financing flexibility like Buy Now, Pay Later

While consumers were proceeding with caution, online retails were combatting economic uncertainty with more flexible purchasing options. The most popular? Buy Now, Pay Later (BNPL) where shoppers can pay off their purchases in separate interest-free installments over a set period of time. Over BFCM, BNPL company sales jumped up 68% higher than the previous week according to Adobe Analytics. This method was especially popular for younger consumers like Millennials and Gen Z who are conscious about interest rates and the credit card ‘snowball’ effect.

High shipping standards

It’s no surprise that consumers want their packages, and they want them fast, especially over the holiday season. Studies found that over half of consumers were concerned about holiday shipping delays in the US this year, prompting them to keep an eye out for expedited delivery options like 2-3 day delivery and same-day shipping. Of course, for online merchants over peak season, there are bound to be a few mishaps here and there with on-time orders. It’s always best practice to communicate holiday shipping cutoffs with your customers. In fact, the more communication the better – this way if there is a delay or a problem with the order, the customer will be notified and can have time to pivot.

An omnichannel approach

With a global pandemic fully behind them, consumers have evolved into very different shoppers than they once were. The digital surge of e-commerce and online shopping over the last few years shows no signs of stopping, but in-person experiences and in-store shopping are making a hefty comeback. For retailers this past holiday season, it meant that not having enough selling channels and purchasing options for their customers may have had a negative impact. In fact, a study of 46,000 consumers by Harvard Business Review found that over 70% of customers prefer shopping through multiple channels, including both online and off.

Preparing for the next holiday peak: 3 tips for success

Take a customer-first approach

This past holiday season it was clear that customers shopped with brands who could accommodate their wants and needs, be it fast shipping, killer discounts, or a generous returns policy. For brands going into the new year and the next holiday season, putting the customer first is a no-brainer. With 63% of consumers unwilling to shop at a brand they’ve had a poor experience with, focusing on a customer-first approach is the key to building brand loyalty and boosting sales.

So, what does a customer-first approach look like? Not surprisingly, it touches every facet of your organization. Simply put, it’s the process of proactively delivering a positive customer experience. This can look like user-friendly sites, flexible shipping options, generous returns, well-trained customer support, and more.

Optimize all selling channels

With omnichannel expectations higher than they’ve ever been before, now is the time to optimize all your selling channels and create a cohesive, branded experience. Not only does an omnichannel approach help expand brand reach, it ensures that customer-first strategy for a more positive experience.

No shopper wants to feel like they’re shopping at completely different stores when they visit an online site vs. a storefront. Whether your brand is selling on social media channels or in a physical location, it should be a cohesive experience for shoppers no matter where the journey begins. Brands who meet their holiday shoppers where they are next season will ultimately find more success than those who don’t.

Strategize your post-purchase experience

The post-purchase experience should not be overlooked, especially during the holiday shopping season! It’s the perfect way to build a relationship with your customers when they’re at their most engaged. E-commerce brands looking to come out on top next year will need to make sure they have all their ducks in a row for everything that occurs after that ‘purchase’ button is hit.

We’re talking order tracking communication, seamless returns portals, and easily accessible customer support – all of which can make or break the customer experience. In terms of the order itself, something as simple as a ‘thank you’ note with a QR code for social channels or a fully-branded unboxing experience with product samples becomes a huge differentiator for holiday shoppers. Needless to say, the post-purchase experience can turn first-time customers into loyal brand advocates.

Partner with a 3PL

Perhaps the best way to ensure a successful holiday season is to bring in the experts. Online retailers who work with an experience third-party logistics partner have a plethora of advantages over those who don’t. Because let’s face it, there are a LOT of moving parts to order fulfillment.

Experience third-party logistics partners offer cost-effective ways to fulfill orders. They can take a look at your DIM weight, your packaging, and your processes to make sure they’re getting orders out efficiently as possible. Additionally, many 3PLs can offer unique value-added-services like gift-wrapping, branded packaging, personalized inserts, and kitting.

Plus, 3PLs typically are well-oiled machines when it comes to peak season. This means that even with an unexpected increase in Black Friday sales or Cyber Monday purchases, a logistics partner can pivot labor quickly and scale an operation to meet consumer demand. For e-commerce brands, this means more successful orders and happier customers.

Advanced, real-time technology

Working with a 3PL gives retailers access to fulfillment technology like a WMS or OMS that integrates with major ERP platforms. For brands, this can help streamline turning orders into shipped packages. Real-time visibility into orders help brands to understand where their packages are so they can keep their customers updated. Plus, inventory visibility allows merchants to continuously keep their stock in check, avoiding stock outs and disappointed customers.

Pro tip: Work with a 3PL who offers SKU-based rule targeting for a more seamless order fulfillment experience. The Ryder E-commerce by Whiplash WMS can create granular filters that work automatically with different SKUs. Whether it’s special packaging or expedited shipping, the Whiplash WMS order rules can help merchants apply business logic on the fly.

Screenshot of the Whiplash app showing routing rules.

This type of real-time data tracking can give retailers insight into consumer shopping behavior, market trends, and more – allowing them to make informed decisions based on the numbers.

Cost-effective shipping

And last but certainly not least, 3PLs have established relationships with shipping carriers. What does this mean for e-commerce brands? Cheaper shipping rates! Ryder E-commerce by Whiplash leverages our negotiated carrier rates across our network to provide the lowest landed costs for our customers. Additionally, our WMS offers a SmartRate selection tool where cheapest rate algorithms ensure the most cost-friendly shipping rate for your orders at the time the label is purchased.

Remember, it’s never too early to prepare for the next peak. Looking for a successful holiday season fulfillment plan in 2023? Connect with one of our experts today to get started.

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