What should we expect for the 2022 holiday shopping season?
For brands and retailers, this is an important question. The holidays are not just a time when people are giving gifts, but also shopping deals for their own buys.
As a result, the festive season is also a time when retail puts its best foot forward, launching new campaigns, attractive deals and expanding capacity for the volume.
All of this doesn’t just appear on Thanksgiving week. Preparation starts early, and lasts all fall. Right on cue, the post-Labor Day period has brought a fresh round of predictions for the 2022 holiday season, with analysts putting numbers behind their expectations.
The Current dug through six of these forecasts to share the important figures, and key insights.
The predictions arrive in a year when many brands and retailers have withdrawn their outlooks for the second half of the year due to economic uncertainty. While each firm took a slightly different approach and there was some variation in the results, some common themes appeared throughout:
- Overall holiday sales will moderate. Don’t expect a massive increase in dollars over last year, as many predictions have growth running under inflation. Consumers are ready to spend, but are seeing discretionary dollars limited in a tough environment.
- Inflation will have a big impact. Higher prices and increased costs of food and rent could have an impact on order volumes and sizes. Deals and promotions are always important and will play an even bigger role this year.
- Ecommerce continues to grow. The return to stores and softening ecommerce demand has been the big retail story of 2022, but the holidays look poised to show that these two forms of shopping are not always in push-and-pull with each other. Whether it’s because of convenience or price, shoppers look poised to keep turning online after two years of booming ecommerce in the pandemic.
Here’s a look at the results that each of the forecasts are predicting:
The source: Deloitte’s annual retail holiday forecast
The prediction:
- Overall retail sales will increase 4-6% over 2021, compared to 15.1% growth last year.
- Total sales will reach $1.45 to $1.47 trillion.
- Ecommerce sales will increase 12.8% to 14.3%.
Key insight: "As inflation weighs on consumer demand, we can expect consumers to continue to shift how they spend their holiday budget this upcoming season," said Nick Handrinos, vice chair, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader. "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."
The source: Bain & Co. 2022 Holiday Shopping Outlook
The prediction:
- Overall US retail sales will see nominal growth of 7.5% over 2021.
- Real dollar growth of retail sales will be 1-3%.
- Total dollar sales will be $915 billion, with $660 billion coming from in-store sales, and $255 billion from non-store sales, including ecommerce and mail order.
Key insight: Despite a tough environment for consumers, they still plan to spend. The Bain Consumer Health Index showed that confidence was down slightly in August when compared with the 2021 holiday season, while anticipated spending was up. When it comes to segments, middle-income consumers showed the biggest increase in anticipated spending, while high-income consumers had the largest decline in confidence.
The source: Salesforce Shopping Index, which analyzes global data from more than one billion consumers
The prediction:
- Online sales are expected to reach $1.12 trillion worldwide and $265 billion in the US, staying essentially flat when compared with 2021.
- Total online sales will be essentially flat from 2021, decreasing 2% globally and increasing 3% in the US.
- Early start: 29% of holiday sales will occur in the first three weeks of November, a 5% increase from 2021.
Key insight: Inflation is set to rule the holiday season, Salesforce found. Global online prices are set to grow 7% compared to 2021, while consumers’ total online orders will drop 7%. At the same time, costs for suppliers, labor and transportation will put 10% of profits at risk.
“Retailers are feeling the squeeze from unprecedented margin pressure due to increased labor wages, fuel prices, and inventory carry costs,” said Rob Garf, VP and GM of retail, Salesforce. “Retailers mustn’t let margin be the Grinch that steals the holiday. It’s critical to contain costs by automating and scaling operations – particularly by streamlining processes and removing friction as consumers increasingly shop across digital and physical touchpoints.”
The source: MasterCard SpendingPulse’s annual holiday forecast
US retail sales growth forecast, 2022 (Photo via Mastercard)
The prediction:
- Overall retail sales, excluding automotive, will increase 7.1%, compared with 8.5% growth in 2021.
- Ecommerce sales are anticipated to increase despite significant growth last year, with a 4.2% year-over-year increase and a 69.2% increase on a three-year stack.
- In-store retail sales are expected to increase 7.9% year-over-year, and 10.4% on a three-year stack. From January-August 2022, brick-and-mortar stores accounted for 80% of retail spend.
- Hot categories: After two years of comfort gifts in the form of loungewear and athleisure, a wardrobe refresh is set to be a dominant theme this year. Apparel is forecast to increase 4.6% year-over-year, while luxury is forecast to increase 4.4% year-over-year, making them among the top categories.
Key insight: “This holiday season, consumers may find themselves looking for ways to navigate the inflationary environment – from searching for deals to making trade-offs that allow for extra room in their gift-giving budgets,” said Michelle Meyer, U.S. Chief Economist, Mastercard Economics Institute. “New job creation, rising wages and lingering savings should have many consumers ready and able to spend.”
The source: AlixPartners, a global consulting firm, which surveyed 1,000 US consumers
The prediction:
- Overall US retail sales will increase 4-7%. With current inflation rate sitting at 8.3%, this would be a decrease in real sales.
- Pullback: 30% of consumers plan to spend less this year than last, while only 17% plan to spend more.
- Ecommerce: 40% of consumers plan to do the majority of their shopping online, which is up 10 percentage points from a pre-pandemic survey conducted in 2019. Meanwhile, only 56% of holiday shoppers plan to visit a physical store to browse merchandise, down from 57% last year.
Key insight: “In today’s new world, consumers are demanding that even traditional retailers be ‘websites with stores,’ not ‘stores with websites,’” said David Bassuk, global co-head of the retail practice at AlixPartners. “That’s why it’s critical that retailers of all types embrace what we call ‘digital-first retail.’ Most retailers have yet to crack the code on sustained omnichannel profitability, but those hoping to thrive in this new world must take a completely new perspective into their operating model—including regarding processes, organization and technology.”
The source: NetElixir, a digital marketing agency, released a weekly holiday sales forecast calendar
The prediction:
- Ecommerce sales will increase 7% year-over-year, and are likely to exceed 20% of the share of overall retail.
- Deep discounts will run all of Thanksgiving week, starting before Black Friday and Cyber Monday.
- Ecommerce will spike the week of December 18-22 for last-minute shopping, with buy online pickup in store being a particularly attractive option. Other peak digital days will include November 20-21, November 24-25, November 28, December 4-5, December 11-12.
Key insight: "I am more optimistic than other forecasters regarding the upcoming holidays," said Udayan Bose, Founder and CEO at NetElixir. "My forecast comes from aggregating recent online sales trends, an analysis of key macro expectations guiding the ecommerce landscape, and a hunch about consumer behavior gleaned from decades in the business. This year will not be without its own set of challenges, but I strongly believe we will have another unique and fulfilling year. Now is the time for retailers to plan their pivots and get a headstart on the holiday rush. We're here to help guide those strategies in any way we can."
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