The annual holiday shopping season is always a time filled with happiness, joy, stress and anxiety. Many people enjoy the cooler weather, the fun holiday music, and all the wonderful smells and foods that accompany winter holidays.
But with the U.S. economy in constant flux and consumers tightening their budgets, shoppers want the best possible deals. Similarly, retailers want to obtain as many sales as possible. So for the 2023 holiday shopping season, many retailers have chosen to focus on consumer experiences as a way to entice shoppers to visit their stores and make purchases.
With the 2023 holiday shopping season quickly approaching, retailers around the world are in the final push for much-anticipated holiday sales. This year brings a unique blend of optimism, technology integration and changing consumer behavior.
Lessons from 2022
Before we dive into the 2023 holiday shopping season, however, let’s cover some of last year’s retail lessons. The 2022 holiday shopping season was full of global supply chain challenges as well as the continuance of the pandemic’s influence. Rising food costs, rent and gas forced consumers to be more selective in their spending habits.
Last year, stores like H&M® and Best Buy® waited too long to raise prices or lure in their foot traffic. They lost sales and revenue due to poor planning. Stores like Ulta® and Zara® held strategic promotions to keep foot traffic steady and to entice online purchasers.
The National Retail Federation (NRF) noted that the 2022 November-December holiday season grew by 5.3% to $936.3 billion. This number was below the predictions the NRF made previously, due to inflation and high interest rates. The sales growth was less than expected, but sales grew by 7% from the 2021 season.
Expected Sales for 2023
Taking last year’s sales into account, the NRF believes that U.S. consumers plan on starting early for their holiday shopping. With economies stabilizing and higher consumer confidence, the 2023 holiday shopping season should see a jump in sales.
The United States retail sales could potentially experience a growth rate of 4-6% over last year’s sales. Adobe® forecasts $221.8 billion for the 2023 holiday season, with Cyber Monday topping out around $12 billion.
Adobe also notes that the 2023 Cyber Week deals (Thanksgiving, Black Friday and Cyber Monday) are expected to push online spending to $37.2 billion, an increase of 5.4% from 2022. Cyber Monday will most likely remain the year’s biggest shopping day in regard to spending.
For Black Friday, Adobe forecasts a growth of 5.7% from last year with expected spending around $9.6 billion. These sales are driven by deep discounts and flexible payment options from retailers. The “Buy Now, Pay Later” trend is gaining strength with consumers, and many shoppers enjoy the convenience of it for their holiday buying season.
Massive Discounts Expected Across All Retailers
Retailers use discounts as a strategic tool to encourage shoppers. Flash sales, doorbuster events, and other exclusive shopping events help to drive foot traffic into stores and online visitors to e-commerce sites.
To help push larger purchases, retailers will focus on “buy one, get one” (BOGO) discounts or other BOGO-type deals (i.e., “buy one, get one half off). Limited-time offers and flash sales also create a sense of urgency for the consumers, helping them to pull the trigger on larger purchases.
Adobe anticipates the 2023 discounts will be at an all-time high, with up to 35% off listed prices. This retail strategy helps to encourage spending for people who are still budgeting during uncertain economic times or for those who live in areas with higher living costs for items like food and gas.
Cyber Week is expected to host the deepest discounts throughout the week. Statistically, Black Friday is the best day to shop for items like televisions, whereas Saturday tends to have better deals on items like computers. Even though Cyber Week will have the best deals, shoppers will see discounts beginning in early October and carry through the shopping season.
E-Commerce Continues to Dominate Sales
Many shoppers love e-ecommerce sites and clicking a few keys on their computer to complete their online shopping! It is my preferred shopping method and will most likely account for 75% of all my shopping needs.
E-commerce shopping is staying as the dominant preference of many consumers. Brick-and-mortar stores are regaining foot traffic since the COVID-19 pandemic, but it is hard to compete with the convenience that online shopping brings to consumers.
Retailers are planning for significant sales from their online platforms, needing to ensure website optimization and mobile experiences offer seamless shopping experiences. So fire up the coffee pot and get ready for some online-only deals that can save you time and money.
Upswing in Omnichannel Experiences
Another shopping convenience consumers are looking for this holiday season is integrated shopping channels. The “buy online, pick up in store” (BOPIS) and curbside pickup experience is still in full swing, and many shoppers will be looking for this option this holiday season.
Busy parents will be looking for ways to secure purchases online and quickly grab them from retailers. This strategy saves them from having to seek childcare providers to watch their children while shopping and allows them to avoid dragging family members out to busy stores.
