What to expect this holiday season: 5 retail prediction

Labor Day has come and gone, and despite warm weather and sunny skies, the emergence of the pumpkin spice latte indicates that the winter holiday season is rapidly approaching. Looking ahead to the winter months, Mintel’s Retail and eCommerce experts outline their five retail predictions for the upcoming holiday season. 

Overall, for brands and consumers alike, value will be at the heart of shopping this season as both parties look for opportunities to overcome fiery-hot inflation that has no sign of burning out. An expanded shopping season, secondhand items, enhanced customer service, and even assistance from social commerce will help consumers navigate the busy season as they look to make the most of their shrinking wallets.

1. A budget mindset will prevail

Widespread inflation is hitting consumers’ wallets, and according to Mintel’s Global COVID-19 Consumer Tracker, 76% of adults are concerned about rising prices heading into the holiday season. While consumers will continue to prioritize holiday spending, most consumers are aware they will be spending more and getting less this season. As a result, Mintel research shows consumers will be more aggressive about scouting deals (three quarters) and more than half will look to curtail their spending: Loyalty will be harder to come by as more shoppers will shift into value-based outlets or shop wherever they can find the best sales. This coming holiday season we will see more consumers utilize tools such as buy now, pay later (BNPL) and browser extensions (ie Honey, Rakuten) that offer coupon codes and cashback options. Retailers must take full advantage of partnerships with BNPL and shopping portal providers to resonate with value-conscious shoppers. Consumers will also be leveraging eCommerce to compare items and prices across brands and retailers, making price-matching options a commodity. 

Overall, consumers are expecting to spend more in 2022, and given the importance of the holidays, shoppers are likely to prioritize their holiday shopping and cut back on other discretionary purchases including potentially self-gifting to make room for the moments that matter.

2. The early bird gets the deal 

Consumers will again shop early this season, as nearly half of consumers plan to have most of their shopping done before Thanksgiving. This year, budget-conscious consumers will shop early to plan ahead, take advantage of off-peak deals and stretch their purchases over a longer period of time. Market factors such as rising pricing and supply shortages are not the only reason consumers shop early: these factors only accelerated a longer-term shift away from peak holiday events such as Black Friday and Cyber Monday. 

While peak week (timeframe between Thanksgiving and Cyber Monday) has lost some relevance with shoppers, it still remains a big component of the holiday shopping experience. In 2022, retailers have an opportunity to reinvigorate peak week with more personalized deals and a shift away from big crowds in stores to a more experiential and social shopping experience. 

Overall, retailers will need to come to the table with a robust promotional strategy that offers consumers the deeper discounts they are seeking but offers more variety than the seasons-long deals that dominated in 2021. This approach must take into account the longer holiday season to keep consumers coming back throughout the season to take advantage of fresh deals.

3. Not all gifts will be new 

Consumers’ sentiments about the secondhand market are polarized. Some consumers embrace pre-owned options for financial and environmental reasons, and others would never consider it. According to Mintel research on gifting, 48% of consumers are comfortable receiving a previously owned item as a gift. Due to the current inflationary landscape and increasing environmental concerns, the stigma about gifting something preloved will continue to decrease. Roughly 20% of Gen Z and Millennials plan to shop in thrift or consignment stores for the winter holidays (versus 15% of adults 18+). 

Brands and retailers that have adopted or solely provide secondhand shopping options will enjoy increased popularity this holiday season among consumers looking for the perfect gift without jeopardizing the cash in the wallet.

4. Service will shine 

Customer service will be a bright light this winter holiday season – brands will look to invest in their employees and hype their customer service offerings to a greater degree and consumers will increasingly take advantage of the help to be as productive as possible with their shopping conquests. This will be especially prudent for retailers this year as they continue to endure the effects of inflation themselves and may have to pass along costs to customers. They also continue to be plagued with inventory issues which could lead to more customer service inquiries or complaints. Retailers must be equipped to be both proactive and reactive – to offer help and support pre purchase as well as to manage what could be an influx of back-end inquiries that occur post-purchase.

More retailers will realize that providing proactive quality service offerings is a way to offer nonmonetary value, and while consumers will be very price-focused, they may be willing to think about the broader picture and see the value of retailer services that are available to help with their shopping, especially if they are free. 

As retailers continue to grapple with staffing shortages, it may be challenging to also look to ramp up and promote customer service options. It’s likely many companies will add employee incentives to help boost employee morale and the overall business – a good move, given that consumers care about such efforts. Overall, nearly two thirds of adults (65%) think good customer service is a rarity these days, signifying much room for retailers to stand out this season through their service approach, even if it involves the way in which problems such as delays or returns are handled.

5. Social commerce makes way for easy discovery 

Social commerce, or the ability to purchase items directly via social media, will be a key tool for consumers this holiday season as they look for gifts to purchase. Consumers, particularly younger generations, are spending more of their time on these platforms, opening up opportunities for brands to connect and engage with shoppers. Mintel research shows that the discovery of new products and brands is a top reason to shop on social media for nearly 30% of consumers, increasing to 35% for Gen Z and 39% for Millennials. Furthermore, 43% of consumers view social media as an essential resource for winter holiday shopping, highlighting just how vital these platforms will be this season. Shopping on social media can be a fun, enjoyable experience where consumers can browse through their feeds from wherever they are, minimizing the need to make trips to crowded stores or even navigate to a brand’s website after discovering a product of interest. This seamless experience will keep consumers engaged as they shop, helping mitigate barriers to purchase. And, even if some brands aren’t yet sold on how lucrative the purchase side of social commerce could be, there is incredible value in being on social media for the discovery phase alone.

Beyond a seamless experience, social media can (and should) be a place where brands drive interest through exclusivity – thereby creating added value to the social commerce experience. This could be achieved through sales available only via social commerce, exclusive products, or even access to events if a purchase is made on a social platform. 

While social media will be a critical component this season, it doesn’t mean that consumers will be purchasing high-ticket items through Instagram. Consumers are still learning about the social commerce environment, meaning they’ll be wary about purchasing products with higher price tags. Categories such as clothing, accessories, footwear, home décor, and beauty items are areas consumers are most comfortable making purchases via social media. Brands can home in on these categories and offer guarantees to encourage purchase and ease concern. 

What we think

The 2022 winter holiday season will be defined by a value-focused mindset in which consumers will prioritize savings – but will not want to sacrifice on convenience and quality. Shoppers will start early and get creative, taking advantage of a variety of shopping methods and tools to get the job done, proving once again their resilience in spite of market challenges. Retailers must be just as resilient and nimble and focus on helping their customers navigate through the winter holiday shopping season by providing superior customer service including gift inspiration, as well as convenient ways of shopping such as pickup options, preowned items, and the ability to buy directly from social media platforms. 

To read more on holiday shopping and industry trends, click here.

Diana SmithAssociate Director, Mintel Retail & eCommerce

Brittany SteigerSenior Analyst, Mintel Retail & eCommerce

Katie HansenAnalyst, Mintel Retail & eCommerce

Marisa OrtegaAnalyst, Mintel Retail & eCommerce