Holiday Shopping Trends 2022

Key Takeaways:

Expect reduced spending from consumers across the globe this holiday season
Discounts, promotions, and buy-now-pay-later programs have increased importance to shoppers this year
Market research helps identify what consumers need from brands to make holiday shopping accessible amidst economic turmoil

With the holiday shopping season approaching, brands are busy brainstorming how to leverage trends to capture the market’s attention and attract consumers. But this year, juxtaposed against the holiday spirit is an imminent recession, continued inflation, and general reductions in consumer spending and confidence. These are tough and unprecedented conditions, and businesses must plan accordingly to make the best of hard times.

Read on to gain valuable insights into current consumer trends influencing the upcoming holiday season, and how market research can help mitigate their effects.

Consumer Trends for 2022 Holiday Shopping: Spending Less, Spreading Costs

The numbers are clear: consumers have reduced their spending and will continue to do so throughout this holiday season:

Quantum Metric projects UK consumers will halve their holiday spending in 2022. Most will spend less than £500 for the entire year.
Fifty-eight percent of U.S. consumers plan to cut back on non-food spending for the holiday season, according to Auctane. This could result in a $30 billion drop in consumer spending or a 14 percent reduction for 2022 compared to 2021.
Retail sales in the Eurozone dropped by 0.4 percent in August 2022 alone, according to Eurostat. This combines to reflect a year-on-year decline of 2 percent since 2021.

Further, expect consumers to start the holiday season early and spread their spending. There are numerous factors that contribute to this:

37 percent of U.S. shoppers plan to start shopping early to snag a deal before prices rise, according to Salesforce.
Many retailers hold surplus stock, forcing discounts and price reductions to recoup costs. According to Adobe, the electronics industry is expected to mark down products by 27 percent, with the toy industry at 22 percent.
According to Accenture, there is a growing trend of the “organized consumer.” Thirty-five percent of consumers will stick to a holiday budget and 45 percent shop at different times of the year to get better deals. Interestingly, 42 percent of consumers are shopping solely based on the availability of promotions and discounts, as and when offered.
According to a BlueDot survey of 1,000 consumers, 48 percent of Gen Z respondents said they plan to use buy-now-pay-later (BNPL) finance products. This extends to Millennials at 47 percent and Gen X at 40 percent this holiday season. In contrast, only 14 percent of Baby Boomers plan to use BNPL. This discrepancy may relate to the gap in generational wealth, where Boomers held 10x more wealth than Millennials overall back in 2020.

How Can Market Research Help Brands This Holiday Shopping Season?

sago With less disposable income, consumers spend more time scrutinizing their spending. The objective for brands is to retain these customers and maintain a sufficient value proposition to avoid losing sales.

Comprehensive market research helps businesses understand the thoughts and feelings that drive consumer behavior, allowing companies to be proactive and remain one step ahead this holiday season.

Important areas to consider include:

1. Quantitative Research

Use quantitative research to observe events in an environment and to explain how those events affect people. The numerical and statistical data enable the clear communication of trends and insights to explain “what” is happening.

Brands can use quantitative research to gain insights such as:

What percentage of customers would buy our product if we added a BNPL partner, versus without?
What percentage of customers will not buy from us without first receiving a promotion or discount?
What is the total budget of our average customer for the 2022 holiday season?
Compared to the recommended retail price (RRP), what percentage discount would convince a consumer to buy X product?

2. Qualitative Research

Use qualitative research to explore ideas, thoughts, and meanings, building upon quantitative research to explain “how and why” in addition to “what.”

Examples of insights brands can gather from qualitative research include:

Why are consumers more willing to buy from us if we offer BNPL options?
How much more would consumers spend if we enabled BNPL?
Why are discounts and promotions a factor in consumers’ purchasing decisions?
Why are consumers spending more or less on certain product types?
Why did consumers begin shopping for the holidays early?

Use the insights gathered to expand payment options, deploy new promotional campaigns, and redirect investments into more lucrative product areas—but only if consumers truly demand it.

3. Self-Serve Research

Self-serve research is ideal for brands looking to make decisions quickly and iteratively. Running a last-minute promotion? Test it with your target audience first with the help of a self-serve research platform. This approach enables brands to infuse data into their decisions without sacrificing project timelines or budgets.

Methodify, Sago’s automated quantitative research engine, provides users with accessible, pre-built methods for common tasks such as concept or ad testing. It’s also possible to build and save methods designed for your specific objectives while maintaining the benefits of automation. Whichever path you take, you’ll have insights at your fingertips this holiday season.

Buck the Holiday Shopping Trends with Sago

It’s clear customers feel the squeeze this holiday season. Fifty-eight percent of U.S. consumers are cutting back, and most Brits are limited to a £500 budget for holiday shopping. The fate of the Eurozone is worrisome, with the IMF predicting a contraction and recession in 2023.

In response, consumers are more thoughtful about spending habits, buying earlier in the season and hunting for discounts. BNPL services help Gen Z and Millennials overcome cash flow problems but come with a debt burden.

The market environment is murky. Sago is the ideal partner for any business that needs actionable consumer insights to gain clarity this holiday season. Our quantitative, qualitative, and self-serve options cover the full spectrum of market research, helping meet the needs of every industry.

Get in touch with Sago and perform market research in preparation for the upcoming holiday season.