Retailers that can effectively blend their shopping channels to bring maximum convenience to their customers will likely see higher sales as well as enhanced customer happiness and loyalty. To prepare for the 2023 holiday shopping season, retailers need a solid digital inventory system and enough employees to be able to pull online purchases to prepare for consumers.
Catering to the Consumers
One strategy many retailers will be looking to use is catering to the consumer and providing many options that consumers would like to see and use.
A standout trend in the most recent years is the rise of the eco-conscious shopper. Customers want sustainable products in eco-friendly packing, and many look for companies that use ethical business practices. To help attract customers, retailers can showcase their “green credentials” and offer sustainable options.
This year, the reusable tote may be a big initiative. Many retailers will offer customers the option of a free or minimally priced reusable tote to carry their items home. These totes can be used over again and typically make a nice gift-wrapping option.
Some retailers, like Bath & Body Works®, are showcasing their “refill” options to consumers looking to cut down on waste this holiday season. Bath & Body Works now offers soap refill containers, and this product prevents less plastic waste as the customer can refill their current pump dispenser.
Technological Innovation for the 2023 Holiday Shopping Season
Consumers want interactive experiences, and augmented reality (AR) and artificial intelligence (AI) can give them just that. These technological trends are forecasted to play an important role in the 2023 holiday shopping season, according to Big Commerce.
AR can provide customers with virtual try-ons, interactive shopping experiences and even room planning. AI offers consumers personalized recommendations, predictive analytics and quality customer service. According to Retail Customer Experience, one survey stated that 42% of consumers stated they were more likely to make a purchase when using virtual try-ons.
More sales during the holiday season also means more returns. The holiday shopping season isn’t only about capturing sales; it allows retailers an opportunity to create loyal customers from new and existing ones. Offering simple return experiences is a prime way to capture consumer loyalty.
Adobe notes that the 2022 holiday season saw on average a 10-16% return on e-commerce sales between November and January. While product returns are not ideal, they do allow retailers the opportunity to show their customers that they care.
A FedEx study showed that 98% of consumers are willing to purchase from a company again if that company offers convenient returns and 56% were willing to pay for hassle-free returns. Retailers will not only be focusing on purchases, but they will also be working to ensure their return policy meets customer expectations.
Consumer Experience during the 2023 Holiday Shopping Season
Customers will be bombarded with numerous promotions and options during the 2023 holiday shopping season, so it is imperative for retailers to maximize the customer experience. When companies prioritize customer experience, shoppers are more likely to purchase items and become loyal advocates for a brand.
According to Chain Storage, studies show that consumers value experiences over transactions. When retailers invest in an exceptional customer journey, they can provide both an enjoyable holiday shopping trip and an increase in revenue.
Chain Storage also says that Camp, a family-friendly retailer that specializes in play and interactive experiences, will set up a 10,730-square-foot store in Tysons Corner, Virginia, starting in early December. They will focus on their “La Familia Madrigal” experience, inspired by the movie “Encanto” from Walt Disney Animation Studios.
This interactive experience will be one hour long, and customers will pass through a bookshelf into a colorful 5,000-square-foot room. The experience will ultimately lead customers into a retail store full of gifts to buy in time for the holidays.
2023 Holiday Shopping
Consumer behavior during the holiday shopping season is typically marked with heightened emotions (both positive and negative), expectations, and a sense of urgency. The season sees a blend of tradition, nostalgia and the excitement of gift-giving. Good food, mixed with a lot of family and friends gathering together, help to keep customers shopping throughout the holiday months. But the holiday season is also marred with the stress of affording purchases, the hectic lines of people and the frustrations of finding exactly what you need.
With the 2023 holiday shopping season ramping up, customers can expect to see a blend of technological innovation, sustainability and pricing options to help with economic uncertainty. If retailers can help ensure pleasant, convenient and affordable shopping experiences, they can help make the shopping season more enjoyable for everyone. For retailers who properly prepare for the 2023 holiday shopping season and anticipate the coming consumer trends, they can capture sales while also ensuring plenty of customer loyalty.
H&M is a registered trademark of H &M Hennes and Moritz AB.
Best Buy is a registered trademark of BBY Solutions, Inc.
Ulta Beauty is a registered trademark of Ulta Salon, Cosmetics & Fragrance, LLC.
ZARA is a registered trademark of Industria de Diseño Textil, S.A.
Adobe is a registered trademark of Adobe, Inc.
Bath & Body Works is a registered trademark of Bath & Body Works Brand Management, Inc.