Feeling anxious about this year’s holiday shopping season? You’re not alone. It’s been a challenging year with modest sales growth, at best, for many.
Retailers that rely heavily on peak season to provide a much-needed boost to their overall annual revenue are understandably concerned about how a year of unpredictable demand (as shoppers have grappled with the cost of living) will translate into peak season sales.
New research by our sister brand Inventory Planner by Sage has revealed up to 70% of retailers in the UK and US fear the ‘double whammy’ of spiraling interest rates and inflation will hit their peak trading.
In fact, the majority of merchants appear to be bracing for impact, with up to 55% by admitting they plan to buy less stock than normal this busy season, according to the same study.
So will cautious consumers come through for retailers this Christmas? Or should merchants be wrapping up their hope of a flurry of sales until 2024?
In this blog, they share their predictions and insights on shopping trends in 2023, plus their advice on how YOU can make this your most successful peak season ever.
‘Community is the new loyalty’
by Andrew Busby, leading retail analyst and founder, Retail Reflections
“The John Lewis Christmas ad for 2023, released on November 9th, takes a departure from last year, with Saatchi & Saatchi assuming control of the saccharine staple. While it comes close, it doesn’t quite hit the mark. What am I referring to? This year’s top holiday shopping trend and the one thing all retailers should focus on as we enter another tumultuous year for retail: community.
“That sense of belonging, of close relationships, is a basic human psychological need, as we’ve learned from Maslow, and nowhere is it more important now than in retail. To underline this, think about the strapline of a well-known sitcom based in a Boston bar was ‘where everybody knows your name.’ Over a hundred years ago, Harry Selfridge espoused this for his store on Oxford Street; providing customers a place to gather, socialize, and commune.
“Because, amid a continuing cost of living crisis fueled by stubborn inflation and eye-watering interest rates for many homeowners accustomed to sub-one percent rates, community is the new loyalty. The sense that we’re all in this together will characterize this holiday season’s shopping. And that can only be a good thing.”
‘Shopping will happen early… then late’
by Christine Russo, founder of RCCA and leading industry voice
“This festive shopping season, retailers should expect ‘barbelling’: early and late shopping, with a middle time frame featuring a lull of consumer research, pinning, price comparisons, and browsing. Retailers face the decision of reacting to the lull with discounts or being concerned about overstock positions. The up-and-to-the-left style spending momentum, where consumers started slowly and ramped up in a straight line, is no longer observed.
“While BFCM once dictated shopping patterns and engagement, the consumer has redefined the shopping cadence, resulting in more of a barbell shape. A significant amount of shopping occurs earlier, followed by a substantial lull and then more later. According to the NRF, 41% will start in October, and 58% will finish in December. This potentially allows for about 7 paychecks from October through December, spreading out the financial impact.”
‘Shoppers will be more hyped for Christmas than ever’
by Alice Rowen Hall, Founder of Rowen Homes and Pink Boutique
“I’m predicting a really strong holiday shopping season with sales highest on £0-£100 pick up purchases. It’s only the second ‘normal feeling’ festive period since the pandemic, and although people have been feeling the crunch, I think they’ll be more hyped for Christmas than ever.
“Thanks to social media, we are seeing the seasonal home decor market rising with more and more customers taking influence from the states where people go all out decorating their home. I think sales of tableware, party games, gift wrap and decorations will all boom as people aim to make their Christmas look and feel like the aspirational homes and experiences showcased on social media.”
‘Properly plan inventory to boost profit’
by Jill Liliedahl, Director of Product Marketing, Inventory Planner by Sage
“According to our recent research, the consumer downturn has left up to 65% of retailers with excess stock, which up to 48% of sellers describe as a ‘major concern’.
“Around half of retailers surveyed said their cash flow position was ‘precarious’ and 42% said they had had frequent cash flow issues this year.
“Because of this, Black Friday will be even more important this year, with many retailers using it as an opportunity to shift surplus inventory and bolster cash flow.
“However, the real focus should be on implementing advanced demand forecasting tools, like Inventory Planner, which enables merchants to reliably predict sales (even when markets are tricky) and only invest in stock they will quickly sell, eliminating the risk of excess stock.
“With many retailers reluctant to pass on the full impact of rising prices – some feeling sensitive to potential accusations of ‘greedflation’, an alternative way to protect profit margins must be a priority.
