Shopping during the holidays is an activity that some loathe and others crave, but almost everyone has to endure. This year comes with fears of high inflation, a string of layoffs and a darkening economy. Overall, this may or may not result in less spending, but it will no doubt transform the way consumers shop. According to the ICSC Thanksgiving weekend survey, 81% of respondents said rising interest rates are likely to affect their shopping behavior or payment methods during Thanksgiving weekend, whether they spend less, use cash, or use deferred payment methods.
Even so, in-person shopping is still a preferred option, and it could even be argued that having a physical presence will be beneficial in this economic climate.
Personal shopping is still the preferred option.
According to the ICSC Thanksgiving weekend survey, 75% of shoppers say they will visit a retail mall during the five-day holiday. This spread isn’t much less than total US physical retail spending for Q3approx Quarter 2022, which accounted for 85% of total retail sales according to the US Census Bureau. Historically, that doesn’t change much during the holiday season.
In terms of actual traffic to stores, Placer.ai found that while retail foot traffic had declined week-on-week in September, it began to increase in October, indicating an increase in demand ahead of the holiday season. It’s below 2021 but could still surpass it on Black Friday. It’s no surprise that the economy can affect spending and traffic, leaving retailers working extra hard to attract shoppers to their stores.
With inflation and rising costs, deals and positive shopping experiences are crucial.
One way retailers can attract shoppers is through holiday sales. According to the ICSC survey, 61% of shoppers agreed that higher prices make deals more influential. Another way is through the entire store experience. With rising costs, the quality of the shopping experience is far more critical. “At a time when global inflation has become one of the top concerns for consumers, leaving them with less disposable income, maintaining share of wallet is critical for retailers,” said Jenni Palocsik, vice president of marketing insights , experience and skills at Verint . “Creating exceptional experiences should be at the heart of every retailer’s engagement strategy. And our study shows that ‘winners make the spoils for the retail customer’.”
A positive experience is required both online and in person, but a quality in-store experience usually translates into higher spend. In the past, many retailers have verified higher order values in-store versus online.
A physical presence is a unique advantage in this economic climate.
It is possible that a deal can be beneficial during this time. Stores can allow consumers to connect with brands on a more personal level. It can even build loyalty, limit price elasticity, or increase spending.
Many digital brands have stores and offer high-quality experiences during the holiday season, but digital-only brands are also choosing to open holiday pop-up stores. For example, Harry Styles’ lifestyle brand Pleasing has opened a few pop-ups in London, New York and Los Angeles. Additionally, Bearaby, the stylish and sustainable weighted blanket brand, has opened its first pop-up at Whalebone on Bleeker Street in NYC, where it plans to host happy hour, movie night and an adoption event with Muddy Paws. Another relevant example is Rakuten, which just last week had a two-day pop-up offering cashback for purchasing various brands. These pop-ups are a great way to attract shoppers during this time.
More than ever, brands need to create meaningful experiences to attract holiday shoppers. People are reluctant to spend, but when the value of shopping transcends the transaction through deals and quality in-store experiences, shoppers are likely to show up and feel compelled to make purchases.