“Technology like Inventory Planner can and should be utilized to accurately and easily plan inventory, and most importantly, protect cash flow and your bottom line.”
‘Being memorable is the key’
by Nicole Leinbach, Founder of Retail Minded
“The holidays offer retailers a prime opportunity to boost profits, captivate customers, and strengthen their overall market positioning. Seize the heightened consumer awareness during this festive season by striving to distinguish yourself in marketing and store messaging.
“Embrace your brand sentiments, whether they involve ethical practices, fashion-forward approaches, creative communication, charity partnerships, or anything else. Implement robust messaging campaigns across diverse consumer touchpoints.
“Challenge yourself to stand out amidst other retailers. Being memorable is the key to driving customer engagement and sales, particularly during the holidays.”
‘Strategic marketing will be the secret to success’
by Chloë Thomas, Author and Podcast Host, eCommerce MasterPlan
“Amidst a generally gloomy economic and political outlook, this Holiday Season will favor those excelling in marketing rather than relying solely on larger discounts to drive sales.
“Savvy marketers will master their numbers by sorting out GA4, understanding attribution strengths and weaknesses, and incorporating essential stats (returns, cancels, VAT, discounts). They’ll know which levers to pull for results.
“They will also utilize data analysis to determine the right promotions for each segment of their database, aligning with profit and engagement goals.
“Harnessing neuroscience and compelling copy, incorporating elements like FOMO, social proof, limited edition, urgency, and storytelling, will also be critical.
“Finally, retailers should allocate budget for testing new channels, with a keen eye on fast reactions to what’s working. TikTok and TikTok Shop top the list due to impressive ROAS and compelling incentives.
“The winners this season will be those who embrace strategic marketing in the face of evolving challenges.”
‘Tracking events and retargeting ’
by Wesley Hartley, CRO, Leaf
“This holiday season, leveraging conversion tracking for high-performance personalization will be the key. By enriching tracked events on your website with the right product data parameters, you can retarget web visitors with the exact product details they interacted with, boosting conversion.
“Conversion tracking and customer segmentation also prove effective for retargeting BFCM leads generated for early sale access and existing customers.
“For post-purchase campaigns, retarget customer segments from a zero or first-party data platform who’ve purchased a specific product, offering relevant discounts on accessories or upgrades.
“For post-lead campaigns, using zero-party data, imagine a furniture brand retargeting people who filled in a form volunteering data on their living space and pets or kids. This segment can be retargeted with deals on furniture suitable for their space, resistant to pet claws, toddler drool, and random food detritus.”
‘Forget Discounting, Experience is Everything’
By Mark Hook, VP Brand Marketing, Brightpearl by Sage
“In a recent Brightpearl by Sage study, three-quarters of businesses said they are planning to discount during Black Friday season to increase sales.
“But here’s the problem: the more you discount, the more customers expect discounts. Many businesses fail to fully consider how cutting their prices affects overall profit margins and the larger sales volume they’ll need to keep income stable.
“Utilize strategic discounting for dead or surplus inventory, sure, but I would advise brands to prioritize convenience and exceptional end-to-end experiences.
“At this time of year, buyers are more emotional than ever, and they are going to remember the experience they had with your store over the 10-20% discount they received. When it comes to delivering on top end experience at the busiest time of year, firm’s should focus on automating everything they can; from order fulfilment and returns, to inventory management, and shipping.”
‘When traffic spikes, don’t forget about website security;
by Paul Ryazanov, MageCloud
“While you’re investing in marketing, traffic, and user acquisition, don’t forget about security and customer protection. With a more than 300% spike in malware during Black Friday and Cyber Monday, ensure your infrastructure can handle not just a surge in legitimate traffic but also resist potential hacking attempts.
“Configure your firewall to reject non-legitimate requests from attack-prone countries like China and Russia. Implement a security scanner on your site, monitoring vulnerabilities, and regularly install crucial security patches. Develop a backup plan for emergencies.
“Utilize Cloudflare as the best CDN and firewall, configuring your server to allow connections only to appropriate ports from whitelisted IP addresses, ensuring all traffic routes through Cloudflare.
“Use this malware scanner to conduct ongoing security audits and stay updated on suspicious activity.”
Learn more about how to put your business’ best foot forward in 2024 with a free Brightpearl demo.